Q&A with Rite Aid’s Ken Martindale: Genuine Well Being
Since its debut two years ago, Rite Aid’s Wellness store format has expanded from a handful of stores to nearly one-fifth of the chain. As of June 1, the chain had 905 Wellness stores — out of a total of 4,612 stores — with plans to convert about 300 more over the remainder of the fiscal year. About 150 of the stores showcase the Genuine Well Being format, the latest version of the concept. (For exclusive photos of the new store, visit DrugStoreNews.com/Photos.) Drug Store News recently spoke with president Ken Martindale about how the Wellness format has evolved.
DSN: How do you decide which stores to convert to the Genuine Well Being format?
Martindale: A variety of factors are considered when deciding whether or not a store should be converted to the Genuine Well Being format including: store performance/profitability, customer and neighborhood demographics, previous remodels and renovations, and lease terms.
DSN: What are some key ways in which the concept has evolved that the average customer might not notice at first glance?
Martindale: Two key ways our Wellness store format has evolved are product flow (location and placement of merchandise) and easier way-finding (navigation) throughout the store, both of which enhance the customer experience by creating a shopper-friendly environment.
DSN: What are some elements that can be applied across all converted stores?
Martindale: All elements of the design have the potential to be introduced across the board, if they are successful. Two elements we’re looking at currently are the household department and organic and gluten-free foods.
DSN: How has the NowClinic concept been coming along? Are you planning to expand it or any other telehealth initiatives?
Martindale: We continue to test and evaluate the NowClinic program, which is currently available in approximately 70 stores in Detroit, the original pilot market; Baltimore; Boston; Pittsburgh; and Philadelphia.
DSN: You’ve just launched a major expansion to the Wellness+ program with Wellness65+. Will future expansions to the program focus on patients with chronic diseases?
Martindale: Our goal is to build loyalty among and reward our best customers, while also meeting their individual health-and-wellness needs by offering personal, compelling and differentiating resources, services and products. We will continue to enhance our Wellness+ program to ensure we’re always delivering relevant value, helping us attract and keep our most valuable customers.
Putting wellness on the back-to-school list
According to a July 2013 poll of more than 500 AccentHealth viewers with children of school age, kid’s annual physicals and back-to-school shopping go hand-in-hand. Approximately 75% of respondents take their child for a back-to-school physical. Of those, 4-out-of-5 do so at least four weeks before the first day of school-the time at which the majority of viewers indicate their back-to-school shopping kicks off.
This may explain shoppers’ growing focus on health and wellness when planning for back-to-school. Behind supplies and apparel, health and wellness products rank third in terms of commonly purchased categories. One-fifth of respondents indicate they plan to buy more preventive care items for their child this year compared to last. Purchasing health and hygiene products for back-to-school is greatest among those with children entering or in college, with 57% purchasing personal care items and 36% buying OTCs and vitamins.
While respondents forecast that overall spending will be up from last year, economic factors are still top of mind. The drivers when selecting a venue(s) for back-to-school shopping are product price and sale offers. Additionally, more than half of respondents say they will shop for sales more this year compared with last.
When it comes to where to shop, mass merchandisers emerge as the most popular destination for back-to-school. However, respondents signal that there is an opportunity for pharmacies to be utilized in the future. While only 38% of respondents report shopping at drug stores for back-to-school, 66% report they are likely to shop at a pharmacy for back-to-school in the future. With cost savings playing an important role, 9-out-of-10 viewers indicate that coupons would incentivize them to try a new store for their back-to-school needs.
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Specific baby segment sales grow at drug channel
Numbers can be deceiving in the baby category. While overall category sales are down, the drug channel is seeing nice increases in specific segments within the category. The numbers suggest that drug retailers could be missing an opportunity.
"Diapers are being consumed as an online category, but there are other growth areas in the category," said Mark Deuschle, VP business development and chief marketing officer at GMDC. Baby feeding products dollar sales, while down at supermarkets, were ahead 3% in drug stores last year. Dollar sales of baby accessories were up 8% last year in drug stores, while supermarkets saw a double-digit decrease in the segment. Sales of baby toiletries also were ahead of the industry average at drug stores.
Some of the categories with the most significant sales dollar increases in the drug channel were formula and bath products (both ahead 5%), thermometers (up 45%) and teething remedies (up 10%).
There’s a good reason for drug retailers to pay more attention to the category. "Mothers with young children tend to shop fewer outlets, thus the opportunity to build basket size and trip loyalty through this category is high," said David Luth, principal at Radian Group. "Retailers should have broad coverage across most baby categories, even with a limited assortment in some of the ancillary categories like toys, accessories or clothes."
Luth said all baby products — including formula, food, feeding products and toys, as well as OTC and toiletries — should be merchandised in one destination department. Signage and a frequent shopper "baby club" aspect can contribute to making the section a destination department and encourage customer loyalty.
One new product in the category is Li’l Helper Baby Bottle Holder, showcased at the GMDC/FMI Health and Wellness @ Retail 2013 conference in June. It’s a bottle holder designed to free up mom’s hands while building baby’s natural grip reflex. The ergonomic design matches baby’s natural nursing posture, the company noted. In addition to supporting a feeding bottle, the product can serve additional purposes, such as a toy, rattle or teething device.