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Wellness+ data sharpen Rite Aid's shopper intelligence
December 18th, 2013
CAMP HILL, Pa. – The wellness+ customer loyalty program is changing the game for Rite Aid in marketing and merchandising, according to company executives.
Currently, wellness+ has more than 25 million active members, defined by Rite Aid as those who have used their card at least twice over the previous 26 weeks. The free program has been a hit with consumers because the rewards structure is clear and the benefits are compelling, said John Learish, senior vice president of marketing. Now the drug chain is laser-focused on analyzing the rich trove of shopper data, he added.
Tony Montini: A mantra of the merchandising team at Rite Aid is to make fact-based, data-driven decisions.
“What we’re really driving toward now is how we leverage the data, how we segment our customers and how we develop direct marketing programs,” Learish said in an interview.
To that end, Rite Aid is working with a global retail analytics firm to evaluate its past and current transactional data and define customer segments, according to Learish. The segmentation allows Rite Aid to classify shoppers as primary, secondary and tertiary and, within those groups, identify which product categories and types of offers to target.
“From there, based on specific campaign objectives, we know what categories we need to highlight, what offer strategy to deliver and what channel to deliver it through,” Learish explained. “When you mix that combination together, what we offer is an extremely relevant communication to customers.”
Wellness+ has already demonstrated its value to customers, with members spending more in the front end and on prescriptions — especially as they rise through the Bronze, Silver and Gold tiers — compared with nonmembers, according to Learish. The program rewards members with more points for pharmacy purchases, including scripts and immunizations.
“Most importantly, we’ve been able to stabilize our pharmacy customer base,” Learish said. “The retention of customers that are members versus nonmembers, and the retention of Gold and Silver members versus the other members, are off the charts.”
At the same time, insights arising from the wellness+ data are allowing Rite Aid to better anticipate and respond to consumer shopping behavior, noted Tony Montini, executive vice president of merchandising. That information, too, is yielding valuable intelligence as Rite Aid works with suppliers to develop creative merchandising and enhance the shopping experience.
Montini described the data from wellness+ as “phenomenal,” enabling Rite Aid to merchandise at a more granular level. “Probably the biggest thing we’re going to implement, which we’ve already started but will do in a much bigger way, is consumer segmentation to target individual consumers based on their particular wants and needs,” he said in an interview.
John Learish: "What we're really driving toward now is how we leverage the data."
And that information doesn’t just provide an overview of what shoppers bought, when, how often and how much; it also indicates other purchasing opportunities for customers that Rite Aid’s merchandisers can potentially act on, Montini noted.
“The affinities are real learnings that come out of the data,” he said. “As an example, we may find that most people who buy a vitamin also buy a bottle of water. That’s not something that would intuitively come about, but the data shows it through the market basket analysis.”
A mantra of Rite Aid’s merchandising team is to make fact-based, data-driven decisions, Montini added. “We get a report card every day. Consumers vote every day, and they vote ‘yes’ if they liked what we did or ‘no’ if they didn’t. And when they vote ‘yes,’ we enhance, and when they vote ‘no,’ we modify.”
That approach has driven Rite Aid’s efforts to brainstorm with suppliers and develop unique merchandising concepts.
“That’s where we try to operate differently with our supplier partners. How can we take what they’re doing and make it easier for consumers to find their product in our stores and make the experience more enjoyable? That’s real innovation to me,” Montini explained.
“Supplier partners truly appreciate that approach. They come in with ideas, and we’re open to their ideas. We tell them right up front that no idea is too big or too small. We’ll try anything that makes sense.”
One of the most noticeable examples of merchandising innovations from wellness+ findings and/or supplier collaborations is in men’s grooming. In Rite Aid’s initial group of wellness stores, those products were merchandised in a “For Him” section. In the next generation of stores, men’s grooming items were merchandised in a freestanding unit with an interactive iPad display for Unilever’s Axe brand, which lets men sample a new look. It also color-codes product line segmentations to make it easy to find items.
Other innovations include a freestanding Nail Bar, hands-on hair accessory and diabetes diagnostic displays, and a smoking cessation end-cap with strong informational content.
“If the ideas and concepts make sense, we’ll test them,” Montini said. “And if they work, we’ll roll them out.”