Walgreens initially launched its Prescription Savings Club in 2008. It relaunched it in 2012. The first week, 125,000 people joined. It offers discounts on 8,000 human and pet medications, diabetes supplies, nebulizers and compounded medications. Subscribers get three refills for the price of two, a 10% bonus on retail purchases and 20% off immunizations. Annual membership is $20 (individuals) and $35 (families).
MyWalgreens, a free loyalty program, includes rewards and discounts involving pharmacy and other merchandise. Consumers can even earn points for meeting fitness challenge goals. A myWalgreens-branded Mastercard also has loyalty benefits.
Kroger’s Rx Savings Club offers thousands of common medications for free or at significant discounts. Annual cost is $36 (individuals) and $72 (families). Introduced in 2018 under a partnership with GoodRx, it is part of Kroger’s broader Wellness Your Way program.
Wellness Your Way’s other health perks include dietitian services, healthy cooking demos, recipes and celebrity fitness challenges, Owens said. This, and the fact that Kroger sells food, enhances the value of all healthcare offerings. “Grocery has a unique platform to engage consumers in diet and prescription services.”
Saving money also appeals strongly to seniors, families and recovering patients. “They’re a prime audience, and they’re more value conscious,” said Attila Kecsmar, CEO and co-founder of Antavo Enterprise Loyalty Cloud.
Seniors are the biggest spenders. AgingCare.com said 39% take five-plus prescriptions daily and often have limited incomes. “If a pharmacy can save you $400 and you take home less than $2,000 monthly from Social Security, that’s a big lift in your capability to spend on other merchandise,” Janis said.
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Targeted demographic programs work best under broader initiatives. “If a program favors a certain demographic, it could alienate others,” Kecsmar said. “The general rule is to create the program for a wider audience but establish bonus perks for certain demographics.”
This is the strategy at Rite Aid. In addition to its general Rewards loyalty program, it offers Rewards 65-plus. Seniors receive additional points for purchases, educational information, and free pharmacist consultations to review medications, answer Medicare Part D questions and other services.
Apps, POS and Big Data
Pharmacy’s growing role in loyalty programs has been fueled by several factors: Apple’s 2008 launch of the App Store, POS advancements, advent of Big Data, and overall digital and e-commerce growth.
Proprietary apps let retailers collect, process and inter- and cross-connect myriad types of customer data and loyalty perks. They handle secure digital checkout options and can host a plethora of other functions. “The branded mobile app is the No. 1 way to experience loyalty,” Stephens said. “It’s extremely trackable. Easy visibility and accessibility to loyalty programs are key drivers of app use.”
Apps make loyalty programs less costly to launch, maintain and monitor, which is why they have become fairly important, Abdel-Samed said. “You can’t incentivize everyone and be profitable. Apps make loyalty programs cheaper to deliver. It’s easier to see how people engage and how long they look at offers.”
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Prior to apps’ debut, retailers often had disparate loyalty programs emphasizing different categories or shoppers. “It wasn’t cohesive,” Stephens said. “Retailers initially launched programs because competitors did. Then they’d start a new one because a category or group was underserved. Now they’re looking to relaunch or bring them together, and are looking at ties to online ordering, store credit cards, etc.”
Apps’ benefits have prompted retailers to expand loyalty functions. “Apps let you conduct more transactions specific to pharmacy like tracking prescriptions, understanding your deductible and learning how to save money shipping 90-day prescriptions,” said George van Antwerp, managing director at Deloitte.
The CVS app’s Rewards Tracker tallies rewards and savings. ExtraCare text messaging highlights deals and savings. A health dashboard lets customers access COVID-19 vaccination cards and vaccine history. The app offers myriad other capabilities.
“There’s a host of benefits to our digital-forward tools,” Driscoll said. “Taking advantage of them helps keep track of family health needs, manage and pay for prescriptions, avoid lines in stores, and save time and money from the ease of a phone.”
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Text alerts regarding automatic prescription refills help pharmacies avoid missed sales. “You want to make sure they come in monthly for their script,” Abdel-Samed said. “That’s why they pre-fill and text you repeatedly. If you miss one fill annually, that’s 10% lost revenue multiplied by many customers.”
For most retailers, enhancing loyalty programs is an ongoing priority. Elina Tunyan, consumer and retail analyst at CB Insights, said investments in loyalty/rewards tech start-ups doubled in 2021 to $1.8 billion versus 2020. “Customer acquisition costs have increased; more people are online and data privacy rules make targeting customers harder. Loyalty lets retailers personalize offers while consumers share information.”
CVS, for one, is clearly not done innovating. “We’re always listening to customers and conducting research to see how we can evolve ExtraCare Rewards in the future,” Driscoll said. “We’re investing in digital across the board to deliver innovative health solutions and create a simpler, more accessible experience.”