Rite Aid finds the magic words: Wellness empowerment
The entirety of Rite Aid’s marketing message can really be broken down to just two simple, yet powerful words: wellness empowerment.
It is those two words that have helped inform Rite Aid’s entire wellness platform, from the introduction of its wellness+ loyalty card program in 2010 to the rollout of its new Wellness stores, beginning in 2011. It is those two words that have helped reinvigorate Rite Aid’s business — from how the store is formatted and how it looks, to the energy that pops among Rite Aid’s Wellness Ambassadors.
“Wellness empowerment is providing the information, products, resources and/or tools that are going to help customers make smarter decisions,” John Learish, SVP Marketing, said. “It’s bringing the pharmacist out from behind the counter and helping our customers make informed decisions about the front-end products. It’s providing proactive health screenings. It’s giving customers tools to easily manage their prescription regimens.” It’s the interactive and engaging services that help Rite Aid patients make better, informed health decisions, Learish said.
When developing Rite Aid’s loyalty program, the program needed to deliver on one aspect really well: the ability to bring expertise from the pharmacist and value from the manufacturer and actually place it in the consumer’s hands at the shelf — readily available information that the consumer could access in an effort to make the best wellness decision for them. That is how Rite Aid defines wellness empowerment.
“When you look at the loyalty programs that are out there today, they’re discount programs,” Learish said. “We said, in order for this to really support our brand positioning, this had to be more than a discount card. This had to be a brand card as well. So, as we carefully conceived the benefit design of the program, we also spent a lot of time testing, doing conjoint analysis on different combinations of benefits.”
The truth is Rite Aid’s wellness+ loyalty card broke some new ground in the drug channel. It was the first card to fold experiential health services into a loyalty program, and after only two and one-half years on the market, the program boasts 25 million active members.
For example, one of the first benefits for customers who signed up for Rite Aid’s wellness+ loyalty program was 24/7 telephone access to a pharmacist. That was soon expanded to include chat functionality accessible online or from a smartphone.
And, at a relatively low-point threshold, Rite Aid wellness+ members were able to take advantage of a free health screening. “We partnered with Quest Diagnostics and were able to give customers a free blood-glucose and cholesterol screening when they got to 500 points,” Learish said. “What we wanted to do was to make sure we provided real value and the services that customers wanted.”
And wellness+ members are heavily rewarded for their pharmacy business — one point is earned for every dollar on the front end and 25 points for every prescription filled (in states where allowed by law). “All of our communication from the beginning has been prescriptions are the fastest way to get to a 20% discount,” Learish said. “When you look at the value equation that we offer, it is by far the richest program in the industry.”
It’s a program that encourages cross-shopping between the front end and pharmacy. The age-old industry problem, or what was perceived to be a problem, was the customer would fill their prescriptions and not shop the front end. “Really, what we found is quite the opposite,” Learish said. “We have many customers who shop our front end but not our pharmacy. What we learned from the [loyalty] data was they were buying things on the front end that would indicate they do fill prescriptions,” he added. So, from the beginning, the loyalty program was designed to entice a front-end shopper to fill prescriptions at Rite Aid and vice versa.
And it was the first retail pharmacy loyalty card to segment its customers across a “good, better, best” spectrum with a tiered status — plus, bronze, silver and gold. Rite Aid’s better and best customers are visiting the store more often — approximately half of those customers with silver or gold status walk through Rite Aid’s doors at least once every week. And they’re spending significantly more.
The point threshold for a bronze member is 250 points, and wellness+ members who reach this threshold realize a 10% savings on all store-brand purchases for a year. Silver members, a threshold reached with the accumulation of 500 points, realize a 10% savings on most anything in the store for one year and can take advantage of a wellness reward of their choice, such as a gym membership, a health/fitness magazine subscription or a health screening. Gold members with more than 1,000 points are afforded 20% off all purchases for one year.
“The payout at the gold level versus what we’re investing has proven to be worthwhile,” Learish said. “When you look at a wellness+ member versus a nonmember, regardless of what tier they’re in, every single metric is dramatically higher, whether you’re looking at front-end basket, units per basket, prescriptions per basket or margin. And, as wellness+ members climb the tiers, those metrics grow increasingly higher,” Learish added.
Those tiered members also contribute to greater consumer learnings from the shopping data aggregated by the program. “Supplier partners are working with us to really develop targeted communication programs,” Learish said. “They can identify target segments. They can set up test marketing campaigns through us to be able to send relevant communications, and they can stagger the offer based on the value of that customer. They’re able to really get a lot smarter about the way they’re incentivizing customers.”
And Rite Aid’s doing the same thing, of course, creating a new level of experience for the wellness+ member: personalization. “Our emails are dynamically populated. We are taking transaction data and populating the most relevant offers against different customer segments,” Learish said. “What the data gives you more than anything is the ability to be relevant to your customers.”
As discussed during the company’s September earnings call, Rite Aid’s wellness+ loyalty program boasts 25 million active members — members who have used their card at least twice in the past six months — representing an 8% increase as compared with a year ago. Additionally, wellness+ members accounted for 74% of Rite Aid’s front-end sales for the chain’s most recently reported second quarter and 68% of prescriptions filled.
And like Rite Aid’s Wellness store formats, the company is continually evolving its offer. In January, it introduced Load2Card, a new coupon management program that allows all wellness+ members to save, manage and redeem Rite Aid and manufacturer coupons available throughout the internet via their wellness+ card. And in September, Rite Aid introduced a new feature that loads its +UP rewards directly to the cards of wellness+ members who earn them.
That continual evolution of the card is important, Learish added, because, on average, customers have as many as 14 loyalty cards in their wallet at any given time. Rite Aid wants to make the short list with its customers — it wants to be the one card they use in the drug channel.
How does it intend to get there? Two words: wellness empowerment.