STORES Magazine - March 2008 - (Page 15)

Look out Walgreens: That’s Wal-Mart breathing down your neck. The pharmacy industry held its collective breath last year when Wal-Mart announced its $4 generic drug-pricing strategy. Would shoppers be lured to the super centers by rockbottom prescription pricing? Research suggests the answer is “yes.” BIGresearch’s January 2008 Consumer Intentions and Actions survey reveals strong gains for Wal-Mart in the Consumer Migration Index (CMI), which tracks those shoppers who have immigrated to a store (new customers within the past year) against those who have emigrated (left within the past year). Wal-Mart exhibits strong gains, with a +10.7 rating. Walgreens, still the prescription leader, experienced a modest 1.3 gain, but CVS endured a customer deficit (-3.1). Walgreens continues to be the retailer shopped most often for prescription drugs; its overall share of 16.1 percent increased from 15.5 percent in January 2007. CVS (13 percent, up slightly) and Wal-Mart (9.2 percent, up from 7.7 percent) round out the top three. Location (57.6 percent) tops the list of reasons to shop a particular store for prescriptions, followed by price (35 percent), insurance coverage (33.9 percent), phone-in availability (30.4 percent) and informative pharmacists (15.9 percent). Wal-Mart’s $4 prescription drug program appears to be successful among consumers who report a household income of less than $50,000. Walgreens continues to lead in this segment with a share of 16.6 percent, but Wal-Mart (12.6 percent) jumped ahead of CVS (12.1 percent). Insurance Goes Retail The number of individuals looking to purchase health insurance continues to climb. Blue Cross and Blue Shield of Florida is capitalizing on the trend by opening retail stores to sell health insurance and other coverage directly to the consumer. The first Florida Blue store opened about a year ago in Jacksonville; a second unit opened last month in Pembroke Pines. BCBSF executives consider these stores central to the carrier’s “retail transformation,” particularly as the insurance industry becomes increasingly customer-centric. The goal is to enable customers to select, purchase and enroll in a new policy on the spot, replicating a retail experience. "There is a segment of the customer base that wants that face-to-face interaction when they are purchasing a service or a policy," says Tricia Engel, director of retail store development at BCBSF. "We want to provide those customers with choice in how they deal with us." One of the things Engel and her team were surprised to learn based on WWW.STORES.ORG their experience in Jacksonvillle is that interest in purchasing health insurance is widespread. Originally, they expected the largest share of interest to come from seniors, but “we've had people from all demographics come in.” Operating on a virtual private network with encryption processes, Florida Blue representatives can fill out the application with customers in the store and send it back to BCBSF headquarters electronically for immediate processing. Can Pricing Affect Shareholder Returns? Retailers have always recognized the importance of pricing as a competitive advantage, but it’s been a struggle when it comes to pricing as a key strategic imperative at the C-level. Part of the problem is that there has been little quantitative evidence relating pricing practices to enhanced shareholder value — until now. Deloitte Consulting recently commissioned research that analyzed the stock prices of 14 retailers before and after they announced and/or implemented new technologybased pricing initiatives that utilized advanced analytics. The research documents the tangible impact of implementing a comprehensive “closed loop” pricing strategy anchored in advanced analytics. One of the major findings of the research is that, by takSTORES / MARCH 2008 15 http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - March 2008

STORES Magazine - March 2008
Executive Editor's Page
President's Page
Sam’s Club Gets Tough on RFID Stragglers
Athletes for Hire
What Shoppers Think
Goodwill Hunting
10 Things You May Have Missed
Numbers Worth Counting
Full Price/Markdown
Retail People
Luxury’s Shrinking Purse
Workplace Law
First Look
Green Retailing
Cosmetic Sales
Inventory Tracking
Loeb Retail Letter
ARTS Update
Point of View
NRF News
Retail Industry Calendar
Last Laugh

STORES Magazine - March 2008