September 22, 2010, 9:44 AM

Drugstore.com looks to niche sites for growth

The online retailer plans to add to its six niche sites.

Lead Photo

TheNaturalStore.com is a niche site operated by Drugstore.com

Drugstore.com has sharpened its focus in the past 10 months by rolling out six microsites that serve specific consumer health needs. The e-retailer plans to fuel growth with more such specialized e-commerce sites, Tracy Wright, vice president and chief finance officer, said during a recent presentation at New York investment banking firm Kaufman Brothers’ 13th Annual Investor Conference.

For the first six months of the year, Drugstore.com recorded:

  • Sales grew 25.6% to $224.08 million from $178.40 million in the period of January through June of 2009.
  • Net loss was $5.29 million compared with net income of $1.88 million in the prior year.

The targeted microsites feature what the company calls “attractive product categories with high margins.” The rollout of more niche sites enables the web-only retailer to attract more site traffic and potential long-term customers while leveraging existing assets and infrastructure. Microsites not only help Drugstore.com, No. 46 in the Internet Retailer Top 500 Guide, offer consumers a more focused shopping experience, it allows the company to develop specialized marketing promotions and alternative shipping options, Wright told attendees.

Since August 2009, Drugstore.com has launched the following microsites:

  • SexualWellBeing.com
  • AtHisBest.com
  • TheNaturalStore.com
  • Allergysuperstore.com
  • DeluxeSalonSupply.com
  • VitaminEmporium.com

Beauty products could offer new microsite opportunities, Wright said, but did not provide other details.

Some of the recent additions are showing positive results, though she didn’t provide any specific numbers. “We believe TheNaturalStore.com and AtHisBest.com are on trajectories to grow into multi-million dollar sites,” Wright said.

Drugstore.com also plans to invest $2 million to $3 million in its main web site this year, Wright said. “It will include global navigation improvements and an enhanced browsing experience. We’re trying to step up the searching and browsing capability on our site to make products easier to find for our customers,” she said.

The company also plans additional mobile applications that would enable an easier shopping experience for consumers. Drugstore.com’s sister e-commerce site Beauty.com has a mobile app for BlackBerry devices developed by Digby. “People want to shop where they want to when they want to and how they want to,” Wright said. “We want to be everywhere they want to be.”

Additional growth plans include extending its commercial web services and over-the-counter product arrangements with companies like Medco Health Solutions Inc., a health care management business that includes health-related products, and vision products partners such as Luxottica, parent of vision services companies including LensCrafters, Pearle Vision and Target Optical.

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