Rite Aid’s Wellness Format

 

Much has been written and said about Duane Reade’s newest store on New York’s Wall Street, but another chain also opened a major new look in the last few months. Rite Aid has an eight-store pilot project, where stores are being converted into a “wellness” format.

“This really is the model going forward for our high-potential stores,” said Ken Martindale, Rite Aid’s chief operating officer. “You’re going to see a lot of these as we ramp up our remodel schedule this year.”

At first blush, that generates an image of a health-oriented store where beauty takes a back seat. But, that’s not the case in the format where beauty becomes part of the wellness message. Also, Rite Aid is making good use of technology, which can be used to promote beauty, too.

There are certainly broader clinical services in the store. For instance Rite Aid offers year-round vaccinations for 14 diseases. Diabetes management is also a major focus in the new concept. To cement the link between health and diet, the merchandise mix is sprinkled with organic and gluten-free foods.

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This health message segues into beauty were there is a larger than usual assortment of natural personal care items. One unique aspect is a “wellness” ambassador. This adviser carries an iPad that can be used to assist shoppers with questions about over-the-counter medications, but also about cosmetics or grooming items. This could be a solution to the high cost of hiring someone just for cosmetics — the ambassador could assist in many categories.

Physically, the store makes a huge improved impact over traditional Rite Aid units. There’s a woodlike floor that helps direct customers to the pharmacy, but through beauty.

Martindale said the store is getting rave reviews from customers, who call it easier to navigate and shop. That’s hammered home with a new “his” and “her” approach to personal care. After experimenting with a larger men’s grooming department in other stores, Rite Aid carved out a full-blown men’s grooming department in this store. This has all men’s needs including shaving, deodorant and toiletries. This way men can dart to their own section for quick in and out trips. This represents a major change in how merchandise is traditionally stocked for men.

Despite recent rumors of a Wal-Mart takeover of Rite Aid, the chain is chugging along. Rite Aid’s same-store sales increased by 1.9 percent in July. During the four-week period ended July 23, comp sales jumped 3.1 percent on the front end and 1.4 percent  in the pharmacy, including a 151 basis point reduction resulting from introduction of new generic drugs. For the year so far, comp sales increased 1.2 percent over the first 21 weeks of 2010, including a 0.9 percent  increase on the front end and a 1.3 percent increase in the pharmacy.

Rite Aid’s experiments in the wellness look will certainly be closely monitored by the industry, especially the success of the men’s special section.

People, Places and Things

A few words with Revlon president and chief executive officer Alan Ennis, following positive second-quarter results. 

Alan Ennis: From a marketplace perspective, we introduced successful, innovative, high-quality, consumer-preferred products into the global marketplace, and our acquisition of Sinful Colors is transitioning well and performing to expectations. In the quarter, we improved our capital structure by refinancing our bank credit facilities, reducing the interest rates on our debt and extending maturities.

We have some exciting new products we are introducing. We believe that the drivers of profitable growth are first, innovative high-quality consumer preferred brand offering; second, effective brand communication including appropriate levels of advertising and promotion, and third, superb execution with our retail partners to provide optimal in-store offering.

Our results in the quarter benefited from our focus on these drivers specifically. We are focused on our three-year global portfolio plans for our key brands in order to meet the needs of our consumers globally. This enabled us to have a compelling product offering across both our core and new products. Next, our brand communication is benefit driven, compelling to the consumer and consistently delivered across all touch points, including traditional media, in-store and a variety of digital platforms.

What’s In Store

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NPD Reports Prestige Makeup Sales Jump Nine Percent: The NPD Group Inc. said prestige makeup sales increased by 9 percent from January through May to $1.4 billion in U.S. department stores. For the month of May alone, makeup posted its strongest dollar performance, up 11 percent, in the last three years. Prestige makeup segments (face, eye, lip, sets, other color and nail) all posted healthy sales gains in the first five months. The trends in dramatic eyes, soft lip shades, and bold and bright nail colors all contributed to the growth.

 

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