August 5, 2002, 12:00 AM

Drugstore.com thrives on repeat customers

Repeat customers represent 71% of Drugstore’s total business--1.1 million customers in the last 12 months--and their total purchases in a year have grown threefold since 1999 to $154.

Loyal customers who are steadily increasing their spending are fueling growth at Drugstore.com, Kal Raman, president and CEO, tells Internet Retailer. Repeat customers represent 71% of Drugstore’s total business--1.1 million customers in the last 12 months--up from 69% a year earlier. In addition, repeat customers’ annual spending with Drugstore.com has increased more than threefold since 1999. In 1999, repeat customers spent $50 in a year. That amount doubled in 2000, then increased by another nearly 50% last year to $147. In Q2 of this year, repeat customers had spent $154 in the previous 12 months. "One of the most important things we do is take care of customers at the site," Raman says. "If they have a problem we do all we can to solve it with a smiling face."

Sales at Drugstore.com were up 40% in the second quarter over Q2 a year ago, the company reported last month. Raman says he is optimistic about Drugstore’s continued growth as Baby Boomers, who are more web-inclined than previous generations, move into an age when health care becomes a bigger part of most people’s lives and as demand increases for vanity drugs, medications that make a person feel or look better without necessarily addressing a medical condition. "Those drugs are expensive and many outlets cannot afford to carry them in multiple stores," Raman says. "But we can afford to stock them because we have only the one place where we have to carry them."

Raman says Drugstore.com has also benefited greatly from its deal with the Rite-Aid pharmacy chain. Customers pick up at Rite-Aid stores 35% of the prescriptions they order from Drugstore.com, worth $47 million.

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