No keener rivalry exists in all of retailing than that between CVS and Walgreens, America’s largest and most successful drug chains.


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Inside This Issue - Opinion

Rx: The convenient health care alternative

September 27th, 2010
by David Pinto

No keener rivalry exists in all of retailing than that between CVS and Walgreens, America’s largest and most successful drug chains.

Each brings to that competition an arsenal of creative weapons unprecedented in the 100-year history of chain drug retailing in America, one that turns on some of the most impressive marketing programs ever conceived and executed in the U.S. retailing community.

The current battleground in that competition is that annual autumn event so long overlooked or underappreciated by the retail community: the inoculation against flu.

Last year Walgreens, in a dramatically creative and hugely successful marketing coup, got a jump on virtually every member of the U.S. health care community by offering the flu vaccine in September, a month before the traditional beginning of the annual flu indoctrination season. This season, with CVS and most other health care retailers having learned, from Walgreens’ success, the marketing and professional advantages of offering the flu vaccine at the start of September, the contest among health care retailers has become more competitive, more creative and more serious, nowhere more so than at Walgreens and CVS.

Walgreens kicked off the competition earlier this summer by offering gift cards in its stores redeemable for a $30 flu shot. Not to be outdone, CVS soon followed by selling a similar gift card.

This month Walgreens followed up its gift card initiative with a mailer, targeted to consumers who had received their flu vaccine at a Walgreens drug store a year ago, that urged those customers to “Arm yourself for the ones you love,” while reminding them that “It’s flu shot time again.” The mailer included a registration form that the drug chain had already completed, using the customer information compiled last year. All that remained was for the patient to bring the completed form to a Walgreens drug store, no appointment necessary. The promotion piece even included a blank registration form “for a friend.”

Not to be outdone, CVS sent both a mailer and an online message to loyalty-card and pharmacy customers reminding them of the availability of flu shots at every MinuteClinic and CVS location, a reminder that included the addresses of the nearest locations.

As a further inducement, CVS dropped the cost of a flu inoculation from $35 a year ago to $30 this year (while Rite Aid went a step further, reducing the cost to $25 from $30, and Target dropped its price to $24).

Behind this activity are several factors. The first is that community pharmacies are quickly becoming favorite destinations for consumers in search of the flu vaccine. Last year some 12% of those consumers who received flu shots did so at a community drug store.
Second, dispensing flu shots is fast becoming a lucrative business for community drug stores, drawing traffic and offering opportunities for additional sales.

Third, and perhaps most significant, is the emergence of the community pharmacy as a logical and convenient health care alternative for the American consumer. If patients are willing to get their flu shots at a drug store, goes the logic, what other clinical services might a drug store legitimately and profitably offer? The answer, it is turning out, is many.

So it is that Walgreens and CVS have made flu inoculations their latest and most intensely fought marketing battle. So it is, too, that Rite Aid is giving any customer who gets a flu shot at one of the 3,000 Rite Aid drug stores providing this service a coupon booklet offering over $100 in savings on a variety of health and wellness, beauty and household products. So it is, as well, that even grocery retailers are joining the competition: Safeway, for instance, is giving any customer getting a flu shot at one of its supermarkets 10% off that customer’s next grocery purchase.

All this is wonderful news for community pharmacy. More than that, it’s further proof of the health and vitality of chain drug retailing as a core health care provider as well as of the increasing self-knowledge of what a community drug store could and should do for its health care customers in this age of spiraling costs and increased demands for clinical services.

Most encouraging, the community drug store’s ability to attract consumers in unprecedented numbers to a clinical service such as flu inoculations is but the latest evidence of the unequaled merchandising, promotional and professional power America’s drug chains can unleash when a customer’s health is at issue.

Indeed, Safeway can offer all the discounts in the world on grocery purchases. But when it comes to marketing a core clinical service like the flu vaccine, no member of America’s health care community can begin to rival the ability of the community drug store to attract consumers — and deliver the clinical services it advertises.

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