September 30, 2022

Campaign Spotlight: Rite Aid Offers Extra Goodies to Customers 65 and Up

Introduced in 2010 to combat competition from other pharmacy chains and big-box retailers like Walmart, wellness+ provides participants 24/7 access to a pharmacist, discounts on merchandise and other benefits. The new “wellness65+” program — which Rite Aid announced in mid-June and began promoting June 30 through an advertising campaign by MARC USA of Pittsburgh — offers the same benefits, as well as a private consultation with a pharmacist and special discounts the first Wednesday of each month. Both programs have different membership tiers; members who purchase more become eligible for greater discounts and additional wellness benefits like a gym membership. There is no charge to become a member of either program.

Rite Aid operates more than 4,600 stores in 31 states, primarily on the east and west coasts, and in the District of Columbia.

Ken Martindale, president and chief operating officer of Rite Aid, said “attracting new senior customers represents a crucial growth opportunity for Rite Aid because seniors tend to be our best pharmacy patients.” Increasing the size of its senior patient base also lets Rite Aid provide services like immunization and medication therapy management “to a segment of the population that stands to benefit the most from the positive health outcomes these services provide,” Mr. Martindale added.

Tony Bucci, chairman of MARC USA, said television advertising for wellness65+ will focus on 21 major urban markets where Rite Aid would have “the greatest opportunity to enroll new seniors.” These markets range, in the eastern United States, from Boston, Hartford and New York to Washington, Louisville and Atlanta, and include western cities like Los Angeles, Seattle, San Francisco, Sacramento and Portland, Ore. Based on the theme “How did I get here,” spots are running primarily on news programs and shows like “Wheel of Fortune” and “Jeopardy.”

One TV spot depicts a man in a bathing suit, standing by the edge of a pool, getting ready to dive in. The voice-over says, “Every now and then you gotta ask yourself, ‘How did I get here?’” The spot then shows the man having his blood pressure monitored by a Rite Aid pharmacist, and flashes the wellness65+ card, which the voiceover says helps members “feel and live your best.” As the spot concludes, the man dives into the pool and swims away; this is followed by the Rite Aid logo and tagline, “With us, it’s personal.”

“When you see the commercial, the people aren’t hip,” Mr. Bucci said. “They’re very personal, honest, sincere and caring. The idea is that people over 65 are fully enjoying life.”

Radio spots 60 seconds in length will run on news, talk, easy listening, jazz, classical and gospel radio stations in the same 21 markets where the TV ads run. In one radio spot, the announcer says, “You’ve had 60-some-odd years to prepare for this moment. Sixty-some-odd years that added up to a squishy, squashy backyard squirt gun battle. And it’s here that the question hits you. How did I get here? Is it just living in moderation? Or saving with gusto? Like getting 20 percent off your Rite Aid purchases every first Wednesday of the month with Rite Aid’s new wellness65+.” The spot concludes with the announcer calling the program “one more way Rite Aid is helping you stay here, now that you’ve actually gotten here. Here, soaking wet and slinking through your own rosebushes.”

A full-page ad running in AARP The Magazine depicts an older woman on an amusement park ride with a child. The headline says, “Here’s to suddenly remembering where laugh lines come from. Feeling and living your best. Rite Aid is committed to helping you realize it, with exclusive, new benefits for seniors.”

Last month Rite Aid also began a tour, which will run through March 2014, featuring a van decorated with wellness65+ and Rite Aid logos and photos of program participants. The van will visit more than 30 cities across the country. In each city, Rite Aid will partner with local organizations to host community wellness events for seniors and their families, like free health screenings, pharmacist consultations and seminars with local experts on subjects like fitness.

John Learish, senior vice president of marketing for Rite Aid, declined to quantify how much the company will spend to promote wellness65+. However, he said Rite Aid’s advertising expenditures in the second half of its current fiscal year would be “comparable” to what was spent in the same period in its last fiscal year, which ended March 2, 2013.

According to Kantar Media, Rite Aid spent a low of $40.1 million on advertising in calendar year 2009 and a high of $50.8 million in calendar year 2010. Its calendar year 2012 spending on all media was $13.5 million in the first quarter; $6.5 million in the second quarter; $10.3 million in the third quarter; and $17.4 million in the fourth quarter. Kantar Media also said the company spent $9.4 million on advertising in the first quarter of calendar year 2013.

According to Mr. Learish, wellness+ had more than 25 million active members — who had used their card at least twice in the previous six months–as of the end of the first quarter of Rite Aid’s current fiscal year. He also said program members generated 77 per cent of non-prescription sales and 70 percent of prescriptions filled in the first quarter of Rite Aid’s current fiscal year, both up over the same period last year; he declined to quantify these increases.

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Businesses, Too, Have Eyes for iPads and iPhones

SAN FRANCISCO — Steven P. Jobs never cared much for selling Apple products to big businesses.

The late Apple chief executive so disliked the process of catering to the needs of business, rather than those of consumers, that he called chief information officers in corporations “orifices” at a conference in 2005. “There are 500 men and women in the Fortune 500 — C.I.O.’s — that you have to go through,” Mr. Jobs said then.

A funny thing happened, though, in the last few years. Big companies started buying Apple products — a lot of them — for their employees. The iPad and iPhone have given the Apple symbol a presence in workplaces that Apple never enjoyed when it was strictly focused on selling Macintosh computers.

While corporate technology buyers say Apple does not try to hide the fact that consumers are still its top priority, they note that the company has gotten easier to work with in recent years, adding features to its devices that make them more palatable to business. It also doesn’t hurt that Apple’s new chief executive, Timothy D. Cook, is known to be far more at ease meeting with the C.I.O.’s Mr. Jobs once so memorably disparaged.

“What they’ve done in the past few years is really started thinking in a deeper way what the enterprise needs,” said Rich Adduci, chief information officer of Boston Scientific, a medical device manufacturer that has distributed about 3,000 iPads to its field sales people, and expects to buy 1,500 more by the end of the year.

Apple, which declined to comment for this article, has begun to drop hints that it sees the corporate market as a big growth opportunity. During recent earnings calls with Wall Street analysts, Apple executives have boasted about the portion of Fortune 500 companies testing or deploying iPads and iPhones — 92 percent and 93 percent, respectively, Apple said last month.

“You never heard those stats before,” said Gene Munster, an analyst at Piper Jaffray. “The reason why is they struggled for decades, and finally they have a story to tell in the enterprise.”

Among the big customers Apple has won recently is the home improvement retailer Lowe’s, which says it bought about 42,000 iPhones to be used by employees on store floors. Instead of having to find a computer, the employees can use the devices in store aisles to check inventory, pull up how-to videos and help customers estimate costs for painting, flooring and other projects.

Airlines have begun to use iPads to replace the printed aircraft flight manuals, navigation charts and other material that pilots are required to bring on board. The binders holding those manuals typically had to be popped open every few weeks by pilots so they could replace pages with updated information. With iPads, the updating occurs electronically.

All of Alaska Airlines’ more than 1,400 pilots now have iPads, and United and Continental Airlines, which have merged, started giving iPads to all 11,000 of its pilots in August.

“We’ve shown we can retrieve an electronic page faster than we can retrieve a printed manual,” said Captain Joe Burns, a United pilot and managing director of technology and flight tests for the airline.

The iPad, in some cases, is proving to be an attractive substitute for laptops in situations where portability and speedy access to information matters. Technicians for Siemens Energy, for example, routinely have to scale 300-foot towers to service wind turbines, sometimes in blistering heat in places like West Texas. Some of the technicians have been using laptops to read manuals and run through checklists when they’re doing this work, but the devices are too bulky and take too long to boot up, said Tim Holt, chief executive of Service Renewables for Siemens Energy.

Now the company is outfitting its wind service technicians with iPads, which are light, start instantly and have cameras that let workers send pictures to a technical support department if they need help troubleshooting an issue. About 350 technicians have the device already; within five years, about 5,000 should have it, Mr. Holt said.

Information technology departments, though, may find working with Apple a challenge. Historically among I.T. managers, Apple Macs were largely shunned as too expensive, and the company was viewed as not serious about making the computers blend well in corporate environments.

Mr. Holt said there was “pushback” initially from the central I.T. department of Siemens in Germany about the prospect of using iPads as part of its technology arsenal.

Also, although Apple’s secrecy about where its products are headed may help it make a big marketing splash in the consumer market, corporate I.T. departments like to know more so they can budget for big new technology investments.

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DealBook: Groupon Files to Go Public

The social buying site Groupon filed on Thursday to go public with plans to raise an estimated $750 million in a highly anticipated debut that comes amid a frenzy for new technology companies like LinkedIn and Yandex.

Groupon, a Chicago-based start-up, has enjoyed a meteoric rise in its short life. Shortly after starting in 2008, Groupon notched revenue of $94 million. Two years later, it had swelled to $713 million.

The company reported $644.7 million of revenue in the first quarter of 2011 alone, with 83 million subscribers across 43 countries, according to its filing.

As its prospects have grown, so has investor interest.

Last year, the company was worth roughly $1.4 billion, based on a fund-raising round led by D.S.T. Global. Groupon spurned a $6 billion bid from Google in December. A month later, the start-up raised nearly $1 billion from large institutional investors like Fidelity Investments and T. Rowe Price. Groupon’s value was pegged at $25 billion just a couple of months ago, based on discussions for the initial public offering.

In a letter to prospective shareholders, Groupon’s chief executive, Andrew Mason, highlighted the company’s growth opportunity but cautioned investors to temper their expectations.

“In the past, we’ve made investments in growth that turned a healthy, forecasted quarterly profit into a sizable loss,” he said. “When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences.”

Like many start-ups, Groupon is still struggling to turn a profit. Last year, the company’s loss topped $450 million, compared with $6.9 million in 2009 and $2.2 million in 2008.

It’s unclear when its fortunes will turn. The company warned, under the risk factors in its filing, that it had lost money since its inception and that it expected its operating expenses to grow for some time.

The company’s biggest expense is marketing. Groupon spent $263.2 million on online advertising, subscriber e-mails and the like, compared with just $4.5 million the year before.

“We cannot be certain that we will be able to attain or increase profitability on a quarterly or annual basis,” the filing said.

Groupon’s investors and early employees stand to reap a windfall in an I.P.O. The company’s largest shareholder, Eric P. Lefkofsky, a co-founder and board member, would be worth billions of dollars. Mr. Lefkofsky owns 64.1 million shares, or roughly 21.6 percent of the company’s Class A common stock. The venture capital firm, Accel Partners, which invested in Groupon in November 2009, owns a 5.6 percent stake. Mr. Mason, who made $180,000 for his base salary last year, controls 7.7 percent of the company.

Groupon, which will trade under the ticker “GRPN,” has hired Morgan Stanley, Credit Suisse and Goldman Sachs as lead underwriters for the offering.

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DealBook: Sealed Air to Buy Diversey Holdings in $4.3 Billion Deal

Sealed Air announced on Wednesday that it would buy Diversey Holdings, in a $4.3 billion deal that would allow the packaging company to expand into commercial cleaning and sanitation.

It is a new area for Sealed Air, well known for its Bubble Wrap brand. With the Diversey acquisition, the company will be able to offer new products like disinfectants and cleaning solutions to its current customers and new ones.

It will also enhance Sealed Air’s exposure to developing markets. Diversey, which traces its corporate roots to Johnson Wax, the predecessor of SC Johnson, has a presence in more than 60 countries, including fast-growing markets like Latin America and the Asia Pacific region. Once the deal is complete, Sealed Air expects to generate 60 percent of its revenue outside North America, with roughly 21 percent in emerging countries.

“This transaction represents a strategic growth opportunity that leverages Sealed Air’s core competencies and positions our company to further capitalize on the megatrends that drive both businesses,” William V. Hickey, chief executive of Sealed Air, said in a statement.

Under the terms of the deal, Diversey’s owners, which include members of the Johnson family and the private equity firm Clayton, Dubilier Rice, will receive $2.1 billion in cash and 31.7 million shares of Sealed Air. After the deal closes, Diversey’s investors will own about 15 percent of Sealed Air.

“We are excited about the opportunities we have to grow with Sealed Air through increased scale and expanded reach,” Edward F. Lonergan, chief executive of Diversey, said in a statement. “We share a culture of innovation and a global vision for our business.”

The deal is expected to be completed at the end of the year. Sealed Air expects the acquisition to increase earnings per share in the first full year after the deal is closed, with cost savings of $30 million in the first year.

Citigroup and Blackstone Advisory Partners served as financial advisers for Sealed Air and Simpson Thacher Bartlett acted as legal adviser. Goldman Sachs advised Diversey and Skadden, Arps, Slate, Meagher Flom acted as its legal counsel. The Johnson family worked with Lazard, while Debevoise Plimpton provided legal advice to Clayton Dubilier.

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DealBook: HSBC Drops Out of Retail Banking in Russia

Toby Melville/Reuters

MOSCOW — HSBC on Monday became the latest foreign bank to pull out of retail banking in Russia as large state-owned banks have come to dominate a business that had been expected to provide a rich growth opportunity for foreign institutions.

HSBC, Europe’s largest bank by assets, said it would close five retail branches in Moscow and St. Petersburg and focus instead on providing global lending services to industrial and corporate clients.

The manager of the bank’s Russian operations, Huseyin Ozkaya, said in a statement that a review of the market showed corporate banking offered the ‘‘strongest opportunity’’ for HSBC in Russia.

HSBC — which started its retail business just two years ago, with a grand opening on Bolshaya Nikitskaya Street in Moscow — follows Barclays of Britain and Banco Santander of Spain in either quitting or scaling back plans to open retail banks.

This is a sharp change from a few years ago, when foreign banks piled into the country and expectations for quick growth in retail banking were high.

Foreign banks attracted consumers with new services like Internet banking, linked investment accounts and online bill payments. But the business was considered particularly appealing because foreign banks were thought likely to benefit from Russians’ deep distrust of their own financial institutions, after a series of scandals and ruble devaluations wiped out savings in the 1990s.

The expected erosion of Russian state banks’ share of the retail market, however, never took place. Sberbank, a former Soviet retail bank, began offering similar services to those of foreign banks. Sberbank then bolstered its reputation after the global financial crisis by taking pains to emphasize its state-backed financial stability as Western banks teetered.

And the fact that few Russian depositors suffered in the global recession helped the banking industry over all, raising the price of entry for foreign banks, said Bob Kommers, a banking analyst at Deutsche Bank in Moscow.

Sberbank, for example, has retained its dominant position in consumer banking, now holding 47 percent of Russians’ total private savings of about 10 trillion rubles, or $350 billion, Mr. Kommers said.

‘‘The public confidence in the banking system has improved through the crisis,’’ he said. ‘‘Sberbank and VTB have simply become better banks. And that made it more difficult for foreign banks to compete.’’

Newcomers also found themselves competing with established foreign banks. Citigroup of the United States, the Italian lender UniCredit and Raiffeisen of Austria all expanded quickly over the last decade and still operate extensive branch networks in Russia.

Raiffeisen, though, has slowed expansion plans as its entire Eastern European operation was hit hard during the financial crisis. Raiffeisen had a brisk business in dollar- and euro-denominated mortgage lending in Russia that dried up quickly when the ruble was devalued in 2008.

HSBC told Russian customers they should close accounts by June 30. Credit cards will stop working on May 31, the bank said. HSBC said it would waive fees for cash withdrawals and outbound transfers to help customers move savings to other banks.

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