Rite Aid: Building a health business around wellness
One year after DSN’s groundbreaking ‘Gets Well’ issue, Rite Aid keeps growing profits and cred with shoppers and Wall St.
One year ago, DSN featured an exclusive report, “Rite Aid Gets Well,” on the cover of the Dec. 10, 2012 issue, examining how the company’s core strategy built around wellness empowerment was helping it turn around its business.
One year later, Rite Aid isn’t just “well” — it’s even better than that.
In September, Rite Aid reported its fourth-consecutive quarter of earnings growth, as the company continues to grow sales and gain momentum around its core wellness-based initiatives, including its Wellness+ loyalty program, its Wellness and Genuine Well-Being format stores and the growing cadre of Wellness Ambassadors that are helping to transform the experience of shopping a Rite Aid store.
Importantly, Wall Street also has begun to reward the company for its efforts. At press time, Rite Aid shares were hovering above the $5 mark, having hit a 52-week high of $5.44 — the last time its stock traded that high prior to that was September 2007. And analysts seem to expect that the momentum will continue.
“Rite Aid reported excellent quarterly results buoyed by strong sales growth and expanding margins. Earnings estimates have thus surged, sending this drug store chain to Zacks rank No. 1 — “Strong Buy,” noted an Oct. 16 update from Zacks Investment Research.
To be sure, there is an undeniable stickiness to the results Rite Aid is putting on the board these days. While the yearlong feud between Express Scripts and Walgreens has long been over, it appears that Rite Aid has been able to hold on to a large number of the customers it picked up in the fray. “Prescription same-store sales of 0.9% tracked ahead of our 0.6% forecast, suggesting Rite Aid is maintaining its share of [ESI] scripts, estimated by the company at about 75%,” noted Goldman Sachs analyst Robert Jones, of the company’s recent second-quarter results.
Just as the program has been a major driver of Rite Aid’s overall growth, Wellness+ also has been a major component of the company’s strategy to retain ESI patients — the loyalty program rewards members 25 points per script where state laws allow.
Here, DSN takes a brief look at two of the most critical factors behind the ongoing turnaround at Rite Aid — its Wellness stores and the Wellness+ card.
Take ‘Dark Horse’ — to win
“If you want to know why we may not pick up some of your brands, it’s because it’s not where we’re going in our journey.”
That’s a snippet of a story about a vendor meeting gone bad that Walgreens group VP beauty, personal care and seasonal Shannon Curtin shared during a recent presentation, “Co-creation and Innovation,” she gave at an event DSN co-hosted with the Mack Elevation Forum, “Seven Ideas to Create the Future.” You can watch it at DrugStoreNews.com/Video.
Critical to success are the need to bring emerging insights, ideas that fill “white spaces” where products and solutions do not exist and ideas for how to execute that vision.
The great brands — big and small — are built that way.
That’s more or less the focus of a new book, “Dark Horse: How Challenger Companies Rise to Prominence,” by Dan Mack, EVP strategic business development for The Swanson Group and managing director of the Mack Elevation Forum.
“From the humble and beloved Wiffle ball and bat to the highly stylized line of Method soap, Purell instant hand sanitizer, Ricola and Amy’s Kitchen organic foods … there is no shortage of dark horses to root for,” Mack noted.
The best companies, Mack explained, bring more than unique products or services to the market; they consistently tap into 10 growth enablers:
- Their business is personal — it’s their identity and it’s about more than profit;
- They listen and are aligned with top customers;
- They use hidden assets to create differentiated value;
- They create a clear business blueprint and share it openly;
- They carefully and wisely pick customers and partners;
- They co-create innovation with customers;
- They move quickly to meet consumer shifts to create new experiences;
- They influence the influencers who help build their brand;
- They are very agile, nimble and seize new opportunities much faster than competitors; and
- Corporate culture operates with a spirit of grace and honor.
To learn more, read the book. Visit DarkHorseBook.com.
Rob Eder is the editor in chief of The Drug Store News Group, publishers of Drug Store News and DSN Collaborative Care magazines. You can contact him at [email protected].
Exclusive report highlights healthcare technology conference Health 2.0
Looking back at the seventh annual Health 2.0 Fall Conference, which was held Sept. 29 to Oct. 2 in Santa Clara, Calif., at the Santa Clara Convention Center, more than 2,000 health information technology entrepreneurs and thought leaders gathered to forge ahead in leading the healthcare revolution through innovative technologies, policies and collaborative ideas. The conference lineup focused on the role of consumers, big data and healthcare marketplaces in forward-thinking companies and the future of health care.
In this exclusive report, DSN talks to Health 2.0 co-chairman Matthew Holt about the evolution of the conference, and DSN profiles some leading exhibitors from the show about how their companies are leveraging technology to improve the healthcare experience for patients and providers.
To download the exclusive report, visit DrugStoreNews.com/redefining-health-care-health-20-bottom-thinking.