New plan to draw Rx customers to front-end

Drug Store News, July 14, 1997 by Allene Symons

SAN DIEGO -- Having studied the shopping habits of prescription customers for two years, the NACDS/ American Greetings Research Council has developed a program designed to convert drug chain prescription customers into front-end shoppers.

The council, which consists of representatives from the National Association of Chain Drug Stores, American Greetings and eight noncompeting drug store chains, Medic Drug, Snyder Drug, Harco Drug, Hi-School Pharmacy, K&B Services, Lewis Drugs, Longs Drug Stores and May's Drug Stores, revealed its findings at the NACDS Marketplace conference last month.

Explaining the need for the project, Jim Harrison III, president of Harco Drug, said, "Prescription sales now represent almost 40 percent of total drug store sales, up from almost 20 percent 12 years ago. And this comes at a time when pharmacy profit margins are shrinking dramatically."

Added Bob Berman, vice president of buying and merchandising for May's Drug Stores, "More than ever, the front-end of the store is now the key to the future of the drug store business."

The program is based on three concepts, the Convenience concept which includes buying stamps an] having a beeper to notify the consumer when a prescription is ready; The Added Value concept, which rewards customers with special values and services, and the Health & Beauty concept, which focuses on helping the family stay healthy, and look and feel good. All of the concepts have been tested in the stores of the drug chain council members which are located in different geographic regions of the country.

Preliminary studies showed that the Added Value concept was preferred by the greatest number of consumers, with frequent shoppers preferring Convenience and infrequent shoppers preferring Added Value. The Health & Beauty concept was the least preferred of the three in the tests, but was especially appealing to younger drug store customers and infrequent shoppers.

The next step was to create a single concept incorporating the best aspects of the three test concepts. The result is the Well Worth It market test program., which is designed to convey customer appreciation, health and value.

Components include a monthly direct mail piece offering health advice, coupons and a frequent shopper card offering savings on front-end merchandise. Another component is while-you-wait coupons for customers distributed at the pharmacy counter as an incentive to purchase non-prescription merchandise.

The Well Worth It theme is supported with in-store signing, banners and staff buttons.

To test the concept, each of the eight drug chain members has installed the concept in three test stores and identified three control stores. Initial reaction to the test concept showed that prescription customers will shop more often for non-prescription products in the new Well Worth It concept store, and the customer loyalty program encourages customers to buy more while waiting for a prescription.

Results of the next phase will be presented at next year's NACDS Marketplace.