Rite Aid’s digital journey takes the pandemic head on

A core element of Rite Aid’s digital strategy is the “store of the future” where you, as a Rite Aid customer, will enjoy an experience designed to improve your mind, body, and spirit. You will talk with a pharmacist, who is no longer in the backroom counting pills, but is now in the front of the store and, as a member of your community, familiar with you and your family.

As a result of the brand’s digital strategy, which they call the “RX Evolution”, you will walk into a wellness room powered by telehealth where a local nutritionist, who already knows you through your many omni-channel interactions, will advise you on a healthy diet. You will be able to check out your store purchases on your mobile device, or order items online and have them shipped to your home, or you can pick them up curbside. Or, a revamped drive-through experience will await you, with the help of a digital menu and the ability to pre-pay for your prescriptions and any over-the-counter items you need.

While standing in this store of the future, you will likely not be thinking about the spring of 2020, when Rite Aid, a $21 billion company, was center stage in the fight against a global pandemic, serving your communities while also safeguarding the health of its 50,000 associates.

Epicenter of the crisis

“As the leading retail pharmacy chain in the nation’s hotspots, we saw the crisis evolve from day one to a full-scale epidemic,” says Justin Mennen, who joined Rite Aid as CIO in January 2019. “We experienced an immediate spike in demand for hand sanitizer and disinfectants in our stores, and in customer claims to EnvisionRxOptions, our pharmacy benefits business.” (EnvionsRXOptions will soon be re-branded as Elixir.)

As a business providing essential services to consumers, Rite Aid could not send all store associates home. The company needed its workforce to stay healthy and continue to be a strong presence in their communities. How did Rite Aid accomplish this? For Mennen, the leadership competencies that stood out at all levels of the organization were compassion and transparency.

“At Rite Aid, we are in a people business, which has never been more apparent than with COVID-19,” says Mennen. “Our associates, and their families, have the same personal concerns around health and stability as our customers. If we are transparent with our associates, and we show them compassion, they are better able to take care of their customers.”

Compassion

To show compassion to store employees, Rite Aid did a lot: It rolled out a pandemic pay policy, raised pay for non-management hourly associates, increased associate discounts, awarded hero bonuses for salaried retail associates, and sent store associates free health kits, with hand sanitizer and other high-demand items.

“We didn’t want our associates to have to go out and hunt for those items,” says Mennen. “We wanted to let them and their families know that we would do everything we could to keep them safe.”

Transparency

In terms of transparency, the executive leadership regularly communicated pandemic-related information to the entire staff. Credible, timely information on the crisis is important in any business, but especially critical in companies whose staff is providing health information to their communities. “Our customers need to sort through what they are reading on social media and hearing from their friends,” says Mennen. “Since they are used to turning to their pharmacists for advice, we have to give our store associates the most accurate and timely information that we have.” 

Mennen and the Rite Aid team are also using new digital channels to broaden that communication. “We just launched a COVID-19 app that allows associates to share heroic stories, with pictures, of how they’re impacting customers’ lives,” he says. “We are giving our associates a way to be social and let everyone in the company know what is happening on the front lines at the stores.”

At the same time as they were providing support and direction to store associates, the Rite Aid leadership team made the decision to have all of the company’s corporate employees work from home. 

“It’s quite the undertaking to shift all corporate and call center employees to remote work overnight,” says Mennen, who set up a war room to focus first on readiness, and then on operational support.

IT investments pay off

In general, Mennen has found that the overall technology modernization strategy the team had been driving as a part of Rite Aid’s RxEvolution and growth strategy is now serving the company well during the pandemic. Well before the virus hit, for example, Rite Aid had deployed Cisco WebEx and WebEx Teams for communication and collaboration. “WebEx has been a game-changer for the organization,” he says. “Today, every meeting is on video. It’s been amazing to see the organization fully embrace the technology.”

Also, a part of the team’s overall modernization effort was an initial upgrade of core ecommerce systems and digital solutions to prepare for future scalability needs. “The work our team did to prepare our e-commerce solution for growth really set us up to handle the spike in digital business,” says Mennen. “COVID-19 drove an unprecedented demand in e-commerce, 10 times our highest levels. That modernization work really paid off in helping us meet these demands.”

The silver lining

We are all still grappling with what kind of impact this pandemic is going to have on our businesses and our lives, but at the moment, Mennen sees several benefits on the horizon:

Moving away from desktops: When the IT team was planning the shift to remote work, they were challenged by how many people were still utilizing desktops. “We quickly procured and set up laptops for everybody, which will allow our workforce to be more flexible in the future,” he says.

IT works from home: Before the virus, nearly 100 percent of the IT organization at Rite Aid came into the office every day, a situation that Mennen will evolve to a more modern way of working. “As we come out of this crisis, we are going to move to a hybrid model, where we are able to support 24/7 operations with a greater percentage of our teams working from home,” he says. “Through this pandemic, our teams proved that this model works effectively for Rite Aid.”

Closer relationships to customers: “Our customers need our pharmacists more than ever,” says Mennen. “The crisis has brought our stores even closer to the local communities we serve. As a core component of our strategy, I expect that those relationships will only strengthen and far outlast COVID-19.”

A few weeks ago, Rite Aid held an analyst briefing, where the leadership team shared their strategy to deliver on the promise of the trusted pharmacist as the front line of defense in healthcare. The greatest silver lining for Rite Aid’s associates, shareholders, and customers may be that the strategy that the company was already executing was thrust into action with the pandemic. While none of us would wish for that kind of business catalyst, it is good to see companies that rise to the opportunity.