Rite Aid is planning to jump into the drugstore rewards program business next year, taking on Walgreens’ Register Rewards and CVS’ Extra Care Bucks, with a new program of their own that they’ll start beta-testing soon.
In a call with Rite Aid’s stock analysts about their quarter ending 8/29 (see the full transcript on SeekingAlpha), Rite Aid says that, “We’ve launched additional promotions in the front end to encourage return shopping trips. We will soon begin a test in a group of pilot stores of our new loyalty program which we believe will differentiate us because of its emphasis on pharmacy. While we don’t expect it to impact sales this year, we believe we have developed an exciting program that will drive sales when launched nationwide next year…Our new comprehensive pharmacy loyalty program will be in test in a small group of stores in the next few weeks.”
Rite Aid is losing money, but not as badly as this time last year. They’re forecasting lower sales than expected this fiscal year due to the economy. They need something to boost them back into the black and they’re hoping this new program will do that.
In the meantime, they have some “initiatives designed to reward customer loyalty like our rake in the savings program we have going this fall.”
The decision to set themselves apart from the competition with a focus on pharmacy loyalty is a terrible idea. If they’re looking to lure Walgreens and CVS customers away to them, they have to offer AT LEAST what their competition does — with the freebies available on everyday items there and the thought process of “Oh, while I’m there, I’ll fill this prescription,” what’s going to make their competitors’ customers want to make an additional stop at Rite Aid? Rite Aid’s pharmacy rewards will have to be really friggin’ amazing to change those people’s behavior.
And fans of CVS and Walgreens are out there in the blogosphere, singing their favorite stores’ praises. A Google blog search for CVS pulled up over 1.8 million results, for Walgreens, almost 600,000 results. How many people are talking about Rite Aid? Around 250,000.
If people aren’t talking about your brand, they’re not thinking about it. Rite Aid needs a strategy that gets people talking, that gets enthusiastic brand evangelists actively marketing for them. Will a rewards program that pushes only (or primarily) prescriptions fill the bill? I don’t think so.
