Chain Drug Review, April 29, 2019

36 Chain Drug Review April 29 2019 My Turn Drug chains can capitalize on location intelligence tomers are spending in store will vary depending on why they are there A long dwell time in chain drug stores could point to long wait times or customers inability to find what they need quickly Alternatively a short visit could be an indication of the store not having what customers need By having this level of detailed data chain stores can evaluate what could be leading to the dwell time in their own locations as well as understand how it compares to how customers are shopping their competitors CVS locations also saw the most repeat visitors among these three drug stores over the course of 90 days with 36 visiting at least two times and 64 visiting only once This is slightly stronger than the 66 of Walgreens customers who visited a store only once while 34 visited at least two times Rite Aid saw the fewest repeat shoppers among these three brands as only 28 of customers during this time period visited a Rite Aid two times or more Of note CVS customers were the least likely to cross shop among the other drug store brands over the 90 days studied Seventy two percent of CVS customers only visited CVS brick and mortar locations and not Walgreens or Rite Aid Only 23 of CVS customers also visited a Walgreens location Walgreens customers were also less likely to cross shop at other retailers as 68 of visitors only shopped at Walgreens brickand mortar locations Rite Aid shoppers were the most likely to cross shop as only 53 of Rite Aid visitors shopped exclusively at Rite Aid brick and mortar locations Thirty five percent of Rite Aid visitors also went to CVS and 21 also went to Walgreens during this time Understanding how your customers are interacting with key competitors has long been a critical part of the chain drug ecosystem and location intelligence makes it even easier to analyze that behavior Knowing when and where your customers are most vulnerable to shopping with competitors can help to develop campaigns and activities to drive loyalty and decrease their cross shopping behavior Location data can also serve as the starting point for a new type of loyalty program capitalizing on the details of shoppers lives beyond their interactions with your store To date loyalty programs have focused almost exclusively on a system of reward points based on dollars spent or offers based on past purchases However understanding what other services customers value opens the door to more effective loyalty programs that can vary by locale and merge with co branding shopper marketing and other partnership arrangements Merging location intelligence with customer point of sale data can quickly determine how successful current loyalty programs are in driving shoppers to stores If shoppers are visiting stores but not making a purchase retailers can tweak rewards being offered through loyalty programs and create a more personalized shopping experience For example CVS can send coupons or offers at a time when visitation is low or is high at a competitor If certain rewards are offered to customers retailers can gauge to see whether this spurred an increase in visitors during that time period If the rewards turned out to be ineffective retailers can then adjust the program to make it more effective in getting customers to stores Location intelligence can also be employed to see affinity of specific brands among drug store customers Cuebiq found that 24 of CVS customers shop at Simon Mall Properties while 18 shopped at Best Buy locations and 15 visited Starbucks locations By understanding what other stores consumers frequent retailers can look at additional opportunities for reaching them Whether it be brand partnerships promotional offerings or targeted advertisements in or near these stores drug store chains would be able to leverage this information in order to reach their audience more effectively Overall the implementation of location intelligence in drug stores can open up valuable insights into shopper behaviors and can allow them to better differentiate themselves against their competitors Antonio Tomarchio is cofounder and chief executive officer of Cuebiq Antonio Tomarchio By Antonio Tomarchio The retail pharmacy world is facing increased pressure from tech companies whether it be Amazon entering the pharmacy space or startups offering delivery of prescriptions and other drug store essentials While this is concerning traditional drug store chains may benefit from embracing technology and thinking more like a tech company when it comes to understanding consumer behavior patterns Drug store chains have an advantage when it comes to capitalizing on location intelligence an emerging and rich source of offline behavioral patterns for customers and competitors to evaluate market trends Location data provides retailers with an aggregated view of customers who frequent their business and where else they are visiting For example visitors to a location in Brooklyn N Y are likely very different from those in Boise Idaho when it comes to their needs preferences and buying intent Neighborhood demographics provide some insight but location data showcases how those demographic differences play out in day to day life While many retailers are using location data to better understand their own customer visits location intelligence can provide a wealth of competitive information and identify opportunities to draw in shoppers who are shopping with a competitor To illustrate the shopper patterns that can be found in the drug store category Cuebiq analyzed the footfall traffic among the three largest drug store chains CVS Walgreens and Rite Aid from November 26 2018 through February 24 2019 During this 90 day period CVS had an average of 230000 visitors per day Walgreens followed with an average of 160000 visitors per day and Rite Aid with an average of 45000 visitors per day CVS had the highest overall share of visitors among these three chains with 49 of visitors shopping with them during this 90 day period Walgreens had the second highest share of visitors at 43 while Rite Aid accounted for only 7 of the share of visitors among these retailers During the weekdays Walgreens and CVS had a similar share of visits However CVS had a higher overall share of visitors on Saturdays and Sundays at 57 In this highly competitive market Walgreens and Rite Aid both have an opportunity to focus on building weekend visitation and understanding why their visitation is falling off in such a way For example are their shoppers more likely to visit a location after work or during a lunch break If this is the case Walgreens and Rite Aid should consider offering specials at these locations to get shoppers to visit more often during the weekend The offer of free samples or in person health screenings would be valuable in terms of bringing in customers and could further loyalty to that brand Another key indicator of competitive opportunity that location data can highlight is the length of time a visitor is spending in the store Again looking at CVS Walgreens and Rite Aid we can see the amount of time visitors spent at each drug stores respective brick andmortar locations between November 26 and February 24 Walgreens and Rite Aid customers spent a shorter amount of time at their respective locations with 38 of Walgreens visitors and 32 of Rite Aid visitors staying 10 minutes or less on average during each store visit Comparatively only 23 of CVS customers spent an average of 10 minutes or less in a location The length of time that cus Share of Visits Source Cuebiq Walgreens CVS Rite Aid Dwell Times Source Cuebiq Walgreens CVS 45 40 35 30 25 20 15 10 5 0 0 10 minutes 10 15 minutes 15 25 minutes 25 45 minutes 45 minutes Rite Aid Chains can steal trips and market share by gaining insights from store level data