Shoppers unveils loyalty program

It owns the biggest chain of pharmacies in the country, so why not the biggest customer loyalty program in the nation, too?...

It owns the biggest chain of pharmacies in the country, so why not the biggest customer loyalty program in the nation, too?

That’s a question marketing executives at Shoppers Drug Mart began asking themselves a little more than three years ago, when they first started exploring the idea of introducing a customer loyalty program across their chain of owner-operated stores, which now number more than 800 across the country.

Three years and one ownership group later, the company this month unveiled its Shoppers Optimum Program, a loyalty initiative that the retail chain is boldly predicting will grow to become the biggest customer loyalty program in the country.

With the Optimum program, which is free to join, customers can earn points with nearly every purchase they make, including prescription drugs (except in Newfoundland, where prescriptions are not part of the program).

With 10 points awarded for every dollar spent in-store, program members can begin to redeem their points for discounts – which start at 20% and range up to 100% – once they’ve accumulated over 3,000 points.

What makes Optimum unique, says Neil Everett, senior vice-president of marketing and communications at Toronto-based Shoppers Drug Mart, is the flexibility it gives consumers to collect points on nearly every item Shoppers carries in-store. Many other retail-based programs carry restrictions that limit one’s ability to earn rewards, he explains.

Another benefit of the Optimum program, he says, is that reward point totals are automatically calculated at the cash register and printed on the customer’s receipt.

As befits an initiative of the scope and magnitude of the Optimum program, Shoppers is supporting the launch with what it claims is the largest integrated advertising campaign in the company’s history.

Developed by Toronto-based TBWA/Chiat/Day, Shoppers’ agency of record, the campaign makes use of television, radio, newspaper, billboard, Internet and special events.

The creative, which has been crafted into separate executions to appeal to men and women, is intended to highlight the ease with which Optimum rewards can be earned.

‘It’s simple. You collect points, you get free rewards,’ explains Chiat/Day creative director Jamie Way. ‘The idea is to make that become relevant and do it in such a way that it becomes memorable. It’s just a plastic card…but we want to bring personality to it.’

Meanwhile, the key promotional event to spur widespread enrolment in the Optimum program revolves around the deployment of two 30-foot Hummer Limousines that will drive through more than 60 cities and towns across Canada over a 50-day period.

Although the budget for the launch campaign is not being disclosed, sources say the company has already invested more than $15 million to develop the program, which includes an advanced database marketing system.

Everett says that based on projections derived from the pilot stage of the Optimum program, which has run in Halifax, Kingston, Ont. and Calgary since July, 1999, the company believes that more than five million active customers will use their Optimum card at least once a month – a level of activity he says would even eclipse that of Zellers’ trailblazing Club Z loyalty program.

‘With Shoppers, we do over 300 million transactions every year,’ he says. ‘So, we obviously have a lot of people coming through our doors every day.’

Everett says Shoppers expects to amass one million e-mail addresses by Christmas that will be used to communicate directly with Optimum program members and to offer them targeted healthcare information, product offers, and notices of special in-store events and promotions.

‘We’re also collecting [data on] everything people are buying,’ he says. ‘We believe we will have the largest consumer packaged goods database in the country.’

Everett says the Optimum program is actually an extension of Shoppers’ longstanding relationship marketing strategy, which includes its highly successful Healthwatch initiative.

In explaining the length of time it has taken to get the Optimum program off the ground, Everett says the delay was simply the result of a very methodical approach. The process included 18 months of research during which time Everett and other members of his marketing team travelled the world to observe first-hand the workings of the world’s best loyalty programs, including that of U.K. pharmacy chain Boots.

The only real setback in the process, he says, came when all of Shoppers’ strategies were put on hold for four months prior to the company’s sale last February to a consortium that includes senior management and individual store owners.

The Optimum launch comes at a time when the sector is being set upon by new competition from such non-traditional pharmacy operators as Wal-Mart and Loblaws.

‘Loyalty programs are critical these days, especially in such a competitive market,’ says retail consultant Richard Talbot, president of Unionville, Ont.-based Talbot Consultants International. ‘It’s one area where you need to lock some people in.’