November 30, 2005, 12:00 AM

Food/Drug/BeautyFood, drug and cosmetics retailers leverage the online option to grow sales

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At the digital pharmacy counter, customers can order new prescriptions for mail order or pick up in a store, schedule refill reminders, check out a prescription price list and read health-related questions and answers on topics written by actual pharmacists. was also one of the first online drugstores to move into digital photo services, which gives customers the ability to send digital pictures to and pick up their prints the next day at a convenient location. earlier this year had to fix a security breach that let unauthorized users with e-mail access view the purchasing histories of customers using the chain’s ExtraCare loyalty card, according to several published reports. Specifically, unauthorized users could access certain purchasing information pertaining to a customer’s flexible spending account if the wrong party typed in the user’s account information, ZIP code and part of the last name. CVS says it moved quickly and fixed the problem with additional security safeguards. The fact that CVS did respond quickly to a security problem, coupled with the site’s well designed product pages, site search and personalization tools, says is serious about privacy and customer service.

“The site is well balanced with a good blend of design, content and tools that enables shoppers to feel comfortable shopping by multiple channels,” says Barbara Zaccone, president of multimedia design communications firm Barbara Zaccone Associates. “ does a good job of personalizing the shopping experience.”
The need for speed


Take an online personal money management service, switch the focus of all those applications to grocery shopping, and you might have something that looks a lot like “It’s like Quicken for managing this other part of your life,” says Tom Parkinson, Peapod’s senior vice president and chief technology officer. “It’s intense usage. People hammer away at placing their order. And if the site’s not fast, customers will go away.”

Instead, customers are coming to the site in increasing numbers. Chicago-based Peapod’s sales have been growing on average 25% a year. It now supports online grocery shopping in 15 markets, some in partnership with grocery chains Stop & Shop and Giant, also owned by Peapod’s parent, Netherlands-based Royal Ahold.

In an online sector marked by the gravestones of competitors, Peapod owes its 15 years to a model and management compelling enough to attract the needed investment, and to keeping customers happy. This year, it’s shaved the site’s already-fast response time even as site traffic has increased. It’s added non-standard grocery fare such as products from Chicago restaurant group Lettuce Entertain You. “People come to Peapod to save time, but we also differentiate ourselves on what you can get at Peapod that you can’t get in a grocery store,” says Parkinson.

Peapod this year equipped its delivery trucks with GPS navigation. The window of delivery now visible when customers log onto the site will be adjusted in real time based on the truck’s progress. Peapod will soon launch real-time ETA, generating an automated call, e-mail or text message to let customers know when the truck is 10 minutes away. Besides making delivery more convenient for customers, there’s an upside for Peapod: It gains a better understanding of delivery routes and times. “If I can shave minutes off delivery times, I can put another order on the same truck for the same overhead,” Parkinson says.

“That last-mile strategy is what people have been working on,” says Neil Stern, senior partner with McMillan Doolittle-and a Peapod customer. “The better you can route the truck, the easier it is to get the trucks to people’s houses. It’s all part of making their business model more efficient, and ultimately, profitable.”
Making cosmetics fun


You might not expect to find a gift registry at an online cosmetics site. But that’s what shoppers find at as part of that company’s attempts to take a light-hearted approach to the big business of cosmetics. “We think cosmetics are all about having fun and gifts are fun to receive,” says Brett Miller, general manager.

At’s gift registry, shoppers can select items they like to receive as gifts and note special fragrances they enjoy. This registry has a lot of customer appeal. “Sephora takes the gift registry concept one step further than most by offering the top 10 gift requests if you’re not sure what you want,” says Shari Altman, president of Altman Dedicated Direct. “It also offers gift suggestions for every type of occasion imaginable including new job, baby shower and first kiss.”

Fragrances are a big part of the gift registry. Because fragrances are so highly personal, it is often difficult for the gift purchaser to find one the recipient will like without this help. “Experts told us that 75% of the women who received fragrances for Christmas last year received the wrong one, meaning they didn’t get the fragrance they most enjoy,” Miller says.

As part of its commitment to finding the right fragrance for shoppers, also has a “Fragrance Finder” that helps customers sort through the thousands of options to find the fragrance best suited for them. Customers can either describe certain fragrances that they enjoy and ask about similar ones or they can answer a serious of questions to identify a fragrance that fits their description.

And while it might seem difficult for customers to find the right cosmetics on the Internet where they can’t try samples, takes great pains to help customers find the right items. “We have beauty experts at our call centers that our online customers can call if they are confused,” Miller says. “A lot of shoppers will call and describe their skin tone and then ask how certain cosmetics will look on them.”

A recent addition at Sephora is the “Smile” category which combines teeth whitening products with lip-related cosmetics “We’ve tapped into the popular notion of having a beautiful smile,” says Miller.
Ease of use


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