GREEN BAY, Wis. -- A primary factor differentiating ShopKo Stores Inc. from its competitors in the discount store field is its strong health care orientation.
'We definitely give emphasis to health, with prime, accessible locations in our stores,' says Mike Bettiga, senior vice president of retail health services. 'Our efforts to capture the crossover business of core customers visiting our outlets are paying off, as we strive to make certain that ShopKo customers are also customers of our pharmacy and other health care areas.'
The retailer actively cultivates cross-shopping opportunities as well as the services offered by its pharmacy department.
'We do extensive promotions via broadcast media as well as with our FSI [freestanding insert] circular program,' Bettiga notes, 'where we point up the professionalism of our pharmacy departments.'
ShopKo currently offers pharmacy services in 156 of its 158 locations. The company has installed interactive voice response telephone systems in all its pharmacies, giving its customers the ability to call ahead, 24 hours a day, to place a refill order and indicate what time they'll be arriving to pick it up.
The discounter already has drive-through windows for pharmacy service in seven of its outlets. 'They are very popular with our customers, and are something we will be adding to our new stores as we go forward,' comments Bettiga.
ShopKo uses automated counting equipment in many of its outlets, including Baker Cell systems. 'We also have a test in place of the Pharmacy 2000 system,' Bettiga adds.
While many mass market retailers continue to struggle with managed care ShopKo has found the growth of that approach to health care to be an unexpected source of diversification. Like several leading drug chains, the discounter operates its own benefits management business (PBM) subsidiary, ProVantage Inc.
What began six years ago as a mail-order prescription service has developed into a sophisticated health service company handling pharmacy and vision benefits management, and health data and clinical support services.
The wholly owned subsidiary has grown rapidly, primarily by acquiring such other companies as Bravell Inc., a prescription claims processor, which enabled it to become a full-service PBM. Soon after ProVantage added Carestream Scrip Card, another PBM, and launched its vision benefits management business.
In 1997 ProVantage acquired Mikalix Group, a software producer that delivered two important products. RationalMed incorporates 8,000 clinical rules that can be used to identify possible drug conflicts. EpiMed is a disease and drug research tool with health data on approximately 22 million people in this country and abroad.
The evolution of ProVantage from a PBM into a health data service provider stemmed from a desire to reduce health care costs, while improving the quality of care, according to Bettiga.
The rapid growth and success of ProVantage has helped distinguish ShopKo from its competitors and provided the company with a dynamic source of new business.
During the past 10 years the retailer has repositioned itself as a specialty discounter, focusing on businesses with an emphasis on health, home and family. A key component of that effort has been the chain's large pharmacy and optical departments, which occupy a considerable portion of the selling space in its stores.
SHOPKO
* HEADQUARTERS
700 Pilgrim Way
Green Bay, Wis. 54307
Phone: (920) 429-2211
Fax: (920) 429-4349
Web site:www.shopko.com
* TRADE CLASS -- Discounter
* PHARMACY RANK -- 25 in stores, 16 in sales
* Full-year results (1/30/99)
Pharmacy sales -- $435.1 million [*]
Overall sales -- $2.98 billion (+15.7%)
* Number of stores -- 305
* Number of pharmacies -- 213
* Number of states operating -- 16
(*.)CDR estimate.
