In-store kiosks create convenience
Self-service is becoming more prevalent as consumers grow accustomed to using kiosks for everything from self-checkout in the supermarket to checking in for their flights. Experts estimated that by 2016, 3 million kiosks will be in use globally.
Retailers have learned to use kiosks as low-maintenance traffic-builders. Redbox, which marked its 2 billionth rental in March 2012, has become a dominant force in value DVD and video game rentals. In-store kiosks also could be the key to merchandising higher-priced shrink-prone electronics. Already used in rest stops and airports, the kiosks hold must-have ear buds, flash drives and headphones — convenience items drug stores can’t afford not to stock.
Photofinishing kiosks may take on new uses as images move online. Consumers already can print stationery, business cards and invitations on photo kiosks. If consumers embrace creating personalized cards, photo kiosks could grab share from online greeting cards.
What your shoppers say about you: Meet C2B Mobile Insights
“We want to make sure we’re talking to our members where and how they want to be spoken to.”
That was something Sam’s Club VP health and family care Jason Reiser said to me for the special report we did on the company that appeared on the cover of our April 2 issue. In case you missed it, you can download the full report here.
Sam’s Club isn’t the only one that feels that way. The Drug Store News Group feels the same way — except for us it’s not about members; it’s about our readers and users, both in print and online.
Case in point: Perhaps you’ve noticed the videos we have been producing as part of our new DSN.TV Executive Viewpoint Series, like the one we did in support of our Sam’s Club report or the one we did with CVS Caremark president and CEO Larry Merlo for our March 12 exclusive report on that company. It’s an exciting new way for us to communicate with our users — the way they want to connect with us.
One area we know our readers and users want more help is consumer insights — what can we tell you about what the consumer is doing today and how they will behave tomorrow.
That is why we are so excited to introduce DSN C2B Mobile Insights. Powered by the Engage.Me mobile-enabled/geo-trackable platform, C2B Mobile Insights is connecting with consumers in real time where they live and shop via their smartphones. How does it work? Through our partner Engage.Me’s extensive network of users, we can ask thousands of consumers all over the country — or target one specific area or region if we want to — anything we want about how they shop, what they buy and how new products, news events and various trends are reshaping those decisions everyday.
Check out our latest C2B Mobile Insights report here. Given all the attention around the hotly contested Express Scripts-Medco merger, we thought we’d ask our C2B consumer reporters, if all things were equal and every pharmacy accepted their insurance, what would be the most important factors in choosing a pharmacy? What you see here is just a taste. If you want the complete results, you’ll have to log on to to DrugStoreNews.com to see the full report, including how many are using multiple pharmacies and why; what they like — and what they hate — about their primary pharmacy; what they expect when shopping for OTCs; and how they feel about pharmacist consultations.
DSN C2B Mobile Insights is a new, monthly, premium content feature for registered DrugStoreNews.com users. C2B Mobile Insights also is available for special customized reports. To learn more about how to utilize C2B Mobile Insight’s field research capabilities for your company, contact me at [email protected]
RAD inches closer to profitability
WHAT IT MEANS AND WHY IT’S IMPORTANT — Thursday’s results marked the fifth consecutive quarter in which Rite Aid increased its same-store sales. And at the rate it’s currently going, there’s a good chance the country’s third-largest retail pharmacy chain soon could become profitable, even though it expected to post losses in 2013, albeit even smaller losses than in 2012.
(THE NEWS: Rite Aid announces fourth quarter, fiscal year 2012 earnings. For the full story, click here.)
At the core of the chain’s strong performance lies its Wellness+ loyalty card program, not to mention initiatives like the Wellness store format. Announcing its third quarter 2012 earnings in December 2011, president and CEO John Standley appeared less than impressed with the performance of the new stores and speculated that it was the presence of Wellness Ambassadors that made a big difference. This quarter, however, the stores have seen a noticeable rise in comps, particularly at the front end.
But one significantly influential issue is the ongoing dispute between Walgreens and Express Scripts. Rite Aid — like most other pharmacy retailers — has sought to benefit from the flood of ESI patients now unable to fill their prescriptions at Walgreens, and it has been largely successful with a 3.7% improvement in adjusted EBITDA coming from ESI script transfers. Analysts expect further increases in EBITDA if the Walgreens-ESI dispute remains unresolved.
At the same time, the dispute and the ESI-Medco merger have renewed speculation about an acquisition of Rite Aid by Walgreens. Neither Rite Aid’s executives nor Edward Kelly, the Credit Suisse analyst who originated the latest round of speculation, mentioned it during the retailer’s earnings call Thursday, but Kelly has continued to support the idea. "[Rite Aid’s] stock could benefit from continued M&A speculation as we believe a takeout by Walgreens makes sense — especially in light of the recently concluded ESRX/MHS transaction," Kelly wrote in a report following the call.
But Guggenheim Partners analyst John Heinbockel disputed the notion, having already written that such an acquisition would present too great a risk for Walgreens, considering that it could lower Walgreens’ bond rating and create a headache in terms of the costs of converting stores and closing others, not to mention the Deerfield, Ill.-based chain’s relative lack of experience in large-scale acquisitions and the conservatism of its board.
And overall, Rite Aid doesn’t look like a chain that’s trying to set itself up for acquisition. Under the leadership of Standley and chairman Mary Sammons, the company has pursued organic growth and has been reaping the benefits in the form of growing sales and smaller losses.