While Rite Aid saw its third-quarter 2014 fiscal year sales rise nearly 2%, to %$6.4 billion, its same-store sales for the period rose 2.3% sparked by the June launch of Wellness65+ -- the first chain drug store loyalty program for those 65 and over.
Pharmacy sales grew 3.5% in the third quarter, thanks in large part to Wellness65+ -- according to Trefis, the company that analyzes how companies’ products impact stock prices. What’s more, Trefis says Wellness65+ has helped improve Rite Aid’s front-end sales.
“The Wellness+ program helps strengthen the relationship with customers in turn increasing the number of loyalty shoppers at Rite Aid,” Trefis reports. “For Q3 2014, front-end same-store sales in the Wellness Stores exceeded the non-Wellness Stores by 3.2%, whereas script growth in the Wellness Stores was 1.4% higher compared to the non-Wellness Stores. Loyalty programs remain a key component of Rite Aid’s health and wellness offering. The company made significant progress in transforming its stores into true neighborhood destinations for health and wellness in Q3 2014.”
During the quarter, Rite Aid remodeled 94 stores and relocated four stores, bringing the total to 1,117 wellness stores, which now represents a quarter of its stores. It remains on track to reach its target of 1,200 Wellness Stores by the end of this year.
Rite Aid recently launched its Wellness65+ program aimed at senior patients who are known to be higher spenders in the pharmacy category. By the end of Q3 2014, about 1.3 million senior citizens had enrolled in the program and Rite Aid claims that the program is attracting new customers as well as strengthening the loyalty of its existing members. According to a 2012 RAND Health study, wellness programs are the rage in corporate America, with half of surveyed companies offering wellness promotion programs.
In August John Learish, Senior Vice President of Marketing for Rite Aid, told Loyalty 360 that with prescription and medical information becoming more portable and subsequent promotional tactics to incent transferring of prescriptions, “the once very sticky pharmacy business has seen a lot of customer churn.”
Learish said that was one of the primary reasons Rite Aid developed Wellness65+.
“Since the program’s inception, we have dramatically improved customer retention and proven the value of our best customers,” he said at the time. “Wellness65+ is a true loyalty program in that it rewards customers incrementally as they increase their spending with us.”
Wellness65+ is based on the health and wellness offerings of wellness+ with tailored programs for seniors built on individualized solutions for helping them live healthier lives. Wellness65+ is designed to give seniors an enhanced experience that includes a special savings day for them the first Wednesday of every month - wellness65+ Wednesdays - as well as the opportunity to develop a deeper relationship with their trusted Rite Aid pharmacist. Members will be automatically eligible for an expanded pharmacist consultation to give them the extra support they need to maintain their health and wellness.
What’s more, the program promotes the distinctive offerings of Wellness65+ including the personalized pharmacist consultations, 20% off the first Wednesday of each month for seniors, and the ability to earn one point for every dollar spent on prescription co-pays, including those supported by government-funded programs up to a maximum of 25 points per prescription (except in New York and New Jersey).
Rite Aid has more than 1,900 Wellness Ambassadors providing personalized levels of customer service in its Wellness Stores. Wellness Ambassadors continue to play a critical role in driving flu shot awareness, wellness65+ enrollment and its community engagement efforts.
“We believe that the Rite Aid company will benefit from positive trends in the pharmaceutical industry: 1) the aging U.S. population; 2) new drug therapies; and, 3) the Affordable Care Act expanding insurance to millions of Americans,” Trefis predicts. “However, we think that the intense competition from relatively larger players, including Walgreens and CVS Caremark can limit Rite Aid’s growth potential in the future.”
Rite Aid expects sales for fiscal 2014 to come in between $25.3 billion and $25.425 billion.