We Bring the Future to the Present

Future of the Drug Channel Key Players

Hannah Donoghue | hannah@retailnetgroup.com

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

New Health & Freshness Store…New Departmentalization,

Communication, Categorization and Merchandise

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Source: RNG Store Tour Database

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

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

Create a Well Experience

Flagship Locations Across US –Test & Learn Innovation Centers

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Source: RNG Store Tour Database

New Fixtures & Gondolas – Modular

Redefining Convenience for On the Go Shoppers

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Reach-In Coolers

Source: Walgreens

Continuing the Innovation - First Ever Net Zero Energy Retail Store

& New Zen Balanced Living format

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Source: Walgreens

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. 9

Comprehensive Care

Differentiated Experience

Strategic Partnerships

Source: Walgreens Investor Relations

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

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

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

Capitalizing on Integrated Model & Assets

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Pharmacy Growth Driven by Political / Policy &

Technologic STEIP Drivers

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Initiatives Aimed to Drive Personalization

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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

Digital Innovation – CVS iPad App – Endless Aisle Concept

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Changing the Way Brands Engage

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MyCVS Store Clustering – Segmented / More Targeted Offering

Source: CVS Investor Relations

2 – 3% Annual Sq. Ft Expansion plus International Growth

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Source: CVS Investor Relations; RetailNet Group database

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

Rite Aid Key Strategic Initiatives

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Growth of Wellness+

Expanding Health Care Offering

Investing in Stores

Continuing to Find Efficiencies

5 Improving the Customer Experience Source: Rite Aid

Investor Relations

Higher Scripts Consumption Combined with Aging Boomers

Population = Opportunity

AgeScript 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

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

Investing in Stores – Almost Half of CapEx Going to Remodels

Conversions to Genuine Wellbeing Stores

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Source: Rite Aid Investor Relations

Genuine Well-being – Wellness Store Renovations

1,019 Stores Completed as of Aug. 31, 2013

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Source: Rite Aid Investor Relations

Integrating Digital into Merchandising

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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