Rite Aid’s ‘Retail Evolution’ Focus of 2015 Supplier Conference
Rite Aid leaders invited supplier partners to “evolve with us” as they discussed the company’s evolution into a retail healthcare company at the 2015 Rite Aid Supplier Conference held September 28-30 in Hershey, Pa.
CEO of Rite Aid Stores and President of Rite Aid Corporation Ken Martindale opened the meeting by thanking supplier partners for their willingness to collaborate, innovate, test new ideas and learn from those results. He credited these partnerships for helping Rite Aid navigate a financial turnaround and declared that the company is now focused on its growth and transformation into a retail healthcare company.
“The evolving needs of our customers, the emergence of new technologies, and the historic healthcare transformation have all challenged us to redefine the way we do business,” said Martindale. “At Rite Aid, we’re looking to the future, building our vision for success and confidently stepping forward.”
Martindale highlighted company milestones of the past year, including the introduction of RediClinics in select Rite Aid stores, a partnership with other well-known brands to launch wellness+ with Plenti and the acquisition of EnvisionRx, a national, full-service pharmacy benefit management company.
Martindale outlined the four strategic initiatives that will help Rite Aid succeed in the highly competitive healthcare marketplace of the future and continue its evolution toward becoming a successful retail healthcare company:
1. Rite Aid Health Services. The company will continue to deliver personalized, convenient, and affordable health care services and innovation that promote community health and deliver improved patient outcomes.
2. Front End Transformation. Rite Aid will continue to evolve the front end of the store by strengthening product assortment and healthcare services to provide a fully integrated health solution that exceeds our customers’ needs and expectations and goes beyond the physical store surroundings to a broader, more customer-centered approach to services, products, and loyalty.
3. Create a Seamlessly Connected Customer Experience. Whether interacting with customers in the store or on their phone, tablet or home computer, the company will focus on creating an integrated experience across all channels.
4. Build a New Service Framework. Rite Aid is developing “The Rite Aid Experience,” a new Service Framework that clearly defines Rite Aid’s common purpose, service standards and service behaviors to create an environment in which customers are the focal point of all daily business decisions and associates deliver and sustain this unique experience.
Rite Aid Executive Vice President, Chief Financial Officer and Chief Administrative Officer Darren Karst next presented an overview of the positive financial results the company has achieved in recent years.
“Although our store base decreased by 144 stores from the end of Fiscal 2011 to 2015, the average store’s productivity has increased dramatically,” Karst noted. “This productivity improvement, along with improved gross margins and better management of our expenses, has led to significant increases in key metrics like Adjusted EBITDA, net income and our leverage ratio.
“This year, we’ve made some strategic expense investments that we think will have great long-term value, like new RediClinics and our rollout of wellness+ with Plenti,” Karst added. “Our key business initiatives, including the substantial investment we’ve made in our stores over the past several years, continue to contribute to our growth and will give us even more strategic flexibility going forward.”
Rite Aid Senior Vice President of Marketing John Learish focused on the impact of the company’s wellness+ with Plenti coalition loyalty program that launched in May.
“Wellness+ with Plenti is indeed the next step in the evolution of our seamlessly connected customer experience,” said Learish. “It plays a key role in how we’re meeting our customers’ needs for products, services, and value—giving them more reasons than ever to make Rite Aid their retail healthcare destination.”
Learish explained why this innovative loyalty program marks the next great differentiator between Rite Aid and its direct competitors, citing its appeal to wellness+ customers who now have the added value and flexibility of Plenti points that can be redeemed at Rite Aid and also at certain other Plenti partner locations, in addition to their existing wellness+ benefits.
“The launch of Plenti was a huge and extremely complex endeavor for all of us at Rite Aid—as well as for our partners in the Plenti coalition,” said Learish. “We’re continuing to fine tune our processes, our messages, and our training and we’re continuing to see a positive impact. With the support of our supplier partners, we will continue to unlock the tremendous power and potential of this revolutionary loyalty program.”
Tony Montini, Rite Aid executive vice president of merchandising and distribution, elaborated on the four strategic initiatives introduced by Martindale by describing some of the innovative methods the company is using to transform itself to better meet the needs of customers and patients.
“Rite Aid is transforming the front-end business to provide consumers with a combination of products, healthcare services and experiences that are not commonly found in other retail settings,” Montini said. “With our evolving Wellness store format, innovative at-shelf educational merchandising, specially trained associates in key categories like Beauty and Vitamins, and focus on delivering a seamlessly connected customer experience, we are well on the way to becoming a leading retail healthcare company.”
In closing, Montini credits partnerships with Rite Aid supplier partners as a key factor in this success. “It’s quite a challenge to continually develop new ideas and create solutions for our customers,” he said. “But our supplier partners continue to bring us new and unique merchandising approaches that help us to keep evolving to meet the changing industry landscape and the needs of our customers. With thank them for their engagement and the innovative spirit that is helping to fuel our retail evolution.”