Consumers put ExtraCare in saving

WOONSOCKET, R.I. —Consumers are concerned about the economy and are looking for ways to save money, so it comes as little surprise that shoppers at CVS/pharmacy increasingly are taking advantage of the already successful ExtraCare loyalty program and are opting for more CVS store brands.

“We know more shoppers than ever before are turning to retail rewards programs to cut costs. ExtraCare cardholders earn 2% back from nearly every purchase and also receive instant Extra Bucks rewards that they can spend on almost anything in the store or online. Shoppers can even enter in their e-mail address at CVS.com and get special, instant offers delivered right to their inbox. In fact, millions of ExtraCare cardholders have already signed up for this option,” John Barron, director of relationship management at CVS/pharmacy, told Drug Store News.

But one doesn’t have to just take Barron’s word for it. The numbers say it all. In just the past year, more than 50 million ExtraCare cardholders received more than $1.8 billion in savings and rewards. It is the largest retail rewards program in the nation.

In the final quarter of 2008 alone, ExtraCare cardholders earned a total of more than $69 million in Extra Bucks. This compares with $62 million for the same period in 2007.

“In today’s economy, people are looking for different ways—big and small—to save money. One of the most efficient ways to save is to cut everyday costs that add up, because it’s easier to attain results that will have a long-lasting effect throughout the year,” Barron stated.

The retailer, with the help of ExtraCare members who serve on an advisory panel, is continuously looking for new and innovative ways to help consumers curb costs. For example, last year the retailer launched the ExtraCare Coupon Centers, which are kiosks that allow shoppers to scan their ExtraCare card at the beginning of their visit to receive coupons and special offers before they shop. Since the launch, CVS/pharmacy has introduced these kiosks in about 4,000 CVS stores.

Shoppers at CVS/pharmacy also are turning to store brands as yet another way to curb costs. During the company’s third-quarter earnings conference call with analysts in October, Tom Ryan, chairman, president and CEO, told analysts that private label had reached 15.5% of front-end sales, up 111 basis points compared with the year-ago period.

“Our private-label sales continue to grow, and that’s driven by execution, as well as the fact that consumers are more willing to try private label in this economy,” Ryan told analysts.

And many of those store-brand purchases are taking place in the OTC aisles in light of the current economy, coupled with the cough, cold and flu season.

“We have found that more consumers are purchasing CVS store brands and realizing savings of 30% or more on allergy remedies and other OTC products,” noted Barron. “CVS/pharmacy recently conducted focus groups on what consumers thought about over-the-counter store brands. Approximately 50% of the group referenced concerns about the economy and trying to find ways to save money. They saw buying store brands as an important way to help make ends meet.”