Loyalty cards explain how three pharmacy operators are bullish around winning the same patient
WOONSOCKET, R.I. — CVS Caremark reported strong numbers on both the retail and PBM sides of its business — but the real bombshell for analysts on the call was the news that the company has raised its estimate on the number of Express Script patients that CVS feels it can keep from going back to Walgreens.
That's a big boast. But Rite Aid, too, likes its shot to keep the ESI customers who at one time frequented Walgreens' pharmacies to fill their prescriptions. And Walgreens, for its part, reminds analysts that there was a reason those ESI patients were filling their prescriptions in the first place. So the Chicago retailer is confident that they'll be able to entice many of their former patients to return to the pharmacy fold. But in the end, who's really going to capture that coveted ESI patient? Will they stay, or will they go?
And that all depends on what each of these retailers do to grow their respective businesses going forward. The one big difference between CVS, Rite Aid and Walgreens before the Walgreens/ESI split, and after? Loyalty cards. That's where we think the battle for the customer might be won or lost.
It's certainly a big issue, as outlined by DSN's recent coverage of the loyalty wars raging between the pharmacy operators.
Champions of today’s best-in-class loyalty cards — and that would include each of the drug store chains mentioned here — are looking well beyond using simple discounts to drive shopper behavior. That's low-hanging fruit. The good stuff, the high-up-top stuff will only be reached with the greater adoption of big data mining tools and predictive analytics. Ascertaining what a customer is going to buy before even she knows to put it on the shopping list, and then propositioning a deal on that knowledge, that's what's going to shake out the winners and losers. Because armed with that kind of knowledge, the best-in-class retailers will be able to construct a steady stream of personalized offers catered to their highest-profit customers and enticing them to walk into their respective stores.