The Drug Store Shopper - US - February 2015 - Retailer ... › 2015 › 11 › the-dru… ·...

The Drug Store Shopper - US - February 2015This report is supplied in accordance with Mintel's terms and conditions. © Mintel Group Ltd.

The following are snapshots of leading drug store chains, highlighted marketing strategies, and recent innovations. This is not a comprehensive list of all drug stores, but rather a sampling ofthe major drug store chains. Topline summaries are also provided for the major mass merchandisers who have pharmacies and retail health clinics.

Drug storesMintel defines a drug store as a retail store where a primary component of the store is a pharmacy, selling prescription medicine and staffed with a pharmacist. Other categories commonlyfound at drug stores include OTC medicine, beauty and personal care, household needs, and a limited selection of food. Many also have retail health clinics. Key players include CVS,Walgreens, Rite Aid, Osco, Sav-On, Duane Reade, and a variety of local drug stores.

Quick Facts

Percentage of consumers who shopped at CVS in the last year: 42% (in-store or online)

Percentage of consumers who shopped at CVS in the last month: 36%

Percentage of consumers who filled prescriptions at CVS pharmacy: 33% (in-store or online)

Percentage of consumers who visited CVS MinuteClinic: 9%

Percentage of CVS in-store shoppers located in urban vs. suburban vs. rural areas: 38%; 44%; 32%

Note: Past month shopping from Experian Marketing Services, Summer 2014 Simmons NHCS Adult Study 12-Month, August 2013-September 2014. Past year shopping from LightspeedGMI/Mintel, November 12-21, 2014

Company overview

CVS Health (formerly CVS Caremark Corporation) is the second largest drug store in the US, following Walgreens. CVS Health operates over 7,700 CVS Pharmacy and Longs Drugsstores in 42 states; a pharmacy benefit manager, mail order and specialty pharmacies, a retail-based health clinic subsidiary, MinuteClinic; and an online pharmacy, CVS.com. CVS Health,headquartered in Woonsocket, Rhode Island , began operating in 1963, and has grown through a series of acquisitions including Long Drugs in 2008, 19 Medicine Chest PharmacyLocations in 2012, and Coram Infusion, which was purchased from Apira in December 2013. Its most recent acquisition was in July 2014 when it announced its agreement to acquireMiami-based Navarro Discount Pharmacy, the largest US Hispanic-owned drugstore chain.

As of 2014, it ranked 35th in Fortune’s Global 500 list of the world's largest companies, and 12th in the US-only Fortune 500 .

CVS Health has four strategic business units:

CVS/pharmacy generates over 68% of its revenue from the pharmacy business. Its ExtraCare program has over 70 million cardholders, making it the largest retail loyalty program inthe country.

CVS/minuteclinic operates inside CVS/pharmacy locations and is the largest walk-in medical clinic in the US, with over 900 locations in 29 states as of mid-2014.

CVS/caremark is one of the leading pharmacy benefit management (PBM) companies in the US, providing comprehensive prescription benefit management services to over 2,000health plans, including corporations, managed care organizations, and insurance companies. As of mid-2014, there were more than 65 million plan members.

CVS/specialty is the specialty pharmacy division that provides specialty pharmacy services for patients who have rare or complex conditions.

In September 2014, CVS announced that it will no longer sell tobacco at any of its locations. The company also changed its corporate name to CVS Health to better reflect its commitment tobroader health care although all retail stores will continue to be called "CVS/Pharmacy."

CVS sells prescription drugs and a wide assortment of general merchandise, including OTC drugs, beauty products and cosmetics, film and photo finishing services, seasonal merchandise,greeting cards, and convenience foods through their CVS Pharmacy and Longs Drugs retail stores and online through CVS.com.

Marketing strategies

CVS claims to be committed to empowering its customers on their path to better health and has a desire to change the future health of Americans. It is very focused on providing personalizedservices to its customers which should resonate with those most interested in ways to manage their health (see Ways of Managing Health). CVS’ name change and elimination of tobaccoproducts is a bold move that generated a lot of press and social buzz in the company’s favor. In a December 2014 investor presentation, CVS unveiled five key themes that provide focus forthe company to fuel future growth:

Better health made easy – This is about becoming a destination for health and healthier choices; upcoming focus will be on providing healthier food choices.

Elevate beauty – plans to enhance the beauty shopping experience including new and exclusive brand launches and bring its health expertise to beauty via more natural and healthyproducts.

Customer-driven personalization – indicates a goal to grow personalized offers through channels such as email and direct mail from 20% to 80% over the next five or so years (seebelow for some examples).

MyCVS Store – focus on capturing and retaining Hispanic customers; poised to do so with Navarro acquisition.

Digital innovation – about creating an integrated digital strategy that enhances online and mobile shopping options and connects the front store, pharmacy and tools which may includemore offers on the go and more personalized health management tools.

Some recent initiatives stemming from the digital strategy include an iPad app that is designed as a three-dimensional rendering of the store for easier navigation. It contains a voice-activatedprescription management tool and an ExtraCare section that lets shoppers browse available coupons and rewards. The new Family Vitamin Center on the site is a health hub on CVS.comdesigned to help alleviate consumers’ confusion about vitamins. It can provide personalized supplement recommendations based on customers’ wellness goals or health conditions.

The Drug Store Shopper - US - February 2015 - Retailer Overview http://academic.mintel.com.www2.lib.ku.edu/sinatra/oxygen/prin...

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Besides working through a rebranding and trying to make up for lost sales as a result of the tobacco elimination, the company is working on enhancing mobile and digital offerings under anintegrated digital strategy in realization that its customers are increasingly becoming more technologically and digitally savvy. Some recent advertising examples follow. The first one offers20% off regular prices and adds three ways to stack deals on top of that. The second one promotes the Beauty Club as seen on Twitter.

FIGURE 19: CVS, E-mail, January 2015

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Source: Mintel Comperemedia Media ID: 20150115-0511938

FIGURE 20: CVS, Twitter page, January 2015

Recent news and innovations

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January 2015 – Announced it will launch an exclusive collection of skincare and haircare products from Nuance Salma Hayek in the spring. The line is expected to feature a variety ofproducts including day cream, cream cleanser, shampoo, conditioner, hair mask, etc. Prices are reported to range from $7.99-24.99.

January 2015 – Launched the ScriptAbility system, which makes prescription labels more accessible to the blind and visually impaired. The system is available through CVS’s mailservice pharmacy and offers three options: ScripTalk talking prescription labels, braille labels, and large print labels.

November 2014 – Offered $10 gift cards to members of its loyalty program who spent $30 or more on select items. Loyalty members could earn up to one gift card per week, andcustomers who qualified could choose from CVS or a variety of other companies including iTunes, American Express, and Macy’s gift cards. This is an example of CVS’ desire toprovide personalized value to its customers.

October 2014 – Disabled Apple Pay (along with Rite Aid) from its retail stores claiming to be evaluating its mobile strategies.

September 2014 – Demonstrated its commitment to preventing prescription drug abuse by celebrating National Prescription Drug Take Back Day; Renewed its Medication Disposal forSafer Communities donation program which provides police departments across the US with drug collection receptacles, allowing local law enforcement to collect and dispose ofunwanted medications.

August 2014 – Launched Makeup Academy, a private label professional makeup line developed just for CVS by makeup professionals and beauty experts; Contains 145 productswithin lip products (CVS’ top impulse purchase), false eyelashes (the company’s fastest growing category), and makeup brushes.

July 2014 – launched PLATINUM, a new line of preservative-free vitamins and supplements. This line includes 44 vitamins and supplements, including certified non-GMO, gluten-free,certified organic, and vegan-friendly options. This is a part of the company’s efforts to introduce store brand product lines they can’t get at other stores.

June 2014 – partnered with Cetaphil to support Camp Wonder, a summer program for children with serious and fatal skin diseases. Cetaphil launched a limited-edition moisturizingcream that was exclusively available at CVS. The company donated a portion of its proceeds to the camp.

Quick facts

Percentage of consumers who shopped at Walgreens in the last year: 42% (in-store or online)

Percentage of consumers who shopped at Walgreens in the last month: 42%

Percentage of consumers who filled prescriptions at Walgreens pharmacy: 33% (in-store or online)

Percentage of consumers who visited Walgreens Healthcare Clinic: 7%

Percentage of Walgreens in-store shoppers located in urban vs. suburban vs. rural areas: 40%; 41%; 35%

Company overview

Walgreens Boots Alliance (formerly The Walgreen Company, or just Walgreens), is the largest US drug store chain with over 8,230 stores in all 50 states as well as over 400 HealthcareClinics at the end of 2014. The company was founded in Chicago in 1901, and is headquartered in Deerfield, Ill. In December 2014, the company agreed to purchase the remaining 55% ofSwitzerland -based Alliance Boots that it did not already own to form a global business. The two companies merged to form a new holding company Walgreens Boots Alliance Inc.Walgreens became a subsidiary of the new company, and now trades on the Nasdaq under the symbol WBA . Also in December 2014, Walgreens president and CEO Greg Wassonannounced his plans to retire after the merger.

Walgreens sells a variety of consumer goods and services, in addition to pharmacy, photo studio, and health and wellness services through its retail drugstores, Walgreens Health Servicesdivision, and Walgreens Health and Wellness division. The company operates several online stores including Walgreens.com, Beauty.com and Drugstore.com (since March 2011) andVisionDirect.com. Acquisitions like this have helped the company to expand its online exposure and focus on retail drugs, while rival CVS pursues the pharmacy benefit managementbusiness.

Walgreens has rapidly grown its US footprint via store expansion and through acquisitions. Originally, Walgreens stores were connected to local groceries that would share staff. As of 2009,its strategy is to be freestanding, and ideally on the corner of the busiest intersections. Even its marketing tagline focuses on this with “On the corner of happy and healthy.” Some stores offerdrive-thru pharmacies. Other recent acquisitions include Duane Reade in 2010, a drug store chain centralized in the New York City area, and Kerr Drug in 2013. Walgreens also formed along-term strategic partnership with AmerisourceBergen, a Pennsylvania based drug wholesale company.

Walgreens continues to sell tobacco products and reasons this by claiming that by selling them, it is more readily able to provide customers advice and products to stop smoking. It remainsto be seen if CVS’ move to eliminate tobacco will impact Walgreens’ point of view on this topic.

Marketing Strategies

The freshly created Walgreens Boots Alliance is in flux, undoubtedly developing its strategies and plans for the future given the merger. It has, though, set a vision to “be the first choice forpharmacy, well-being, and beauty – caring for people and communities around the world.” At Walgreens’ annual shareholder’s meeting in January 2014, it discussed seeing opportunity inbeauty and fresh food categories and recognized the growth and impact of digital commerce. It also reviewed three strategic growth drivers:

Creating a “Well Experience” – an initiative that includes enhancing physical stores, ensuring the front-line service offered by employees is superior and consistent, and offering theright products and solutions in all US communities. Well Experience concepts such as store employees welcoming each customer to Walgreens and saying “Be Well” as they check outare currently executed in 600 stores. The initiative kicked off in 2014 with the rollout of its Balance Rewards loyalty program that today has over 74 million members.

Advancing community pharmacy – This aims to leverage its pharmacists and nurse practitioners to a greater degree and providing a pharmacy that provides innovative, high-quality,affordable health and well-being services. Walgreens is focusing on serving customers with asthma, high blood pressure, high cholesterol and diabetes. It began offering diagnosis andtreatment for these disease states last year at its Healthcare Clinics in addition to acute care, prevention and wellness, and monitoring and disease management services.

Establishing an efficient global platform – discusses how the company is elevating its growth strategies in the US and beyond to become a global market health care solutions provider.

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As far as current tactical initiatives, a review of its website found the home page featuring five key areas: ‘prescription refills’ that includes information about “pharmacy chats” whereconsumers can talk with a pharmacy professional any time of day; health information and services; contact lenses, ‘shop products,’ and a photo area (likely the department currently beingfeatured). Users can also easily check their balance rewards, looks for savings and deals and get weekly ads and coupons. The site also features eight ways to save including clearance,paperless coupons, weekly ads, a sale section, and information on private label brands such as Nice!. The company introduced 2,000 new private label brand items in 2014. Walgreens alsooffers regular promotions and monthly sweepstakes that provide customers with, for example, a chance to win $3,000 for providing feedback on their store experiences.

Examples of some of Walgreens’ weekly coupons and offers can be found below. The first one promotes vitamins and shows how loyalty card members can get extra points with theirpurchases of such items. The second one takes a localized approach and attempts to drive urgency to the pharmacy or clinic for a flu shot with news that an outbreak has been found inGeorgia. It also promotes its mobile app.

FIGURE 21: Walgreens, E-mail, January 2015

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FIGURE 22: Walgreens, E-mail, January 2015

January 2015 – Launched a new campaign dubbed “Well Beyond HIV,” which highlights people aging beyond their HIV diagnosis. It featured a traveling art exhibit, curated inpartnership with The Graving of AIDS, an independent documentary project, and was kicked off in Miami, Fla.

December 2014 – Announced plans to carry (along with Duane Reade) Skin & Co’s. new Umbrian Apothecary line featuring four collections of bath and body products priced from$16-26.

October 2014 – Began supporting Apple Pay, a mobile payment system stores credit card and debit card information, allowing users to swipe their phones instead of their cards atsupported retailers.

August 2014 – Hosted a Wet n Wild cause-marketing campaign called #MoreKisses benefitting the American Cancer Society; hosted “Kissing the war goodbye” event at the flagshiplocation in Hollywood, Calif. Invited public to recreate the iconic photo featuring a sailor and nurse kissing in Times Square to celebrate the end of World War II.

July 2014 – Launched a new healthy choices initiative for its Balance Rewards program, which rewards members with extra points for adopting healthy habits; rewards members canearn points by participating in various health-related programs such as exercise and smoking cessation; pharmacists and online pharmacy chat agents will be trained on providingwellness coaching to consumers.

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July 2014 – Partnered with the American Diabetes Association (ADA) to help them with the Stop Diabetes movement; donated $1 to the ADA for every person who joined its BalanceRewards up to $50,000 through end of 2014.

June 2014 – Extended partnership with Vitamin Angels that provides at-risk children and mothers with essential vitamins and minerals; Companies will donate 1% of retail sales fromvitamin purchases of participating brands through 2017.

February 2014 – Offered free blood-pressure testing in honor of American Heart Month as a way of increasing awareness about hypertension, heart disease, and stroke.

January 2014 – Partnered with Procter & Gamble to host a Twitter party targeting beauty mavens ahead of awards season; promotion offered a “fab bag” of $250 worth of beauty andwellness products. Supports company’s vision of becoming the first choice for pharmacy, well-being and beauty as it offered customers products to help them achieve the latest trendsand styles.

Quick Facts

Percentage of consumers who shopped at Duane Reade in the last year: 4% (in-store or online)

Percentage of consumers who filled prescriptions at Duane Reade’s pharmacy: 4% (in-store or online)

Percentage of consumers who visited Duane Reade Dr. Walk-in Medical Care clinic: 3%

Company Overview

Duane Reade Inc., a subsidiary of Walgreens Boots Alliance, is a drug store chain primarily centralized in and around New York City, where it is also headquartered. The company beganoperating in 1960 with its first store located around the streets that gave it its name and now has over 250 stores. It was purchased by Walgreens Corporation in 2010 for about $1.1 billion,and today the two brands share many of the same strategies. For example, the loyalty programs are both dubbed “Balance Rewards” and offer the same benefits at both stores, while thenames of departments in-store are consistent such as “Look” for beauty items and “upmarket” for food items, ie “upmarket: sushi.” Many of the drug stores’ locations also offer the Dr. Walk-InMedical Care Clinic that allows consumers to walk in to any location to receive professional health care.

In 2010, the company took to making store improvements based on feedback from a consumer survey. Enhancements include simpler store layouts, wider aisles, improved lighting and bettercustomer service. It also added more weekend and holiday hours at its pharmacies to make it easier for consumers to talk to a pharmacist, and now offers a pharmacy translation service sopatients and pharmacists can converse in the same language at no charge to the consumer. Included in these renovation efforts was a facelift for its flagship store at 40 Wall Street in July2011, which even offers hair and nail salons. As they should, the updated store makeover looks were transferred into circulars and other marketing materials to ensure brand consistency.

A review of its site shows that Walgreens is always associated with the brand, eg “Duane Reade by Walgreens.” Once again similar to Walgreens, the site shows eight different content areasincluding pharmacy; balance rewards; weekly circular; store locator; “new” at Duane Reade predominantly featuring food and beauty items, but also items handy for city living like tote bagsand travel locks; health information; Dr.Walk-In Medical Care; and the photo department. In several cases, users will be redirected to Walgreens’ landing page. Duane Reade also offers aPrescription Savings Club offering discounts on over 8,000 brands for a fee of $10 for individuals and $35 for a family.

Duane Reade is a frontrunner in the social media space (see Social Media). Last year, the brand surpassed one million Twitter followers, and has since doubled its following. Its blogger teamdubbed “Duane Reade VIPs” includes a group of 15 advocates who create authentic consumer-generated media via their own social platforms, including blogs, vlogs and Google+. It alsoruns frequent promotions on social channels using a tone and voice that is very NY-centric, witty, and funny and is consistent across all owned social platforms. The company applies amobile-first filter across social platforms when considering social tactics and strategies and has found success by being able to be timely, relevant and nimble with content updates.

Walgreens also commonly tests digital programs in Duane Reade to get an assessment of response from a large metropolitan area. Recent tests in the second half of 2014 included weather-triggered coupons and iBeacons in 10 stores.

Duane Reade does not offer e-commerce, so mobile plays a big role in its marketing strategies. The company also claims to maintain an aggressive public relations strategy focused ongaining news coverage.

The following email ads are examples of how the company stays timely with relevant events, and offers events and experiences to drive foot traffic.

FIGURE 23: Duane Reade, E-mail, January 2014

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FIGURE 24: Duane Reade, E-mail, February, 2014

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March 2014 – Teamed with Poncho, a personalized weather forecast service, to test a weather-based promotion in the New York area; Users received Duane Reade coupons with theirregular weather updates, good for products to help users battle the weather and their allergies.

October – November 2013 – Ran #DRparty legs promotion, a photo contest asked entrants to showcase the legwear product of their choice in their holiday party attire; Generatedmore than 5,000 pieces of content generated via blogs, Facebook and Twitter with more than 200,000 total blog page views, and 150 million impressions on Twitter. Prizes includediPads, iPhones, and spa trip giveaways.

October 2013 – Partnered with Just for Men and Movember, a men’s health charity; Movember CEO Adam Garone was featured on limited edition brush-in color collection boxes thatwere sold exclusively in Duane Reade stores.

Quick Facts

Percentage of consumers who shopped at Rite Aid in the last year: 17% (in-store or online)

Percentage of consumers who shopped at Rite Aid in the last month: 16%

Percentage of consumers who filled prescriptions at Rite Aid’s pharmacy: 11% (in-store or online)

Percentage of consumers who visited NowClinic at Rite Aid: 3%

Percentage of Rite Aid in-store shoppers located in urban vs. suburban vs. rural areas: 17%; 15%; 14%

Company overview

Rite Aid is the third largest drugstore chain in the US and the largest on the East coast. Founded in 1962 as Thrif D Discount Center in Scranton, Pa., the company changed its name andwent public in 1968. Today the company operates more than 4,700 stores in the US, having grown through acquisitions of other drug store chains like Brooks and Eckerd in 2007. Similar toother drug stores, Rite Aid stores focus on health and wellness and personal care and beauty products, while also offering a limited selection of foods and beverages. A select 700 storeshave been designated as “Wellness” stores in which Rite Aid is executing a remodeling initiative as a way to emphasize personal customer relationships and health and wellness. The“Genuine Well Being” format is being rolled out and will include in-store technology like navigation tools.

Rite Aid’s mission is to improve the health and wellness of communities through engaging experiences that provide its customers with the best products, services and advice to meet theirunique needs. It also focuses on personalization in branding efforts like Walgreens does – Rite Aid’s tagline used in marketing materials is “With us, it’s personal.” The company has prioritizedsuch services like immunizations to help drive sales. Rite Aid’s free customer rewards program launched in 2010 is called wellness+ and has 25 million members. The loyalty programprovides members with health and wellness benefits, as well as discounts and special offers such as 10% off Rite Aid brand products. The wellness+ platform includes five key programs:

wellness65+ – for members 65 and over; benefits include 20% off on the first Wednesday of every month, a free pharmacist consultation, etc.

wellness+ for diabetes – provides access to diabetes specialists and e-newsletters containing savings

Rewards for Relief – offers coupons and discounts for selected products

KidCents – In partnership with the Rite Aid Foundation, customers can round up purchases at the store, giving their change to community health and well-being programs for kids

wellness+ articles – rewards members gain access to exclusive articles with content about how to better manage health and well-being, eg preventing seasonal allergies

+UP Rewards can be used to save even more. Customers buy featured +UP Rewards products that can be found in circulars and online, and in turn receive discounts on those items byusing their wellness+ card. This is a great way to get consumers to look at deals and is a prime example of “making a deal” as discussed in Trend Applications.

The website has a section called “Deals” that offers seven different methods for obtaining value. To allow consumers to try new beauty products for example, Rite Aid provides a money backguarantee on any opened or used beauty item bought in-store or online. Consumers can also get savings by watching ad videos from featured brands/products.

The company kicked off its “Road to Wellness” strategy in fiscal 2014 (May 2013) that focuses on adding more wellness stores, enhancing its wellness+ loyalty program, and evangelizing thedigital space.

The following example is an acquisition-oriented direct mail piece showing how Rite Aid uses its loyalty program and deeper discounting as hooks to bring back customers.

FIGURE 25: Rite Aid, Direct mail, July 2014

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October 2014 – Disabled Apple Pay from retail stores.

March 2014 – Partnered with L’eggs Sheer Energy legwear that relaunched its famous egg packaging for a limited time via a “Fabulous after 40” campaign to celebrate its 40th

anniversary; Eggs available nationwide at Rite Aid in addition to Walgreens and Walmart.

January 2014 – Partnered with LifeScan to launch OneTouch VerioSync Meter, a product that uses Bluetooth technology to send blood sugar test results to mobile devices through theOneTouch Reveal mobile app; information can be shared with healthcare professionals, caregivers, and others via text or email; Price for the meter is $19.99, which is also availablealso at Walgreens and Target.

February 2014 – Entered into five-year distribution agreement with McKesson, a leading supply chain management and pharmaceutical sourcing company; McKesson will assumeresponsibility for the sourcing and distribution of generic pharmaceuticals for Rite Aid; benefits from McKesson’s daily direct-to-store delivery service model for brand and genericpharmaceutical products.

Quick Facts

Percentage of consumers who shopped at Drugstore.com in the last year: 6%

Percentage of consumers who filled prescriptions at Drugstore.com pharmacy: 2%

Percentage of Drugstore.com online shoppers located in urban vs. suburban vs. rural areas: 8%; 7%; 3%

Source: Lightspeed GMI/Mintel

Company overview

Launched in 1999, Drugstore.com is an online only health, beauty, vision and pharmacy discount retailer that was purchased by Walgreens in 2011 for $409 million. Beauty.com is its partnersite offering more prestige brands and is housed alongside Drugstore.com on the same website; however, Drugstore.com has a separate Beauty section as well among its more than 75,000total products. The company is headquartered in Bellevue, Wash and has a customer service center there, as well as in Nova Scotia. It contains a flexible spending account (FSA) storecontaining items that are likely to be eligible for purchase using a medical FSA, and by extension a health reimbursement account or health savings account as well.

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Drugstore.com heavily promotes savings. The site is filled with offers and deals while remaining fairly easy to navigate. One of the highlights for deal-seekers is a whole section for sales andcoupons that features savings of up to 60% off regular prices. On top of discounts on products, drugstore.com also eliminates shipping costs on orders of at least $35. The company usesparent Walgreens to fill prescriptions.

The retailer offers “drugstore.com dollars” offering customers a 5% credit with every eligible purchase that can be redeemed at beauty.com. It will remind customers that they have credit touse before it expires.

Drugstore.com remains active on social media platforms like Facebook and Pinterest among others.

FIGURE 26: Drugstore.com, Landing page, January 2015

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FIGURE 27: Drugstore.com, Email ads, July and December 2014

Source: Mintel Comperemedia Media IDs: 20141226-0511231 and 201150105-051911

Mass MerchandisersMass merchandisers such as Target and Walmart offer a wide range of product categories like drug stores. These companies also sell OTC medications, and have pharmacies and retailhealth clinics. Many consumers like to shop at these stores because they offer the convenience of one-stop shopping, and provide affordable prices, sometimes more favorable than thoseoffered at drug stores. For these reasons, they are increasing the competition that traditional drug stores are facing causing them to evolve into broader health and wellness areas, and forcingthem to become obsessed about providing offers and deals.

Quick facts

Percentage of consumers who shopped at Target for drug store needs in the last year: 29% (in-store or online)

Percentage of consumers who filled prescriptions at Target’s pharmacy: 9% (in-store or online)

Percentage of consumers who visited Target Clinic: 5%

Percentage of Target in-store shoppers located in urban vs. suburban vs. rural areas: 27%; 30%; 17%

Source: Lightspeed GMI/Mintel

Company overview

Target, headquartered in Minneapolis, Minn., is the second largest mass merchandiser in the US behind Walmart with approximately 1,800 US locations including more than 250 SuperTargetstores. It also opened a CityTarget format in 2012 in Chicago, Seattle, and Los Angeles. Among prescriptions and other major departments like groceries and clothing, it stocks up onapartment essentials such as furniture, linens, and kitchen utensils. It opened a small-format version of larger Target stores called TargetExpress (which includes a pharmacy) in Minneapolisin 2014, and plans to expand this format into San Francisco and St. Paul in 2015. Target sells items across a range of categories such as household, health care, beauty and personal careproducts, clothing, footwear and accessories. The company claims the median age of its shoppers is 41, making it the youngest of all major discount retailers it competes with. In addition,76% of Target’s customers are females, making it important to maintain a beauty and personal care supply given that these are among the top drug store items purchased by young adultfemales, Hispanics, and even Boomers. Mass merchandisers like Target represent the biggest threat to drug stores in the beauty products category according to Mintel’s Beauty Retailing –US, December 2014 report.

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