Ben Sprecher's RetailWire Blog

June 25, 2010

FROM RETAILWIRE:
Fortunately for Rite Aid, the company's stock has climbed back over the dollar mark. The drugstore chain even got a boost this week when it reported a loss narrower than many had been predicting for the chain. Is Rite Aid on the right track?

MY COMMENTARY:
The broad roll-out of the wellness+ program is the key element to watch.

Rite Aid has a great retail footprint, but if they fail to enroll the help of their brands in getting shoppers to buy more each trip and shop more frequently, then they will be squandering a huge opportunity. Brands have the resources (both financial and human) and the drive to contribute dramatically to Rite Aid's success, as long as Rite Aid provides the brands with a compelling vehicle for doing so. The wellness+ program could give Rite Aid a valuable carrot to dangle in front of brands: access to detailed shopper insights and targeted shopper marketing.

Rite Aid's challenge will be in providing a compelling package of insights, access, and marketing execution without creating a huge burden internally. Traditionally, retailers have opted to build this capability themselves (as with CVS's ExtraCare system), or buy the expertise (as Kroger did with dunnhumby), each of which can cost many millions of dollars and take years.

I think Rite Aid would be better served by finding a technology platform that can enable this capability without breaking the bank.

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Rite Aid Looks for Better Results

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