Rite Aid Reaps Rewards With Seniors

Wellness65+ Loyalty Program Draws 930,000 Sign-Ups in Demo Ignored by Many

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A lot of marketers don't spend much energy courting them, but seniors are proving key to Rite Aid's turnaround efforts.

Wellness+
Wellness+

In the first two and a half months the drugstore expanded its existing wellness+ loyalty program with a new national effort targeting seniors, more than 930,000 seniors enrolled in wellness65+.

It's a lucrative demographic for Rite Aid, given the number of prescriptions seniors fill and the volume of monthly nonprescription purchases they make.

Rite Aid has been lagging behind its peers CVS and Walgreens, but it's been showing signs of improvement recently. Last spring it reported its first profitable year since 2007. "Our core business is pharmacy -- that's 70% of revenue -- and people filling prescriptions are predominantly elderly," said John Learish, senior VP-marketing at Rite Aid. "[Seniors] are very valuable. Once you acquire them, they're very sticky, hard to move and very profitable."

Seniors are the fastest-growing demographic in the country. According to the U.S. Census Bureau, the number of adults aged 65 to 74 is projected to grow 51% to 32 million between 2010 and 2020. The number of people 75 and older is expected to grow 20% to 22 million during that time.

Mr. Learish conceded it was tough persuading seniors to switch to Rite Aid. Most had no incentive to switch pharmacies, given they filled prescriptions through Medicare Part D, a government-funded program.

Until recently, retailers were prohibited from attaching rewards programs to government-paid prescriptions. But when that changed, Mr. Learish said the retailer saw an opportunity. Wellness65+ offers one point for every dollar spent on co-payments for prescriptions, in addition to in-depth consultations with local pharmacists. The first Wednesday of each month, members receive 20% off purchases and free health screenings. "This customer is not going to risk disrupting their medication routine and the trust they have in their existing provider for a coupon," Mr. Learish said.

A nine-month mobile tour will hit 30 key markets. Rite Aid is also investing in a TV campaign running in 21 major markets, as well as radio, digital, social media and print executions.

The retailer spends about $50 million annually on measured media, according to Kantar Media. Its agency is Marc.

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