Q&A with Bill Bergin, Group Vice President of Health, Beauty and Rite Aid Brand
Bill Bergin is a 34-year veteran of the drug store industry who joined Rite Aid’s Category Management team in 1999. He served as a vice president for 10 years before earning a promotion last year to group vice president of health, beauty and Rite Aid Brand. Bill’s team includes Category Managers Kathy Horton, Ric Clarke, Judy Wray, Marti Cucinotta, Dave Avery and Chelsea Wildman.
Q: Rite Aid’s brand strategy focuses on wellness empowerment, both in terms of the Wellness stores and wellness+. How does this brand strategy affect your decisions on which products to include in our stores?
A: Wellness empowerment is a term that describes the degree to which people want to take responsibility for their own health and wellness. Customers will continue to visit us to manage an illness, but wellness empowerment is more about the process of living a healthy lifestyle on a daily basis.
This obviously impacts the decisions we make in the vitamins, diet, smoking cessation and fitness equipment categories, or any category that allows the customer to take a more active role in his or her well-being. We have also placed special emphasis on these categories in our new Wellness store format.
Beyond that, wellness empowerment is not only about feeling good, it’s also about looking good. For example, skin care and oral care play a key role in maintaining a youthful appearance. So for these categories, there are health components and beauty components to wellness.
Q: Rite Aid has taken a “test and learn” approach to its new Wellness store format. What have you learned from being involved in that process?
A: Our Wellness stores have allowed us to look for new products and services that enhance the shopping experience and our wellness empowerment brand position.
We’ve tested some concepts, like the foot care kiosk, that generated good results while others that haven’t worked out as well. We’ll continue to test new and innovative products, merchandising programs and strategies as we convert additional stores to this new format.
Q: How do you overcome external factors such as this year’s weak cough, cold and flu season to ensure strong performance in your OTC categories?
A: It’s a real challenge. When we have a sales spike from the prior year, like a new item launch, we plan accordingly to help us cycle through and achieve the sales goal. Overcoming a weak cold and flu season is more challenging because we’re well into the season before we can react accordingly. Adding to the complexity is the fact that it’s the largest category we manage. This year, we were able to drive those lost sales in another category. While our cold and flu season sales were negatively affected by warm weather, the warm weather positively affected sales in the allergy category. This offset a significant portion of the sales miss.
Q: Private brand sales tend to grow in a down economy, as has been the case with Rite Aid Brand. But with such prolonged economic uncertainty, do you foresee private brand penetration holding even if the economy picks up?
A: The economy is clearly affecting consumer behavior in our stores. Private brand sales are currently outperforming national brand sales and the trend continues in that direction. When more and more customers have positive experiences with private brand items, that makes it more likely customers will continue purchasing private brand items even as the economy improves.
Q: How has wellness+ affected your business?
A: The health and beauty categories have a higher percentage of sales from our silver and gold wellness+ members than any of the other categories, so that is a big win for our division. It means we’re building loyalty with these very important consumers. We’re being very aggressive with our +Up Reward offers so that we can build even more loyalty and attract new customers as well.
Q: Have your supplier partners in your division seen a benefit from using 1010 data?
A: Suppliers have limited resources to support their brands. The 1010 data program helps them target key consumer segments and spend their trade funding more effectively. More importantly, they gain a much better understanding of consumer buying behavior and can develop programs to leverage this information.
For example, the program allows our supplier partners to determine which other items a customer is purchasing at the same time as their brand items. This allows suppliers to promote and display their brands in conjunction with other items the consumer may be buying. It’s a better shopping experience for the customer, and sales and profits increase.