Rite Aid Corporation has selected Havas North America as its new agency of record for brand strategy and creative following a review that kicked off earlier this year.
Havas' newly created "Well Village" will pull from across the agency's network in North America to work with Rite Aid on a range of marketing services. The team will be based in the agency's New York office and tap into the rest of the agency's North America offerings—including its relationships with Vivendi or Universal Music Group should this makes sense, says Paul Marobella, Havas Creative North America CEO and chairman.
The announcement comes weeks after Rite Aid's proposed merger with Albertsons was called off. Last year, Rite Aid's proposed merger with Walgreens Boots Alliance was also called off. That potential partnership had drawn antitrust scrutiny.
In 2017, Rite Aid held 5.7 percent of market share of pharmacies and drugstores in the U.S., compared with CVS Health Corporation's 28.9 percent and Walgreens Boots Alliance Inc.'s 32.3 percent, according to a report from market research firm IbisWorld. The report said Rite Aid, which has more than 2,500 stores, attempts to differentiate from competitors with its wellness and loyalty programs. Rite Aid reported fiscal 2018 annual revenue of $21.5 billion.
The brand had begun the review regardless of any merger or acquisition, says David Abelman, Rite Aid executive vice president of marketing. The brief, he says, centered on what the drugstore chain saw as an opportunity to expand its brand and presence with an agency that has experience in retail and healthcare.
One focus for Havas will be Rite Aid's existing loyalty program, "wellness+ rewards." The agency plans to build on that program by creating new programs to bring value to rewards members and to drive new customers, Rite Aid said.
"We have, we think, one of the most developed and progressive loyalty programs in all of retail," Abelman says. He says the marketer has used data to drive store format and change its offerings, such as the chain's "better-for-you versions"—like baked potato chips and an aluminum-free deodorant.
Havas will also work with Rite Aid on a campaign to support the marketer's immunization program, starting with the flu.
Marobella says one point of differentiation the agency saw was Rite Aid's involvement in communities and neighborhoods, and that he hopes Havas can help the marketer tell those stories. Since 2001, The Rite Aid Foundation has given more than $41.5 million to nonprofit organizations for various causes, the company said. Its "KidCents" program gives members of the loyalty program the option to round up in-store or online purchases to the nearest dollar to donate to charities focused on improving health and wellbeing of children in Rite Aid's communities.
The brand previously worked with Marc USA for more than 20 years, Abelman says.
"With the sale of nearly 2,000 stores to Walgreens and the move away from an AOR, the Rite Aid account is heading in a new direction," Marc USA's chairman Tony Bucci said in an emailed statement. "Therefore, we chose not to participate in the recent review. We have enjoyed our long relationship with the Rite Aid people and wish the company all the best."
Bucci added that the agency was proud of the work it had done with the brand for 24 years, and said "very few agency-client partnerships last this long."
According to the IbisWorld report, industry revenue, which was $270.6 billion in 2017, is expected to increase at an annualized rate of 4.6 percent to $338.9 billion by 2022, with factors for growth tied to expected increase in the elderly population, rising per capita disposable income, the expectation of operators offering additional preventative care options and clinic services, and offering a larger portfolio of high-margin biologic drugs.
Meanwhile, new players are pushing further into the healthcare space, including Amazon. This summer, Amazon announced it was acquiring online pharmacy PillPack, which offers home delivery. One expert at the time called that announcement "incredibly bad news for traditional players" like CVS and Walgreens.
Rite Aid Corp. spent an estimated $13.9 million in measured media in the U.S. in 2017, according to Kantar Media.