Cardinal reinforces true ‘independence’
Embrace diversity. You don’t have to be Leader to be a leader.
That is Cardinal Health’s modern message to its roughly 6,300 independent pharmacy customers that aren’t members of its franchise division of Medicine Shoppe and Medicap pharmacies. In a gradual but sweeping shift in how it goes to market, the wholesale and health services giant has reduced its emphasis on the Leader store brand in favor of a new approach to the pharmacy market on behalf of its sprawling base of independent pharmacies. While not in any sense abandoning the Leader logo or its marketing and ad circular programs, Cardinal has developed a more customized and store-specific approach to its retail network that encourages each pharmacy owner-operator to fully develop his or her own brand and local market identity.
Cardinal’s customers can still participate in all Leader programs, and many do, says company spokeswoman Tara Schumacher. But independents by nature want to trade on their own brand of personal service and their own good name to build customer loyalty. Cardinal, she said, has realigned its independent pharmacy division under Steve Lawrence, SVP independent sales and marketing. The new paradigm: customer-specific flexibility in marketing, merchandising and store support.
That new, let-the-owner-decide-what’s-best approach is what greeted the roughly 2,000 independent pharmacists who swelled Cardinal’s customer ranks when the company finalized its buyout of Kinray, the nation’s largest independently owned drug wholesaler, early this year. And for those owner-operators accustomed to Kinray’s highly individualized and high-touch brand of service, the change must have been a welcomed one.
Under Cardinal’s new strategy, “if an independent pharmacy wants to market itself under what it perceives is a broader brand, but wants to be an independent pharmacy and not a franchise, they can still have all the Leader program materials — store banners, signs, circulars,” Schumacher told Drug Store News. “But instead of encouraging customers to become Leader stores, we now offer local store marketing services, where we’ll help any customer build awareness of their own store name.”
“We’re focused more on growing our independent base of customers, not necessarily on growing the number of Leader customers,” she added. “It’s about whatever makes the most sense to our customers’ businesses. So if an independent pharmacy wants to market themselves as Joe’s Pharmacy, we’ll support them in that; if they want to market themselves as Joe’s Leader Pharmacy, we’ll help them with that, too.”
The shift in approach culminated on July 23, 2010, when Cardinal unveiled a broad set of new applications designed to help independents compete far more effectively under their own hard-won marketplace identities. Cardinal called it “the industry’s first fully customizable suite of marketing tools that enable independent pharmacists to build and market their own brand within their communities — without having to tie their marketing efforts to a national banner program.”
The change was based on “extensive customer research [that] told us that an increasing number of retail pharmacies want to be able to exclusively market their own store names in their local communities,” Lawrence said. “But until now, they haven’t had easy-to-use, quality marketing tools that can help them do that in a cost-effective way.”
Now available to Cardinal’s customers:
Customized store websites that can feature a store’s full brand identity, along with online order refills integrated with a store’s pharmacy system and tie-ins with commercials, store circulars and other marketing activities;
Cardinal’s new in-store radio system, which allows for store-specific ads;
A new, customizable in-store signage and circular system;
A new outbound calling system to help pharmacies improve patient relationships and medication adherence, linked to the store’s pharmacy system for reference tracking; and
A new series of radio and TV ads that can be customized to promote an individual store’s brand, products and services.
“A lot of our customers have said, ‘we like the brand equity we have.’ So now the marketing materials can reflect just that,” Schumacher said.
Safeway rebounds with sharper focus
After being hemmed in by recession, cash flow problems and costs, a venerable lion of West Coast food and drug retailing is roaring again.
Safeway shed a few more unprofitable stores in 2010 and early 2011, but emerged with sales and earnings results that help affirm its long-term strategy. The chain generated sales of $41.05 billion in the fiscal year ended Jan. 1, 2011, up less than half a percent from the previous year. But with a smaller, more productive store base and other improvements came a return to profitability; net income for fiscal 2010 was $589.8 million, compared with a net loss for 2009 of $1.1 billion.
Chairman, president and CEO Steve Burd cited “price reductions, reinvigorated private-label brands and targeted marketing” for the upturn, as well as new curbs on shrink and operating costs.
In the midst of a still difficult economy in 2010, Safeway also opened or remodeled another 74 stores in line with its Lifestyle prototype, which offers customers “wood-like flooring, relaxing earth-toned decor and subdued lighting with spotlights on featured products … [for] a warm, inviting ambience,” according to the company.
“Our … store renovations are almost complete, with 85% of our 1,694 locations now transformed into Lifestyle stores,” Burd reported Feb. 28.
Pleasanton, Calif.-based Safeway remains one of the nation’s top pharmacy retailers. Pharmacies operate in nearly 80% of its 1,694 supermarkets, giving it some 1,320 in-store pharmacies across a broad swath of the western and southwestern United States and in the Philadelphia market. That healthcare prowess is tied to a reputation as one of America’s top supermarket sources for organic and healthier-choice foods.
In April, Safeway took a big step to regaining full power in its pharmacy division with the hiring of pharmaceutical industry veteran Darren Singer as its new SVP pharmacy, health and wellness. The appointment fills a long-running management void that opened a full year earlier, when Dave Fong, Safeway’s top pharmacy executive, left the company as SVP pharmacy and family health. Fong’s position had been filled on an interim basis by Gary Rocheleau, but no permanent replacement had been named since Fong’s quiet departure in April 2010.
Singer, a 25-year veteran of GlaxoSmithKline, will regulate retail pharmacy operations, specialty care, pharmacy services, compliance, benefit management and managed care. He will report to merchandising president Kelly Griffith.
Singer, who among other roles at GSK was VP marketing for OTC wellness, could bolster Safeway’s ongoing efforts to marry pharmacy with health and nutrition. “His … proven track record in running some of the most visible and valuable brands in the pharmacy and wellness industry are well-suited to his leadership role,” Griffith said.
Safeway calls its pharmacists “experienced health consultants” who provide immunizations for whooping cough, tetanus and other conditions, along with the flu. Increasingly, the company is taking such health services as immunizations and health screenings outside the stores and into local businesses, schools, senior centers and other settings.
Safeway also is aligning those pharmacy care programs with a broader message designed to appeal to the total health-and-wellness needs of consumers. In mid-February, those efforts got another boost with the launch of SimpleNutrition, a shelf tag system designed to make it easier for shoppers to find better nutrition choices. Safeway called the new green tags “a first step in helping customers modify the selection of products that support a healthier lifestyle,” and said the tags point out one or more of 22 different nutrition and ingredient benefits for tagged items — e.g., organic, gluten-free or low-sodium products. Barbara Walker, group VP consumer communications and brand marketing, called it “a quick snapshot of the nutrition and ingredient benefits” of many foods.
Safeway also has broadened its nutritional message appeal with another branded line of healthier foods. Launched in late January, Open Nature is a new line of more than 100 naturally raised and unadulterated foods, beginning with products sold in the meat departments. The brand — which joins Safeway’s other healthy- alternative brands, O Organics and Eating Right — will expand to other food categories throughout 2011, the company reported.
RCEC to bring pharmacists, NPs together
ORLANDO, Fla. — Studies have indicated that the best people to get patients to adhere to their medication therapies are store pharmacists, while the second-best people are nurses. Thus, it’s only natural that getting nurses and pharmacists to collaborate will further improve adherence. The collaborative care track that The Drug Store News Group will introduce at the Retail Clinician Education Congress in August is a step in that direction.
Collaborative Care Day, which will take place on Aug. 2 at the Gaylord Palms in Orlando, Fla., will provide up to six dually accredited continuing education credits for pharmacists and nurse practitioners. The one-day track is a new addition to the annual RCEC, which will run Aug. 1 to 3 in line with National Convenient Care Clinic Week. The collaborative care track will include sessions with nurse practitioners and pharmacists on working together to improve health outcomes, common respiratory ailments, pediatric pharmacology, drug interactions — especially involving over-the-counter medications — hypertension and Type 2 diabetes.
“We know that pharmacists are essential providers in helping patients manage their drug regimens and drug-adherence protocols,” Drug Store News publisher Wayne Bennett said. “We also know that retail nurse practitioners provide the community with an important access point for not only treating minor illness and injuries, but also vaccinations and other health-condition monitoring services like high blood pressure, cholesterol, and diabetes screenings and assessments.”
Collaborative Care Association executive director Tine Hansen-Turton also is enthusiastic about the track. “We know the best health care in this country is provided by a team,” she said. “We are excited to introduce the collaborative care track at the Retail Clinician Education Congress, which is a hallmark of how health care will be provided in the future.”
Also new to RCEC 2011 is a special executive track featuring special sessions aimed at healthcare system executives and hospital administrators. The executive track sessions take place Aug. 1. The exhibit hall will be open all three days. For more details, drugstorenews.com/rcec-sponsorship-information.