November 25, 2002, 12:00 AM

Food & Drug: Brand and infrastructure go hand-in-hand

(Page 2 of 4)

Date
November 1999
Unique Visitors
155,000
Design By
N/A
Site Search
N/A
CRM
N/A
Affiliate Management
N/A
Fulfillment
N/A
Order Management
N/A
Returns Liquidation
N/A
Web Analytics
N/A
Payment Processor
CyberSource Corp.
Content Management
N/A
E-mail Management
N/A

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Drugstore.com
Going up against the chains

Drugstore.com has proven it’s a survivor. With a name that says it all and a multi-channel strategy from the get-go-Drugstore customers can pick up prescriptions at Rite-Aid stores-Drugstore defines what it means to survive on the web. Now it’s showing what it takes to thrive. And that means becoming part of customers’ regular shopping routine. “Drugstore is the clear victor among online drugstores; its main competitors now are CVS, Walgreen’s, Eckerd’s-the big drugstore chains,” says Duif Calvin, San Francisco-based retail analyst.

With competition like that, Drugstore is beefing up its product offerings. Just as a consumer can buy anything in a Walgreen’s or CVS store, Drugstore wants to become a frequent destination. So it’s adding magazines subscriptions in a deal with SynapseConnect Inc. and new boutiques, including sexual aids and pet supplies. It also mimics chains in sending out a weekly flier-albeit via e-mail-and it’s starting a loyalty program. It’s also offering services that drugstores don’t and probably wouldn’t offer: travel. On top of all that, it’s closing in on profitability. “We’ll be profitable in 2003 and there’s nothing more exciting than that in a company’s history,” says Kal Raman, president and CEO.

While most of the additions to the product assortment seem logical extensions, the travel component is decidedly odd. Yet it reflects one reason Drugstore has been successful: It listens to customers. “We would never have thought of it ourselves,” Raman says. “But our customers told us they liked the affordable luxuries they could buy from us and wanted to know if we could do the same for travel.” Drugstore will use travel aggregator WebLoyalty to offer hotel, airline and travel package discounts. If the offerings don’t fly, Drugstore can end the relationship with no risk, Raman says.

Similarly, Drugstore expanded into pet products by paying attention to customers. “We noticed many customers’ passwords were based on pets’ names, so we asked about their pets,” Raman says. “Many told us that if we sold flea medication or pet toys they would buy them.”

Drugstore stands out not only for the variety of products-including stocking smaller brands that stores don’t carry because there is not enough demand-but also for how it presents products and eases navigation, Calvin says. “They do one of the best jobs of any online retailer of creating boutiques,” she says. “They know they have thousands of products and customers don’t have time to look at all of them.” Expect more, Raman says. “We’ll have lots of announcement in the next six months,” he says.

Drugstore.com

Date
February 1999
Unique Visitors
1.5 million/mo.*
Sales
$16 million/mo.
Design By
in-house
Site Search
in-house
CRM
in-house
Affiliate Management
LinkShare Corp.
Fulfillment
in-house on EXE Technologies software
Order Management
in-house
Returns Liquidation
in-house on EXE Technologies software
Web Analytics
in-house on Business Objects software
Payment Processor
Global Payments Inc.
Content Management
Akamai Technologies Inc.
E-mail Management
Kana Software Inc.
*As reported by comScore Networks Inc.

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Harry and David
Holding up a mirror to the catalog

Shoppers at HarryandDavid.com may have a feeling of deja vu when they arrive at the site: The Medford, Ore.-based retailer’s web site looks like the catalog. And that’s just fine with Harry and David, a unit of Bear Creek Corp. “The web site is an extension of the brand,” says Anne Ashbey, senior manager of Internet marketing. “We want the web site to mirror the experience in the store and the catalog.”

Indeed, it does. “They don’t do any special photography or copy for the web,” says Duif Calvin, San Francisco-based retail analyst. “It’s the catalog online.” But that’s good. “They understand who their customers are; they’re almost all gift-givers,” Calvin says. “And at this site, everything is about a very straight-forward gift-giving experience.”

HarryandDavid.com is a clean, direct site that is easy to navigate and that, by virtue of its resemblance to other channels, is comfortable for Harry and David customers. But the company, which specializes in fruit and gourmet foods and operates 140 stores in addition to its web site and catalog, also uses the power of the web to improve the experience. One of the most recent enhancements is the uploading of customers’ gift-recipient lists. Customers who register at the site can view their previous gift recipients-a service that Harry and David offers through the mail to catalog customers. But if there are no changes to recipients or gifts, the customer can finish her shopping with one click. Changes are easy, too; clicking on a name generates a pop-up window that displays the data. Customers make changes right there. Harry and David has applied for a patent on the gift list technology.

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