December 2, 2003, 12:00 AM

Food and Drug:Where photos and content shine

(Page 2 of 4)

A major factor that has enticed customers to shop online has been CVS’s cross-channel loyalty program. It allows customers to accumulate points for purchases both online and at the store and redeem them for discounts or free items. A new feature of the web allows CVS customers to check the status of their loyalty accounts.

Another major factor enticing customers to shop online is the ability to order prescriptions and over-the-counter items online and pick them up at a store. “This is a major convenience. Now customers don’t have to wait in the store,” Johnson says.

But in the end what has helped CVS’s Internet sales is an increasing trust by consumers to purchase health and beauty products online. “Health products in particular are considered a risky purchase; customers have to be confident that they will arrive on time,” says Johnson. But while consumers were initially hesitant to purchase such items online, their growing trust as the result of buying other products, such as books and electronics, and having them arrive on time has emboldened consumers to try these critical purchases as well. Additionally, the increasing number of women shopping online has helped this business as they are more likely to purchase health and beauty items online than men.

Among customers who are ordering items from CVS online are those who buy in bulk. “These are busy people who don’t have time to run down to the corner drugstore and buy a bottle of shampoo, so they order five bottles online so they’ll always have some when they need it. Most of CVS’s sales seem to be items that can be purchased in bulk—like diapers, vitamins and basic hair products,” Johnson says.

CVS is considered strong in online customer support and in keeping the site easy to use. “It has a good search function in that customers can sort by brand or by product categories and it does a good job of helping customers find what they need,” Johnson says. m

CVS.com
Date
1999
Unique Visitors (monthly)
505,000*
Site Design
NA
CRM
NA
Affiliate Management
NA
Fulfillment
NA
Order Management
NA
Web Analytics
NA
Payment Processor
NA
E-Mail Management
NA
*As reported by comScore Networks Inc.

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Drugstore.com
Before you run out

Surveys show that most consumers don’t enjoy shopping at the drugstore. The 4 million customers of Drugstore.com don’t have to. CEO Kal Raman says the Internet is the perfect Rx for shopping the health and beauty category. “The web is about privacy and convenience,” he says. “Some of the products we sell you wouldn’t want to buy with your neighbor looking over your shoulder. This is where the web plays a huge role with a company like Drugstore. You are able to get all the private products you need in a discreet way from an organization that’s got a high reputation and high trust value.”

In addition to more than 2 million prescriptions shipped in four years, Drugstore’s rapidly growing OTC business shows the company is onto something. It’s grown 30-40% every quarter for the past year, compared with chain drugstores whose OTC business has been largely flat or down. Given the nature of the products it sells—items that need to be replenished regularly—it’s critical for Drugstore to get its customers to return. And it does: up to 73% of sales are repeat business, even as it has acquired new customers at the rate of about 1 million per year. Drugstore.com encourages repeat customers with a three-part loyalty program for OTC products.

At the center of the program is Diamond Deals, a personalized, online circular refreshed weekly that offers registered customers discounts on a selected basket of products in which past purchase and browse behavior indicate the customer might have an interest. After launching it in late 2002, Drugstore.com has continued to fine-tune the engine that populates that basket differently for every customer, layering in new variables such as frequency of purchase and what is already in the shopper’s cart.

A second program, Drugstore Dollars, gives customers back 5% of the previous quarter’s purchases, redeemable on new purchases in the first month of every new quarter. Free shipping on orders of $49 or greater also helps accelerate sales, as does a Your List feature that stores purchase history and allows customers to re-buy with one click, and an opt-in e-mail service that reminds customers when they are about to run out of scrip or product.

Raman says Drugstore.com is out to change the way people shop in the category with features that encourage shoppers to restock not after but before they run out. “We make it easy for you to buy it, give you the best price, and make it easy for you to re-buy it so you never have to worry about it,” Raman says. m

Drugstore.com
Date
1999
Unique Visitors (monthly)
2,585,000*
Sales (annual)
$194,000,000
Site Design
in-house
CRM
in-house
Affiliate Management
LinkShare
Fulfillment
in-house
Order Management
in-house
Web Analytics
in-house
Content Management
Evant
E-Mail Management
Kana
Site Search
in-house
Search Engine Management
in-house
*As reported by comScore Networks Inc.

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Godiva.com
No aroma, no taste, but everything else

Innovation isn’t a word naturally associated with chocolate. Yet when the chocolate company is Godiva Chocolatier Inc. with a high-end product, a nationwide customer base and a large gift business, innovation on the web is a necessity. “Godiva shows a real understanding of their customers,” says Mary Brett Whitfield, senior vice president of consultants Retail Forward Inc. “They’ve thought about who’s coming to the site and how they’re using it.”

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