August 17, 2012
Rite Aid Loading Rewards to Members’ Cards
Beginning next month, members of Rite Aid’s wellness+ rewards card will get something that customers at other chain drug stores cannot. They will automatically have special offers based on purchases, known as +UPs in Rite Aid jargon, loaded onto their cards.
Last January, Rite Aid became the first drug chain to give customers the option of loading both its coupons and those of manufacturers directly onto the wellness+ card.
"Since the beginning, wellness+ has differentiated itself from other loyalty programs because it uniquely combines health and wellness rewards with shopping discounts," said Ken Martindale, chief operating officer of Rite Aid, in a statement. "We’re committed to not only setting but raising the bar when it comes to building customer loyalty."
Rite Aid is rolling out the program after testing it in four cities over a seven-month period.
"Customers in the pilot program overwhelmingly told us that they appreciated not having to worry about keeping their receipts and bringing them back to the store to redeem their +UPs," said Mr. Martindale. "The increased redemptions and sales in the pilot markets prove that many of our customers are taking advantage of this feature and we’re excited to offer this convenience to wellness+ members across the country."
As a Wall Street Journal report points out, wellness+ is at the heart of Rite Aid’s marketing efforts. The program, which launched in 2010, has 25 million active members and card usage has increased 11 percent in the past year.
BrainTrust
Recent Discussions
Discussion Questions
Discussion Questions: How much does increased functionality in reward card programs influence shopping behavior? What is the most significant advancement in reward card programs and what will it mean for retailers’ shopper retention efforts?
Poll
This is actually a smart move by Rite Aid, especially given their third place position in the chain drug competition arena, and I think it might work if it’s well executed. Big if, I know.
I am a gold Wellness+ member. Points accumulate quickly and I get 20 percent discounts automatically, and now my +UP’s come off automatically. I used to have to split my in-store purchases into two, having the clerk ring up two orders separately, because I didn’t want to lose/misplace my UP voucher.
I stopped using CVS years ago because they would always bet that you’d lose the cutoff coupon and not redeem it. That has always been an hassle.
If you want to understand loyalty programs, go back 30 years and track the development of air mile programs. It will tell almost all one wants to know about consumer and company behavior.
The first thing it will tell is that there is no sustainable competitive advantage in loyalty programs. In this case, whatever “functionality” Rite Aid adds to their program today, ALL the competition will add tomorrow. Net, net, no change.
That doesn’t mean that retailers should not use or improve these programs. They must, from a competitive situation. But, they also must recognize that they are a cost of doing business, not an activity that will move the business forward.
Reward card programs with increased functionality will certainly influence shopping behavior as offers and discounts are more focused on consumer activity. It has been enabled on social media such as targeted ads on Facebook and LinkedIn, so why not bring the same functionality to the rewards programs? It makes sense for retailers to target the purchasing habits of the consumers based on the shopper insights they gather through these programs, as it will benefit both retailer and shopper.
It’s about time! Could the drug chains have made it more difficult for their customers to take advantage of discounts tied to their loyalty programs? The BrainTrust has, on many occasions, discussed and criticized the CVS loyalty program.
With smart phones and new technology, there is no reason for retailers to force consumers to save receipts in order to receive loyalty discounts.
I laugh when I see this type of announcement because it isn’t innovative or a breakthrough. It is simple enough for a program member to choose their offers via web, smartphone or in-store kiosk and with those offers in the profile redeem when their loyalty ID or card is presented at checkout. Good for Rite Aid to address a customer need with paperless coupons. It’s a matter of convenience and for the member it will likely influence the basket size as well as cross-shopping behavior by purchasing in categories not previously seen because a valuable coupon was present.
Several years ago I managed a program for VISA and Target — using a smart chip embedded in the card. Offers loaded onto the chip based on customer choice, automatically redeemed at checkout when the item was in the basket and the Target VISA was presented at checkout. New coupons placed into slots on the chip to influence future purchase. Brilliant. Way ahead of its time in the U.S. and unfortunately was the chip and the POS to support the technology were judged too expensive to sustain.
Give the consumer reason to show their card, give them differentiated value vs. the competition, treat them uniquely based on their worth or potential worth, and you will gain competitive advantage as well as incremental lift.
It is only logical that retailers should incorporate known shopping patterns and habits of consumers on their programs. It benefits both parties and as a consumer, I like being rewarded based on things that are valuable to me rather than a “one size fits all” reward. And the easier it is, the better!
Rite Aid gets first mover advantage and that’s about it. If program is deemed successful, others will have it shortly if not, they are out the development cost.
I definitely can influence customer shopping behavior, but you also have to win on the basics of convenience, selection, price and service.
I am quite sure that CVS has been doing the same thing via the ExtraCare program for the past 6 months to 1 year. I have received notices of coupons and ExtraCare Bucks that I can either print out and take into the store, or choose to “load to my card.”
I think the feature is a good one and applaud Rite Aid for its efforts, but do not agree that they are the first in the industry to do so.
Can someone offer opinion on how the Rite Aid approach might be different?
I like the idea, they just need to make sure the program is user friendly and truly rewards the customer. I agree with the comment about CVS’s cards. It needs to be simple and encouraging to the customer.
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This is actually a smart move by Rite Aid, especially given their third place position in the chain drug competition arena, and I think it might work if it’s well executed. Big if, I know.
I am a gold Wellness+ member. Points accumulate quickly and I get 20 percent discounts automatically, and now my +UP’s come off automatically. I used to have to split my in-store purchases into two, having the clerk ring up two orders separately, because I didn’t want to lose/misplace my UP voucher.
I stopped using CVS years ago because they would always bet that you’d lose the cutoff coupon and not redeem it. That has always been an hassle.
If you want to understand loyalty programs, go back 30 years and track the development of air mile programs. It will tell almost all one wants to know about consumer and company behavior.
The first thing it will tell is that there is no sustainable competitive advantage in loyalty programs. In this case, whatever “functionality” Rite Aid adds to their program today, ALL the competition will add tomorrow. Net, net, no change.
That doesn’t mean that retailers should not use or improve these programs. They must, from a competitive situation. But, they also must recognize that they are a cost of doing business, not an activity that will move the business forward.
Reward card programs with increased functionality will certainly influence shopping behavior as offers and discounts are more focused on consumer activity. It has been enabled on social media such as targeted ads on Facebook and LinkedIn, so why not bring the same functionality to the rewards programs? It makes sense for retailers to target the purchasing habits of the consumers based on the shopper insights they gather through these programs, as it will benefit both retailer and shopper.
It’s about time! Could the drug chains have made it more difficult for their customers to take advantage of discounts tied to their loyalty programs? The BrainTrust has, on many occasions, discussed and criticized the CVS loyalty program.
With smart phones and new technology, there is no reason for retailers to force consumers to save receipts in order to receive loyalty discounts.
I laugh when I see this type of announcement because it isn’t innovative or a breakthrough. It is simple enough for a program member to choose their offers via web, smartphone or in-store kiosk and with those offers in the profile redeem when their loyalty ID or card is presented at checkout. Good for Rite Aid to address a customer need with paperless coupons. It’s a matter of convenience and for the member it will likely influence the basket size as well as cross-shopping behavior by purchasing in categories not previously seen because a valuable coupon was present.
Several years ago I managed a program for VISA and Target — using a smart chip embedded in the card. Offers loaded onto the chip based on customer choice, automatically redeemed at checkout when the item was in the basket and the Target VISA was presented at checkout. New coupons placed into slots on the chip to influence future purchase. Brilliant. Way ahead of its time in the U.S. and unfortunately was the chip and the POS to support the technology were judged too expensive to sustain.
Give the consumer reason to show their card, give them differentiated value vs. the competition, treat them uniquely based on their worth or potential worth, and you will gain competitive advantage as well as incremental lift.
It is only logical that retailers should incorporate known shopping patterns and habits of consumers on their programs. It benefits both parties and as a consumer, I like being rewarded based on things that are valuable to me rather than a “one size fits all” reward. And the easier it is, the better!
Rite Aid gets first mover advantage and that’s about it. If program is deemed successful, others will have it shortly if not, they are out the development cost.
I definitely can influence customer shopping behavior, but you also have to win on the basics of convenience, selection, price and service.
I am quite sure that CVS has been doing the same thing via the ExtraCare program for the past 6 months to 1 year. I have received notices of coupons and ExtraCare Bucks that I can either print out and take into the store, or choose to “load to my card.”
I think the feature is a good one and applaud Rite Aid for its efforts, but do not agree that they are the first in the industry to do so.
Can someone offer opinion on how the Rite Aid approach might be different?
I like the idea, they just need to make sure the program is user friendly and truly rewards the customer. I agree with the comment about CVS’s cards. It needs to be simple and encouraging to the customer.