In the fast-changing arena of health and convenience retailing, Montini, the drug chain’s executive vice president of merchandising, and his team have shown an ability to determine what will resonate with consumers and a complementary willingness to try new ideas.
The result: a steady stream of merchandising innovations that have energized Rite Aid’s business and, in a larger context, illustrate how chain drug stores must evolve to succeed in the long term.
For those accomplishments, Chain Drug Review has named Tony Montini as its Merchant of the Year for 2014.
“At Rite Aid, we’re all unified around the aspect of being consumer-centric in everything we do,” explains Montini.
MERCHANT OF THE YEAR
“Today, consumers know what they want. They’re very intelligent and do a lot of research. So we try to mirror that and follow what the consumer insights indicate, which has led to a strategy-based approach in everything we go to market with, starting with the merchandising.”
The veteran retail executive, named to his current post at Rite Aid in 2011 after rejoining the company the year before, has championed speed in decision making, urging his team to act on knowledge gleaned from consumer data and not hesitate to implement new merchandising concepts.
“Two areas where we got the team to understand and buy into were, first, the idea that speed wins. We need to move fast and make decisions — but we need to make fact-based, data-driven decisions, not just shoot from the hip. We’ll analyze the data and make a decision, and if the data indicates we were wrong, we’ll course-correct,” Montini says.
“The second thing was to cultivate our supplier partner relationships so that they felt encouraged to bring their ideas to us, and together we could explore possible next steps. We wanted them to know that if they have ideas they want to try and, if it made sense to us because of the data and consumer insights, we would try it with them. And if it worked, we would roll it out to additional stores.”
Besides contributing to Rite Aid’s sales and profit growth, the merchandising group’s agility has enhanced the retailer’s relationship with its suppliers and its reputation in the marketplace, according to Montini.
“Supplier partners will come to us with new ideas and new concepts where maybe they didn’t in the past,” he says. “We’ve had a number of supplier partners tell us that nobody moves as quickly with decisions on innovation as we do.”
At the same time, Rite Aid is seeking more from its supplier partners, he adds. “Product innovation is something that every supplier will bring to Rite Aid and to our competitors. So the challenge we offer is, how do we do it differently at Rite Aid to make the consumer experience for specific products better in our stores than anywhere else? And we’ve gotten a really strong response from many of our suppliers on this.”
Montini says Rite Aid offers data from its wellness+ customer loyalty program — “which is very powerful and provides a lot of information” — to most of its supplier partners. “Then we ask them to use that in conjunction with data they have, most importantly their consumer insight data. And if we can cross the consumer insight data with our loyalty data, then we can find the ultimate sweet spot.”
Rite Aid’s “wellness store” format, now accounting for nearly a third of the chain’s approximately 4,600 locations, has been the primary showcase for the retailer’s merchandising innovations. Most recently, Rite Aid premiered new presentations for over-the-counter health products and beauty care — including an in-store beauty adviser — at a number of outlets in key markets.
Since the wellness store’s debut in 2011, new concepts have continually been rolled out in such categories as men’s grooming, diabetes care, hair accessories, consumables and grocery, vitamins and supplements, eyewear, nail care, smoking cessation, general merchandise and home health care, among other areas.
“Our biggest challenge is to constantly improve. In this business, one never attains the ultimate goal. There’s always the next thing that’s coming and the next thing that needs to be done. We always say, what can we do tomorrow that we’re not doing today?” Montini says. “Competition is very stiff, and it’s not just drug stores. Our competitors are mass, club, grocery, dollar stores, etc. Every one of them is a competitor of ours. So we have to constantly strive to be meaningfully different and better for the consumer.”
To that end, Montini can draw from deep experience. He returned to Rite Aid in February 2010 as senior vice president of category management after serving as executive vice president and chief operating officer of national advertising agency Marc USA. Previously at Rite Aid, he served as senior vice president of category management from 2002 to 2003 and as vice president of purchasing from 1987 to 1989.
His retail experience also includes serving as senior vice president and general merchandise manager for the drug store business at Kmart as well as in executive merchandising positions with the former Revco and Reliable drug chains. He also was senior vice president of sales for the vitamin manufacturer Leiner Health Products.
Montini emphasizes that teamwork has been a linchpin of the Rite Aid merchandising group’s success.
“There are no silos on my team. We treat each other like family. We either win together or we lose together. We all have that mentality. There’s nothing that one wouldn’t do for the other or for the team overall. That’s been part of the cultural change within my team — and all of Rite Aid.”