The document discusses the strategic initiatives and plans of several major pharmacy retailers. Walgreens aims to transform into a health and wellness destination through initiatives like expanding pharmacy services, enhancing store experience, and testing new store formats. CVS focuses on driving pharmacy growth, differentiating its front store, and leveraging its integrated assets. Rite Aid emphasizes growing its wellness offerings, expanding healthcare services, investing in store renovations, and improving the customer experience.

1. We Bring the Future to the Present
Future of the Drug Channel
Key Players
Hannah Donoghue | hannah@retailnetgroup.com

2. Walgreens Key Strategic Initiatives to Drive Growth
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Source: Walgreens Investor Relations
Create a Well Experience
Transform the Role of Community Pharmacy
Establish an Efficient Global Platform

3. New Health & Freshness Store…New Departmentalization, Communication, Categorization and Merchandise
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Source: RNG Store Tour Database

4. Walgreens Well Experience Strategy - Several Key Innovation Points In-store
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Community Pharmacy - Engagement
Exceptional Customer Service
New Checkout Experience
Enhanced Beauty
Updated Exterior Branding
Updated Décor & Wayfinding
High-touch Services
Expanded Fresh Assortment
Expanded Refrigeration & Adult Bev
Source: Walgreens

5. 2020 Re-Think – How to Transform Today’s Drugstore Into New Health & Daily Living Destination
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Expanded Pharmacy
Look Boutique
Fresh Food to Go
Juice/ Smoothie Bar
Fro-Yo Bar
Nail Bar
Health Solutions
Urban Living
Source: RNG Store Tour Database; USA Today

6. Create a Well Experience Flagship Locations Across US –Test & Learn Innovation Centers
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Source: RNG Store Tour Database

7. New Fixtures & Gondolas – Modular Redefining Convenience for On the Go Shoppers
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Reach-In Coolers
Source: Walgreens

8. Continuing the Innovation - First Ever Net Zero Energy Retail Store & New Zen Balanced Living format
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Source: Walgreens

9. Transforming Role to Community Pharmacy
•8.6 mil immunizations and vaccinations administered in FY13
•398 Take Care clinics rebranded as Healthcare Clinics
•Expanded services to include diagnosis and treatment of 4 chronic diseases
•Increased 90-day at retail penetration & announced Smart90 with Express Scripts
•Established partnership with Theranos
•Formed strategic relationship with Health Systems, ACOs and Cystic Fibrosis Services, Inc.
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Comprehensive Care
Differentiated Experience
Strategic Partnerships
Source: Walgreens Investor Relations

10. Pharmacy - Changing the Engagement Model
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Pharmacists in front of counter – encourages interaction between Pharmacist & Patients
Refill prescriptions through self-serve kiosks next to pharmacy
Source: RNG Store Tour Database; Chain Drug Review; Walgreens

11. Walgreens Key Takeaways
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Shift to community pharmacy – increased engagement, expanded services, labor model, advisor
Expect constant innovation in store experience / services to adapt to changing consumer needs
Walgreens uniquely positioned with Alliance Boots – global lead in defining well
Investing in learning – testing through flagships, category lifecycle management

12. CVS Key Strategic Initiatives to Drive Growth
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Source: CVS Investor Relations
Drive Pharmacy Growth
Differentiate the Front End
Store Network Growth

13. Capitalizing on Integrated Model & Assets
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14. Pharmacy Growth Driven by Political / Policy & Technologic STEIP Drivers
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15. Initiatives Aimed to Drive Personalization
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16. Digital Integration - Key to Personalization
•Focus of digital has been with pharmacy to date
–Creating integrated experience
•Widely used app
–Usefulness driven by pharmacy refill option
•Leverage social media
•Aggressive mobile plan
–Retail time inventory check
–Drug interaction check
–Mobile personalized circular
Current
Future
•Digital drives personalized experience
–Personalized Savings
–My Weekly Ad
•Growth of digital commerce – endless aisle
•Continue enhancing mobile capabilities

17. Digital Innovation – CVS iPad App – Endless Aisle Concept
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18. Changing the Way Brands Engage
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19. MyCVS Store Clustering – Segmented / More Targeted Offering
Source: CVS Investor Relations

20. 2 – 3% Annual Sq. Ft Expansion plus International Growth
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Source: CVS Investor Relations; RetailNet Group database

21. CVS Key Takeaways
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Expanding role of patient care changing drug retailers’ role in total health care – e.g. acquisition of Coram
Personalization - ExtraCare, My Weekly Ad
International acquisition is interesting but not critical – acquired top 10 player in Brazil, learning opportunity
Expect further segmentation and development of clustering to drive more targeted offering

22. Rite Aid Key Strategic Initiatives
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Growth of Wellness+
Expanding Health Care Offering
Investing in Stores
Continuing to Find Efficiencies
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Improving the Customer Experience
Source: Rite Aid Investor Relations

23. Higher Scripts Consumption Combined with Aging Boomers
Population = Opportunity
Age
Script per
Capita
0‐18 5.6
19‐44 7.7
45‐54 15.5
55‐64 23.5
65‐74 29.7
75‐84 34.6
85+ 34.6
Source: NACDS Goldman Sachs Global Investment Research, 2010;
RetailNet Group database

24. Wellness 65+: Offering a Hyper-Targeted Loyalty Program
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•New points on co-pays for govt. scripts
•Exclusive sale day (20% off)
Value Benefit
•Medication reviews, POC compliance, Medicare D plan reviews, blood pressure screenings and pharmacy services review
•Monthly themed health & wellness events aligned with wellness 65+ Wednesdays
Targeted Bundling of Pharmacy & Clinical Services
•Top-market mobile event tour
•Increased community outreach activation of wellness ambassadors
•Advanced CRM segment and 1:1 marketing plans
Extensive Customer Engagement
Source: Rite Aid Investor Relations

25. Investing in Stores – Almost Half of CapEx Going to Remodels Conversions to Genuine Wellbeing Stores
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Source: Rite Aid Investor Relations

26. Genuine Well-being – Wellness Store Renovations 1,019 Stores Completed as of Aug. 31, 2013
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Source: Rite Aid Investor Relations

27. Integrating Digital into Merchandising
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28. Rite Aid Key Takeaways
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Wellness / Genuine Well-being stores critical to RAD turnaround – labor changes with Wellness Ambassadors
Capital discipline will be a key strategic initiative – invest in store renewal, grow in place
Focus on strengthening relationship with customers – win with seniors
RAD behind WAG / CVS from a total health offering POV but focusing efforts on improving