Mailing centers becoming latest traffic-building strategy

Drug Store News, Feb 19, 1990

Mailing centers becoming lastest traffic-building strategy

Drug Store News National Roundup

Increasingly, drug chains and independents are adding mailing centers to their arsenal of traffic-building strategies. Often, these are but one component of a comprehensive service area, where a designated employee can accommodate a variety of customer needs at one counter.

Some drug store retailers are managing to profit from these operations. Here's how three--Standard Drug in Virginia, Snyder Brothers in Minnesota and Loomis Drugs in Florida--are providing mailing services to customers:

Standard Drug, Virginia

Standard Drug will soon be operating Package Express Centers in eight stores, when its latest remodel is done.

"We bought the business and operate it, and they [Package Express] supply scales, cabinets, forms, signs and other supplies," said Bob Puffenbarger, vp-store operations.

Standard's mailing services started about one-and-a-half years ago. "We were putting in one-hour photo centers and wanted to create a service center," Puffenbarger explained.

The centers sell stamps (at no markup), money orders and lottery tickets and offer key-making. Through an affiliation with Ticket Center, the centers also enable customers to buy tickets to events in Washington, D.C., and Richmond, Va.

The service centers are usually positioned up front, except in mall stores, where the center may be near the back entrance from the mall. "Anyplace we put service centers, we put mailing centers," he said, adding that that's usually in high-traffic and larger stores.

Standard also profits from package delivery, through upcharging on UPS and Airborne Express charges. "We make so much per package--it's a profit center for us," Puffenbarger said. Standard neatly houses mailing supplies underneath the counter, and cross-merchandises them in the stationery department.

Snyder Drugs, Minnesota

Although Snyder Brothers makes it clear in window signs that the mailing outlet inside is part of the U.S. Postal Service, "it backfires on us" if a package doesn't reach its destination satisfactorily, said vp-general manager Bob Ackerson.

Snyder Brothers has postal outlets in 11 of its 20 stores, mostly in suburban areas here. "We've done it for 10-12 years," Ackerson said. "It's a traffic draw, and business might suffer if we took one out."

Snyder Brothers' studies show that the many people who use the service buy something while they're in the store, said controller Tom Bolfing.

The mailing outlets are contract postal stations, subject to U.S. Postal Service guidelines for distance from the main post office or a branch. "The post office has to feel customers need another outlet," said Ackerson. The post office pays the merchant a specified amount each month to provide the service.

When the outlets get quite busy, especially around holidays, running them is a full-time job, and sometimes other employees or the store manager have to help out. Plus, "We handle lots of stamps and money, and any mistake tends to lead to a shortage," Ackerson said. The outlets also handle parcel post, certified letters and insured packages.

Such an outlet is obviously needed in small communities that have no post office, but even in a suburban area, it supplements local postal service by extending service availability. Ackerson pointed out. Snyder Brothers' store hours--9 a.m. to 9 p.m. weekdays, plus weekends--are considerably longer than the post office's.

Loomis Drugs, Florida

Loomis Drugs, in Orlando's upscale Marketplace Shopping Center, has offered mailing services for about six years and recently tripled the space to add customer services.

The mailing service was originally a U.S. Postal Service substation, but after a U.S.P.S. branch opened nearby, Loomis continued the service, calling it the Mailing Depot.

In addition to mailing, the enlarged space allows Loomis to offer such services as key-making; a fax machine service; a copying service; and Lotto ticket sales.

"We've really gotten behind this in a big way," said store manager Ed Minnis. "It's not only a good way to build traffic, but the profit [from the various services] adds up."

The Mailing Depot, tended by one full-time and two or three part-time employees, is located to the right of the pharmacy in the back, to draw customers through the store.

On the wall near the depot is a 70-foot department that includes mailing supplies--gift and mailing boxes, tape, mailing envelopes and bubble wrap--and Loomis's extensive school and office supplies department.

In addition to regular customers, tourists, who are plentiful in this city, come in for stamps, postcards and to have souvenirs packaged and mailed home, to avoid having to carry them home on the plane. An added convenience is that the Mailing Depot is open until 6:30 p.m. (Loomis plans to extend the hours to 10 p.m., when the store closes weekdays.)

Mailing service includes UPS, the United States Postal Service and Federal Express, with UPS and U.S.P.S. pickups twice a day.