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Marketing and merchandising reflect new mission at Rite Aid

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PHILADELPHIA — As Rite Aid continues to evolve into a health care company, it has undergone a significant transformation over the past few years, especially in its brand marketing and merchandise assortment. The chain is continuing to adapt to the importance of digital in the customer’s journey. In addition, loyalty programs are driving omnichannel engagement and digital adoption by the tens of thousands.

Erik Keptner

One of the key people who is helping drive this initiative is Erik Keptner, chief marketing and merchandising officer.

Keptner, with over 20 years of experience in retail marketing, joined Rite Aid in June 2019 to take on this key role. Prior to joining Rite Aid, he served as senior vice president of marketing for Wakefern Food Corp. In this role, he led digital commerce and analytics, advertising and digital media, sales planning, and own brands. Before that, he had a nearly 20-year career with Ahold Delhaize and its Giant Food Stores Division. There, he served in various roles of increasing responsibility, including executive vice president of marketing and senior vice president of sales, marketing and merchandising.

“Rite Aid’s marketing and the merchandising strategy is focused on articulating the new brand and supporting our RxEvolution strategy. We’ve recently introduced our new enterprise purpose within the company, which is to help you achieve whole health for life. And I think that really underscores what we’re trying to do with both marketing and merchandising programs going forward,” Keptner explains.

“Our rebrand was not just an identity or a logo change, but a redefinition of the Rite Aid brand, supporting our new business strategy. We revamped our stores to put pharmacists ‘front and center’ as part of this strategy. Pharmacists are playing a critical role in driving better health outcomes — not only through traditional medicine such as prescriptions, but also through advice on alternatives such as lifestyle changes, vitamins and supplements, and other remedies to support their whole health,” says Keptner.

He adds that the new strategy is also about appealing not only to its core customers but also to the pipeline of future customers and making sure that the company has the merchandise that will be the most relevant for them.

“We built our new merchandise approach on the mega trend of self-care, and the idea that the consumer wants to take a more proactive role in managing his or her health. And the consumer recognizes that health is not only physical health — it’s body, mind and spirit as well. The concept of self-care really exploded during the pandemic. We’ve rallied around this concept and tuned our marketing and merchandising efforts towards it.”

He says right now there is a fusion of traditional medicine and alternative remedies that the company is trying to bring to the forefront. “It’s not only in the pharmacy where the pharmacist can talk about not only medications but actions that a consumer can take proactively to address certain conditions. You will also see this in our front-end merchandise, where we’re offering more products that contain the ingredients that customers are looking for today. Products that are eco-friendly and feature more natural or clean ingredients.”

Keptner notes that one of the biggest strengths of the company’s marketing has been its use of insights to drive relevance. “I think the biggest strength in our brand focus is its relevance to today’s consumer. As I said earlier, today’s consumer is getting more involved in the self-care model. They’re looking for guidance on total health. We are tuned into where the consumer is today. We are also playing a crucial role during the pandemic and vaccinations and testing. So it’s raised the relevance of the drug channel. It gives the opportunity for us to speak to a lot of consumers that may not have experienced us for a while. So we can give them a fresh perspective on our brand.”

He adds that Rite Aid has seen great success with COVID vaccine delivery, increasing its digital engagement and increasing its digital reach and seeing growth in retail product sales. “Over the past two years we’ve had to become a lot more nimble as an organization so that we can address specific needs within communities for vaccinations and for testing. We’ve had to adapt to ever-changing state and local COVID-19 rules and pivot very quickly, based on the changing eligibility requirements and regulatory landscape. So that has allowed us to become more relevant to the communities we serve. For example, we had leveraged social media on a localized level where we saw opportunities to further vaccinate specific communities. I think that’s gone a long way in connecting our pharmacists to the local communities.”

Keptner notes that Rite Aid is launching a new loyalty program. The company did a soft launch in late February. “We’re launching a whole new program called Rite Aid Rewards. This new program will be a more straightforward points-based program that is digital-centric and personalized. Members will be able to access RiteAid.com via the Web or our app to keep track of their points and then convert their points into value.”

Keptner says that this year Rite Aid will also be upgrading its entire line of private label brands. “You’ll see new brands coming out with new packaging. We’ve elevated the quality standard, and maintained the great prices. You are beginning to see the repackaging and revamped branding in vitamins and in other O-T-C categories, as well as in our pet product line, PawTown.”

Last year, Rite Aid selected dunnhumby as its strategic partner to revamp its price, promotion and loyalty programs. Rite Aid and dunnhumby are utilizing their customer data models and consumer-led insights to optimize these investments to improve customer value perception digitally and at more than 2,450 stores in 17 states. Rite Aid’s loyalty program is being completely reimagined to deliver improved value for customers.

“Enhancing the customer experience is key to our RxEvolution strategy and to meeting the needs of our growth-target consumers’ needs,” says Keptner.

“Our main goal with this initiative is to improve our value proposition with prices, promotions and a loyalty program that are meaningful and relevant to them.”

“After an extensive process to review potential partners for this initiative, we chose dunnhumby because of the company’s proven experience in helping to improve value perception. dunnhumby’s expert data-science capabilities and customer-first orientation are a natural fit with Rite Aid,” he adds.

Meanwhile, Rite Aid and RELEX Solutions also recently expanded their partnership to include unified supply chain and category management. After launching RELEX’s end-to-end forecasting and replenishment solution in early 2021, Rite Aid is expanding its use of RELEX to include space and floor planning, as well as space-aware replenishment for all stores. By bringing together space planning; store and distribution center forecasting; and replenishment planning within a single, centralized solution, Rite Aid will automate and streamline processes while gaining end-to-end visibility into its supply chain.

“Expanding our partnership with RELEX was key to our merchandising transformation and journey to become a destination for whole health,” explains Keptner. “By creating a holistic, unified approach to supply chain and category management optimization, it allows us to build a foundation for customer-centric assortment; enable greater speed and efficiency; and provide better assortment visualization and communication for our field and operations teams — ultimately improving our customer experience.”

He adds that Rite Aid also has partnerships with third-party partners in delivery, such as Instacart, DoorDash, Uber Eats, Shipt and Postmates. “We’ve launched buy-online-pick-up-in store nationally as well through RiteAid.com.”

“The other program that you see in our stores is a new product attribute system that we call Better Choices. It basically takes more than 50 different product attributes and highlights them on the shelf tag for the customer. It makes it easier for them to shop and find products that are eco-friendly or have cleaner ingredients. You will also see the program expand online.”

“We continue to raise the bar on our assortment — ensuring that it reflects the fusion of traditional medicine and alternative remedies. And we are putting even more emphasis on our own brands. We are proud to be a leader in removing harmful chemicals from own brands product. We continue to maintain the top spot among drug retailers in this regard, as reflected in Retailer Report Card’s “Who’s Minding the Store” report. I think this exemplifies our focus on own brand and how strategic an area it is for us going forward,” he concludes.

 


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