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UserTesting.com urges retailers to avoid four mobile traps

BY Dan Berthiaume

Mountain View, Calif. – In a new report, “The Four Mobile Traps,” usability testing service firm UserTesting.com identifies four common mistakes retailers make when attempting to perform mobile commerce. Following is a brief summary of each “trap:”

1. Clinging to legacy. Retailers often port a successful legacy product or site to mobile, which results in an awkward hybrid that does not take advantage of mobile-only capabilities and delivers traditional online capabilities in a reduced manner. Retailers need to rethink mobile apps and sites from the ground up.

2. Creating fear. Retailers mistakenly make non-disclosure and privacy notices smaller on mobile sites to save screen face and aggressively promote viral apps, making customers think their personal data is being put at risk. Retailers must prominently display all privacy notices and not be overly aggressive in mobile promotions.

3. Creating confusion. Mobile customers are often confused by interface controls that they either cannot figure out to use or that do not have a clear purpose. Retailers must design mobile sites to be functional, rather than aesthetically pleasing, and offer clear sources of help and customer service.

4. Creating boredom. Mobile users have much shorter attention spans than PC users and do not want to browse or tinker with a site. Mobile retail sites should be extremely easy to navigate, offer quick response times and accept customer feedback for redesigns as needed.

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Rite Aid improves profits as sales slip

BY CSA STAFF

CAMP HILL, Pa. — Rite Aid reported profits for the third consecutive quarter, as it launched the largest extension to date to its loyalty card program and continued growing the latest iteration of its new store format.

The company announced Wednesday the launch of Wellness65+, an extension to the Wellness+ loyalty program aimed at elderly customers, amid sustained growth in the program overall. At the end of first quarter 2014, Wellness+ counted about 25 million active members, defined as those who use their cards at least twice over the past 26 weeks. Members accounted for 77% of front-end sales and 70% of prescriptions filled, both indicating growth over first quarter 2013, while the number of Gold and Silver members, the program’s most frequent users, increased by 4%.

Poly-chronic patients, who are those with multiple chronic conditions, are among Rite Aid’s most important customers, and most of them tend to be elderly. "We think Wellness65+ will give seniors a compelling reason to become loyal Rite Aid customers," president, chairman and CEO John Standley said in a conference call with Wall Street analysts to discuss the results.

COO Ken Martindale said that the company was working on modifying workflows and building Wellness65+ into the daily activities of employees, with pharmacists as the primary staff engaging with patients, but it was not anticipated that the program would create much extra work overall.

Enrollment in Wellness65+ includes an expanded consultation with the pharmacist, and pharmacist-patient consultations in general also have seen growth, as the company registered a 68% increase year-over-year in medication therapy management sessions. While MTM is not a significant contributor to revenue, Standley highlighted its ability to improve health and lower healthcare costs.

The company has also pushed forward with its expansion of the Wellness store format, converting 108 stores to its latest iteration, dubbed Genuine Well Being and originally showcased last year in a Lemoyne, Pa., store. Currently, 905 of the chain’s 4,615 stores have been converted to Wellness stores, with the goal of having about 1,200 converted by the end of fiscal year 2014. Front-end sales at Wellness stores are about 3.5% higher than non-Wellness stores, while pharmacy sales have not tracked as high, but are still positive.

More than 1,500 Wellness Ambassadors — specially trained staff who man the aisles with tablet computers to provide information on health and wellness products and serve as a "bridge" between the front end and the pharmacy — have been hired. Martindale said Wellness Ambassadors also were important for serving as a bridge between the store and the overall community and would play a critical role in pushing Wellness65+.

Wellness65+, Martindale said, would give customers "a pathway for building strong relationships with our associates and understanding how the Rite Aid experience goes far beyond filling prescriptions."

For the quarter, the company reported sales of $6.3 billion, compared with $6.5 billion in first quarter 2013, with the decrease resulting largely from new generic introductions. Same-store sales decreased by 2.5% for the same reason, including a 3.8% decrease in pharmacy sales and a 0.4% increase in front-end sales. Same-store prescription count decreased by 0.1%, and the company noted that it had maintained about 75% of prescriptions from last year’s Walgreens-Express Scripts dispute. Prescription sales accounted for about 67.5% sales overall. Profit for the quarter was $89.7 million, compared with a $28.1 million loss in first quarter 2013.

The company expects fiscal 2014 sales of between $24.9 billion and $25.3 billion and profit of between $22 million and $162 million, as well as same-store sales 0.75% lower or 0.75% higher than fiscal year 2013.

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Kroger remains model of consistency

BY CSA STAFF

Kroger trounced first quarter sales and profit forecasts, posting a 3.3% gain in identical store sales that drove a 92 cent a share profit.

Total sales increased 3.4% to $30 billion and the 3.3% gain in identical store sales was well ahead of analysts’ forecast of 2.8% growth. It was the company’s 38th consecutive quarter of positive identical store sales growth. Net income increased 9.6% to $481 million which translated to per share profit of 92 cents that was four cents better than the 88 cents analysts’ forecast.

"Kroger achieved strong sales and record earnings per share for the quarter, and our customers’ positive view of us continues to improve," said Dave Dillon, Kroger’s chairman and CEO. "This is because of our continued focus on the Customer 1st strategy. Our first quarter results give us the confidence to raise our guidance for the year."

Looking forward, maintained its fuel year identical store sales forecast of an increase in the range of 2.5% to 3.5%, but modestly elevated its full year profit forecast range to $2.73 to $2.80 from an earlier forecast of $2.71 to $2.79.

The company said its strong financial position allowed it to return more than $1.3 billion to shareholders through share buybacks and dividends over the last four quarters and during the first quarter, Kroger spent $146 million to buy back 4.5 million shares. It also invested $646 million in capital improvements during the quarter, up from $557 million for the same period last year. Full year capital investments are expected to range from $2.1 to $2.4 billion.

Kroger ended the quarter with 2,419 supermarkets and multi-department stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry’s, King Soopers, QFC, Ralphs and Smith’s. The company also operates 784 convenience stores, 322 jewelry stores, 1,182 supermarket fuel centers and 37 food processing plants in the U.S.

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