Supplier Conference 2013: Well on Our Way, Together
“We’re well on our way, together” was the message supplier partners took with them after this year’s 2013 Rite Aid Supplier Conference in September. The journey to wellness, both financially and operationally, has continued to be a strong focus for Rite Aid and, this year, supplier partners joined the company in celebrating the positive results of their mutual efforts.
The conference theme “Well On Our Way, Together” underscored the message that Rite Aid’s turnaround plan is working and the company has a unique business strategy that not only addresses immediate challenges, but also positions Rite Aid for long-term success in a rapidly changing retail and healthcare environment.
Chief Financial and Administrative Officer Frank Vitrano shared with the audience the financial progress the company has made in recent years. “The great news is, based upon our various initiatives to grow sales and drive operational efficiencies such as the Wellness remodel program, wellness+ loyalty program and other initiatives, we’ve been able to offset reimbursement rate and competitive pressures as well as other cost increases to grow EBITDA and report net income,” said Vitrano.
Vitrano told supplier partners that, as the company’s results improve, Rite Aid can continue to reinvest in other areas to improve efficiencies in the stores, like replacing Point of Sale register software; adding new pharmacy workload balancing capabilities; and expanding digital reach with ongoing investments in Rite Aid’s website, mobile and iPad applications.
“While this has contributed to our return to profitability, the real benefit is being able to redirect these dollars from paying interest to increasing our capital expenditures,” said Vitrano.
Following Vitrano’s financial report, President and Chief Operating Officer Ken Martindale shared the company’s strategic road map, which includes Rite Aid’s new wellness-centered mission and vision— “Customers confidently choose us first for their everyday health and wellness needs because we consistently understand and exceed their expectations.”
Martindale said this new vision will help the company achieve an enhanced Rite Aid brand experience. “We want to be the health and wellness provider of choice by delighting customers on each and every visit,” said Martindale. “Our point of difference will be achieved by meeting the needs of our best customers and helping them reach their wellness goals through a higher level of engagement.”
Martindale explained that Rite Aid’s strategy to achieve this vision is manifested in key initiatives such as wellness+, Wellness stores, Wellness Ambassadors, Point of Care compliance program and front-end merchandising centered on wellness-related products.
The wellness+ and wellness65+ customer loyalty programs will play a key role in executing the company’s strategy and achieving the brand promise of “actively working to keep customers well,” according to Senior Vice President of Marketing John Learish.
“Wellness+ has clearly proved its value,” said Learish. “We’re committed to continually evolving the program to keep it fresh and differentiating, including creating new wellness+ customer segments to retain and grow our best customers.”
There are more than 25 million active wellness+ members with more than 4.5 million at the Gold or Silver tier. In late June, Rite Aid launched its largest extension of wellness+ to date, the wellness65+ program for seniors.
Learish says wellness65+ is an example of focused efforts on Rite Aid’s best customers, driving value, relevance, and engagement to develop loyalty in both the pharmacy and the front end (for more information on wellness65+, see Rite Aid Engages Best Customers with wellness65+ in this issue).
Learish also introduced supplier partners to a set of new tools and programs that will strengthen one-to-one marketing capabilities and provide measurable opportunities to increase product sales.
“Our new levels of segmentation intelligence and targeting sophistication have opened an exponential number of opportunities to get brands in front of our wellness+ members to drive measurable, incremental sales throughout the year,” said Learish. “Measurement is the beauty of CRM and one-to-one marketing programs.”
Executive Vice President of Merchandising Tony Montini also emphasized CRM opportunities. He said Rite Aid is creating a new customer value equation — one that is focused on a highly personalized approach to actively working with our best customers to keep them well.
“We’re expanding our health and wellness offerings with innovative concepts that empower our customers and drive business,” said Montini. “We know that health and wellness aren’t just about preventing illness — it’s about living well and feeling good.”
Montini added, “As we actively work to help our customers improve their wellness, we’ll be offering an ever-increasing variety of wellness products and merchandising innovations, including more advanced personal care and diagnostic products.”
Rite Aid’s Wellness stores will continue to provide a stage for testing such unique concepts, and Montini emphasized that the need for innovative ideas and cutting-edge concepts is still very much a top priority throughout the business.
“We need to expand beyond category and merchandising concepts for our Wellness stores to all areas of our business,” he said. “This includes unique promotions and services that reinforce our brand position, omni-channel retail growth opportunities and our wellness+ Customer Relationship Marketing.”
Chairman and Chief Executive Officer John Standley encouraged the supplier community to continue to work with Rite Aid to enhance the customer experience, make informed decisions and think outside the box. “If we continue to collaborate and focus on leveraging these tremendous opportunities, we will be well on our way to even bigger and better accomplishments,” he said.