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Q&A With Bill Renz, Vice President Of Consumables & Photo

Bill RenzBill Renz, a 13-year veteran of Rite Aid’s Category Management team, has worked in nearly every category the retail drugstore industry has to offer. As Vice President of Consumables and Photo, Bill oversees a team that includes Tim BeckesMatt BoyerLane EmleyPaul HarringtonBrian Shanahan and Val Stansfield.

@Rite Aid recently interviewed Bill to discuss opportunities to grow sales in the consumables division, new opportunities with the company’s photo business and how supplier partners are using Rite Aid’s 1010 data program to fuel innovation.

Q: What are the current challenges and opportunities in the categories you oversee?

A: One of the key opportunities is growing the food business. We want to give customers a compelling reason to use our stores as a “fill-in” trip where it’s more convenient to visit our stores than maybe a larger mass retailer. Another development is increased competition in our liquor business. We’re focused on protecting and growing that business as Walgreen’s re-enters the market and we experience increased competition from the dollar channel. With carbonated and non-carbonated beverages, we’re focused on creating the high foot traffic that drives that business.

With candy, we’re performing very well, but we have initiatives to help grow this business as well. We’ve taken some of the seasonal candy segments and worked them into the basic candy program with snack-sized packaging. The key is figuring out how to manage that profitably and we’ve made a lot of headway there. With household chemicals, we’ve done a very good job of managing the balance between sales and profit.

Q: Rite Aid recently unveiled its new “My Photos, My Way” website. How will this impact the company’s photo business?

A: The photo business has been a challenge for us, but I’m proud of our new website because it allows us to be competitive in the industry. We’re conducting e-commerce on the site by allowing our customers to pay online for photo prints and photo services. Customers can have items shipped directly to their home and we’ve also added better tools for creating personalized photo gifts. Our focus now is getting the value message out there about our new site and what it has to offer. The more we leverage the website and the more we leverage equipment in the store, the more profitable it becomes.

Q: How is the new Wellness store format evolving in relation to your categories?

A: My feeling is that the Health and Wellness store format is the best in our industry. It has a modern look, a spacious feel, the separate “him” and “her” beauty aisles and Wellness Ambassadors for excellent customer service. The primary focus is on health and wellness, so the health and beauty categories have been a priority. Now is a great time to address the consumables side to take advantage of the opportunities we have in healthy food and snack offerings. We also want to improve the overall look and feel, get the product adjacencies right and improve the overall shopping experience. And we’re also doing some interesting things to better utilize the photo space as we evolve toward a self-serve kiosk environment. We want to give our customers a more private photo experience while keeping them close to the sales counter so that they can easily receive customer service. These stores focus on health and wellness but they’re also about finding innovative ways to connect with our customers, so we will keep testing new approaches.

Q: Speaking of innovation, it’s a key area of focus right now. How does this focus impact your decision-making and approach to doing business?

A: We talk about innovation every day. A lot of it comes from the leadership of [Executive Vice President of Merchandising] Tony Montini and [Chief Operating Officer] Ken Martindaleencouraging our teams to bring innovation to our businesses. We’re not afraid to test and learn, where in the past, it may not have been as much of a priority. Right now, for example, we have a Hispanic initiative that allows us to use a small group of stores to test ideas or items that support Hispanic customers. We’re testing several innovative new items and merchandising approaches and working with our supplier partners to make sure they’re scalable.

Q: How has wellness+ affected your business?

A: It’s having a very positive effect. We believe wellness+ is the best loyalty program in the industry and gives us a competitive advantage. We now have 47 million members and the program has been a resounding success. It’s easy to understand because it’s points-based and rewards consumers for most of the front-end products they buy. And the pharmacy component is huge. In most states, customers are getting points for filling most of their prescriptions. The program gives our category managers an opportunity to create deeper discounts for our customers.

Q: The wellness+ program also allows Rite Aid to provide 1010 data, which gives participating supplier partners the opportunity to see detailed statistics surrounding their items. How has this affected business?

A: For supplier partners who have embraced the program, I’m seeing a big difference versus suppliers who do not participate. The most successful supplier partners have allocated resources to mine and interpret the data. The beauty of 1010 data is that the information gleaned from the consumer really opens up a different way of thinking about how we manage our business and how we think about the customer. Our supplier partners often say that it’s the fastest system out there.

The big challenge is what to do with the information once you have it. What I’m seeing now is those supplier partners who have really embraced 1010 data are using it to fuel innovation at a higher level. A good example is that one of our supplier partners examined this data and used it as the basis to change their candy fixtures. Now our mutual candy business is off the charts. 1010 data also allows us to change courses when something isn’t working. It creates the opportunity to truly know what is happening within your business as opposed to thinking that you know.