Newspaper Merchandising in Drugstores

The line between pharmacies and drugstores and other types of stores is blurring. Pharmacies are now often found located deep inside grocery stores, for example. And drugstores are putting convenience front and center, selling grab-and-go items like milk and bread from highly visible displays. Frequent foot-traffic is the goal. Newspapers fit into this plan nicely. A coin box outside the store brings people at least to the parking lot; but a newspaper display inside draws shoppers like a magnet, day after day. As a result, some of the nation's top newspapers and drugstores are teaming up to offer customers added value. Price discounts give shoppers a good reason to choose one drug store over others, giving partners a distinct competitive advantage among newspaper readers. Below are results of some of the most successful partnerships between drugstores and newspapers. Retailer: CVS/pharmacy Newspaper: Chicago Tribune Circulation: 693,978 daily; 1,002,398 Sunday Category: Local The ProgramThe Chicago Tribune is on sale daily and Sunday in all CVS Pharmacies in our primary market. CVS is very supportive of newspaper sales. A grand-opening package, which includes POP, discount pricing and subscription sales, is used in all new stores. The Retailer/Newspaper RelationshipCVS supports a weeklong contract-sales program in each new store. The Chicago Tribune is the only manufacturer allowed to solicit CVS customers. This year, CVS agreed to run two discount promotions, which the Chicago Tribune supported with in-store POP. The PeopleJennifer Ladalski, account executive, Chicago Tribune Jim Dapkus, district manager, CVS Pharmacy Tony Caskey, district manager, CVS Pharmacy Bill Hockman, district manager, CVS Pharmacy Mike Turner, field marketing manager, CVS Pharmacy Charlotte Dwigans, administrative assistant, CVS Pharmacy The Results for the NewspaperThe promotion began May 3 and ended June 29, 2003. The $1.59 Sunday Chicago Tribune promotion resulted in an impressive 11.2 percent increase over the base (previous eight weeks) and a 60 percent increase year-over-year (note: 10 additional stores opened in 2003). The Results for the RetailerDuring the first promotion, the CVS stores experienced an increase in traffic, and the Chicago Tribune received positive feedback from the stores. This partnership has been so successful that both partners agreed to do another promotion in December. Retailer: Walgreens Newspaper: Dayton Daily News (Dayton, Ohio) Circulation: 183,175 daily; 192,003 Sunday Category: Local The ProgramThe suggested retail price for the Sunday edition of the Dayton Daily News is $1.85. Dayton Daily News partnered with Walgreens for a traditional price-promotion, selling the Sunday newspaper for 99 cents. Walgreens accepted new newsracks, which remained in the store after the promotion. Walgreens advertised the special on its outside street marquees. The Retailer/Newspaper RelationshipDayton Daily News has partnered with Walgreens on this promotion over the past five years with phenomenal results. It has been very successful. The PeopleSteve Smith, regional manager, Walgreens Mariellen Stout, retail sales manager, Dayton Daily News The Results for the NewspaperDayton Daily News sold Sunday newspapers for 99 cents at 13 area Walgreens locations during the month of October. Sales increased 28 percent from the previous month during the first week, 57 percent the second, 94 percent the third and 85 percent the fourth week. A total of 3,719 Sunday newspapers were sold during the promotion. Sunday sales increased 81 percent from the previous year. The Results for the RetailerWalgreens experienced a huge influx of customers each Sunday during this promotion. Retailer: Walgreens Newspaper: The Hartford Courant (Hartford, Conn.) Circulation: 242,041 daily; 283,410 Sunday Category: Local The ProgramWalgreens was expanding within the market and wanted to drive traffic to its new locations as well as increase repeat business in existing locations. Faced with declines in single-copy sales, specifically Sunday, The Hartford Courant developed a promotion to support Walgreens' objectives and drive The Hartford Courant's Sunday single-copy sales. Working together, the partners developed a three-month Sunday 99-cent retail price promotion exclusive to 20 participating Walgreens locations. Walgreens agreed to maintain custom POP materials in all locations to include posters, rack cards and bag stuffers. Walgreens also enabled The Hartford Courant to secure prime/additional rack locations at Walgreens stores. In the spirit of partnership, Walgreens agreed to reduce its profit on papers sold so that The Hartford Courant could offer the discount to customers for a longer period and maintain positive profit margins throughout the promotion. The Retailer/Newspaper RelationshipThe partnership with Walgreens is a win-win. Walgreens allows The Hartford Courant to install whatever type of point-of-purchase materials the newspaper sees fit and lets it set up these materials before the start date of the promotion. The stores keep all POP in place throughout the entire promotion. Walgreens has also used outside message boards to promote the Sunday 99-cent special to help drive traffic into their locations. In conjunction with the roll-out of the 99-cent Sunday promotion, Walgreens also agreed to support the Newspaper In Education program by donating a portion of its profits for each paper sold daily and Sunday to The Hartford Courant's Newspaper In Education fund. The PeopleScott Corley, district manager, Walgreens Jerry Telson, district manager, Walgreens Susan Kerr, single-copy retail sales manager, The Hartford Courant The Results for the NewspaperThe Sunday 99-cent price promotion ran from June 1 through Aug. 31, 2003. Sales increased 115 percent year-over-year. There were 5,100 incremental copies sold. The Results for the RetailerThe Sunday 99-cent price promotion provided Walgreens' customers with valuable savings and provided The Hartford Courant valuable incremental Sunday sales. This promotion created in-store excitement and was well-supported at the store level. Retailer: Walgreens Newspaper: The Orlando Sentinel Circulation: 269,269 daily; 385,097 Sunday Category: Regional/National The ProgramThe Orlando Sentinel and Walgreens continuously partner to conduct simple discount promotions as a means of driving traffic into Walgreens and increasing single-copy sales of The Sentinel. Three times a year, The Sentinel discounts its wholesale rate to Walgreens to 35 cents daily and 99 cents Sunday; Walgreens passes the discount along to its customers. The Sentinel also produces POP for Walgreens to install in its stores and publishes inserts in US/Express, The Sentinel's TMC product. In addition to the copromotions, Walgreens donates to The Sentinel's Newspaper In Education program. Walgreens donates two cents for every paper sold in its location all year long. The Retailer/Newspaper RelationshipThe Walgreens and The Orlando Sentinel partnership was formed in 2000, when the first Special Offer 99-cent Sunday Sentinel promotion was conducted. Based on the success of this first promotion, the partners decided to incorporate the daily paper into the offer. Adding the Daily Sentinel to the mix was also successful. The Sentinel and Walgreens have been partnering three times a year for eight weeks at a time to conduct the Special Offer promotions since 2000. During each promotion, The Sentinel produces three types of POP that Walgreens installs in its stores. The Orlando Sentinel produces two types of rack signage: one that hangs from the newspaper shelf and one that slides into the top of the rack. Walgreens installs the endcap signage in multiple locations throughout the store to ensure the promotion gets great visibility in the store. The PeopleTracey Thomas, single-copy marketing coordinator, The Orlando Sentinel Lee Jones, store manager, Walgreens Dennis Swegle, district manager, Walgreens Scott Terry, district manager, Walgreens Vickie Pouk, district manager, Walgreens David Sedlak, district manager, Walgreens The Results for the NewspaperThe fall Special Offer promotion ran from Sept. 30 through Nov. 24, 2002. The daily average sales increase was 31.1 percent, with 7,366 incremental copies sold. The Sunday sales increased 32.1 percent, selling 8,214 incremental copies. After the promotion was over, the sales still increased even at the full retail rate. The daily sales increased 20.8 percent while the Sunday sales increased 33.1 percent during the winter Special Offer promotion, Jan. 27 through March 23, 2003. The daily sales increased 3.7 percent, and the Sunday sales increased 22.8 percent during the four weeks after the promotion. The summer Special Offer promotion, which ran June 2 through July 27, 2003, resulted in a daily sales increase of 23.5 percent and a Sunday sales increase of 31.6 percent. The annual donation to the NIE was over $8,300. The partnership ran another promotion during the fall of 2003. Three weeks into the promotion, daily sales increased 12.2 percent while the Sunday sales increased 21.7 percent. The Results for the RetailerClearly Walgreens knows that this promotion drives traffic to its stores since they are willing to participate with a negative profit margin. Walgreens has said that their customers look forward to and expect these "Special Offer" promotions. Walgreens reaps the residual sales increase (at full retail price) after the promotion has concluded. Walgreens also appreciates recognition in the community as a sponsor of the NIE program.

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