October 16, 2003

Chain Drug Stores: Nice Article on CVS and Rite Aid

Both have developed a group of young, bright, eager and talented middle managers who are being allowed, even encouraged, to think in ways that chain drug retailing often discouraged in the past. As a result they have come up with new ideas, new products and new ways of serving and satisfying the customer.

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In the East, it's very much a CVS, Rite Aid world
By David Pinto

The coming chain drug store battle for sales, shoppers and market share will have as its venue the eastern United States. It will have as its opponents CVS and Rite Aid.


These two drug chains, which have traditionally taken a back seat to Walgreens� superior results and more aggressive storeopening strategy, have come into their own. Both are stronger, more exciting and more competitive than they�ve been at any time in their history. And in an increasing number of East Coast markets both have begun, or will soon begin, seriously competing against each other.


No drug chain is getting more things right today than CVS � or marketing its stores and brand more creatively. After a period in which the execution didn�t always match the creativity or grandiose thinking of the chain�s marketing programs the Woonsocket, R.I.-based drug chain has gotten the right people with the right ideas into the right jobs. As a result, excitement and enthusiasm � two qualities that sometimes proved elusive in the past � abound.


Moreover, there is much to be excited about. The retailer�s newest beauty care sections are the best in the industry. The Lumene cosmetics and skin care line now rolling out to 1,000 stores shows every initial indication of exceeding the retailer�s fondest hopes for it.


The chain�s new skin care centers are attracting customers who have never before bought skin care products at a CVS � or in a drug store. Moreover, they are lured not only by the assortment but by a range of support services that includes beauty advisers equipped to offer diagnostic testing. This excitement is reflected in the stores, most notably the recently opened 20,000-squarefoot unit in Wakefield, R.I., and a new concept store which, after a stunning debut this summer, will shortly be expanded.


As for Rite Aid, that retailer faced a different set of challenges. Specifically, it had to climb out of the deep hole previous management had dug for it. Driven by some of the brightest top managers in chain drug retailing, a clear set of objectives that put the customer first, a series of innovative programs designed to motivate store personnel to build on the retailer�s strengths while striving to eliminate its weaknesses, Rite Aid has emerged from the brink of bankruptcy with a flourish to rejoin the ranks of healthy U.S. drug chains.


Along the way, the retailer has rediscovered customer service and has reinstilled in its workforce a sense of pride in doing a good job well that had deserted it during the dark days of the late 1990s. The stores, by turns either unappealing or difficult to shop, have come alive with new products, new marketing and merchandising strokes, new enthusiasm and new opportunities, and a new emphasis on core drug store categories.


But perhaps the two elements these exciting chain drug retailers share in common are what really set them apart. First, both have developed a group of young, bright, eager and talented middle managers who are being allowed, even encouraged, to think in ways that chain drug retailing often discouraged in the past. As a result they have come up with new ideas, new products and new ways of serving and satisfying the customer. Second, both have learned that suppliers are not the enemy but a potential partner in their effort to serve and satisfy the customer, a powerful ally who understands that if the customer wins, they win. Until now Wal-Mart was virtually alone among mass market retailers in grasping that fact. Now CVS and Rite Aid get it too.


Rite Aid is using a group of suppliers in a formal advisory board setting to help the retailer become more efficient in serving the customer. Utilizing supplier thinking, Rite Aid�s marketing people are developing a more profitable market basket and more potent advertising vehicles, and so driving more, and more-profitable, customers to Rite Aid.


As for CVS, it has made suppliers partners in developing marketing and merchandising strategies uniquely suited to chain drug retailing � and especially applicable to the new CVS stores. To that end, suppliers are designing products, packaging, merchandising and promotional programs that work best in a drug store setting.


This view of major � and even some smaller � suppliers as partners is a refreshing change from the days not so long ago when the retailersupplier relationship was adversarial to the point of bitterness. The relationship still needs fine-tuning, but this is, at the least, a beginning.


And now the fun part: Rite Aid and CVS competing for customers with the best that chain drug retailing has seen in some considerable time.




Note: KIS has years of experience in the Chain Drug sector with a variety of services and application kiosks for this market.
If you are interested please contact info at gokis.net

Posted by Craig at October 16, 2003 07:03 PM