The plus sign that’s part of the Rite Aid wellness+ loyalty program is an apt symbol. The program, launched nationally eight months ago, already has 29 million members, having added seven million members in the past three months alone.
The program’s growth is good news for the drugstore retailer: members’ market baskets are 50% larger than those of non-members, and these members are now accounting for 70% of front-end sales, according to Rite Aid president and CEO John Standley.
The wellness+ program offers tiered rewards, with increasing levels of front-end discounts and health screenings based on the dollar amount of members’ purchases and the number of prescriptions they have filled. Wellness+ members account for 50% of Rite Aid prescriptions. “Excluding New York and New Jersey, which are states that don’t allow points for prescriptions, 64% of prescriptions were filled by patients enrolled in the program,” said Standley during a recent conference call discussing Rite Aid’s third-quarter financial results.
The program is growing in ways beyond the sheer number of members. In Q2, members’ market baskets were 40% larger than non-members’; this quarter, they are 50% larger. In addition, “wellness+ members fill more scripts with us than non-members, probably due to the fact that our best customers are enrolling in the program,” said Standley. “We also see a much higher retention rate for pharmacy customers when they are enrolled. Putting this all together, our data suggests that wellness+ retains and attracts good pharmacy customers, although it is taking longer than we expected to make as big an impact on our pharmacy business as it is starting to make on the front end.”
Frank Vitrano, CFO and CAO, said the combined startup, advertising and supply costs and discounts associated with the chainwide rollout of the program “are estimated to be $32.4 million, with $29.4 million incurred in the first three quarters.”
Rite Aid had $6.2 billion in revenues during Q3, a decrease of 2.4% from the same period last year, a figure that was affected by a 70-store reduction in the retailer’s total store count. Same store sales declined 1.3% during the quarter, and Rite Aid had a net loss of $79.1 million compared to last year’s Q3 net loss of $83.9 million.