drugstore.com, inc., www.drugstore.com, is a leading online provider of health, beauty, wellness, and pharmacy products and solutions. The company offers prestige beauty products at www.beauty.com, which is also accessible through the drugstore.com Web site; customized nutritional programs through wholly owned subsidiary Custom Nutrition Services, Inc. (CNS) via www.DrWeilVitaminAdvisor.com, www.zoneprofiler.com and firstname.lastname@example.org; and contact lenses and other vision products through International Vision Direct Corp. or Vision Direct, another wholly owned subsidiary, with Web sites at www.visiondirect.com, www.lensmart.com and www.lensquest.com. Customers also can request information and place orders toll free by calling 1-800-DRUGSTORE and 1-800-VISIONDIRECT. As of January 1, 2006, drugstore.com’s lifetime customer base was 7.8 million worldwide.
The drugstore.com Value Proposition
drugstore.com, inc., opened in 1999 with a clear mission: to serve the health, beauty and wellness consumer with selection, convenience, information, personal service, and a trustworthy and reliable pharmacy. Consistent focus on these objectives has allowed drugstore.com to outpace competitors in every key measure: traffic, customers, repeat rates, market basket value, and revenue. drugstore.com offers consumers:
Convenience - drugstore.com customers can shop 24 hours a day, seven days a week. Reorder reminders, shopping lists, prescription refill e-mail reminders, and order history access all facilitate repeat purchases. drugstore.com aims to ship all orders within 48 hours of receipt and delivery to the customer's doorstep within 5-7 business days.
Selection - drugstore.com offers approximately 3-4 times as many health, beauty and wellness products as those stocked in brick and mortar stores, including both the most popular and hard-to-find, unique product lines.
Valuable and relevant information - The drugstore.com site features shopping guides, product comparisons, articles and additional product content, all of which are integrated into the site architecture so that they are closely aligned with the products themselves. This content provides customers with the information they need to make the right purchase decisions more quickly and more efficiently.
Shopping experience - drugstore.com is dedicated to delivering the best shopping experience on the Web through technology leadership and innovation. The company is a leader in personalization, with the ability to recognize, greet and advise returning customers about items on their shopping lists that are on sale and to make product suggestions when appropriate. drugstore.com takes this obsession with customer service a step farther by delivering value-added personalized services. For example, customers can receive a secured e-mail reminder when it is time for a prescription refill; and through the eMedAlert™ program, customers can choose to be notified via privacy-protected e-mail alerts about products they have purchased that are being recalled.
The drugstore.com Pharmacy
The drugstore.com pharmacy is fully licensed in all 50 U.S. states and is certified by the National Association of Boards of Pharmacy's Verified Internet Pharmacy Practice Sites (VIPPS) program. drugstore.com pharmacy customers have the option of arranging to pick up their prescriptions at any one of more than 3,300 Rite Aid stores nationwide, and customers pay about 20 percent less, on average, for prescription generic and brand-name drugs than they would at brick-and-mortar pharmacies. Customers also can choose to be among the first to learn about drug safety concerns through the pharmacy’s one-of-a-kind eMedAlert program, and can also access comprehensive, easy-to-understand drug interaction information online. The Ask Your Pharmacist database provides customers with free access to information about over-the-counter medications and wellness products, as well as prescription drugs, and both pharmacists and customer care specialists are available 24 hours a day to answer questions by phone and e-mail.
drugstore.com is part of a $252 billion dollar-industry that is growing by double digits every year. In addition, health care is one of the largest segments of the U.S. economy, representing an annual expenditure of roughly $1 trillion. Health and medical information is one of the fastest growing areas of interest on the Internet.
drugstore.com has secured important partnerships with industry giants such as:
In June 1999, we entered into a 10-year strategic relationship with Rite Aid. As a result of this relationship, customers can order prescription drug refills from the drugstore.com Web site and either have the prescription mailed to them or available for pick up at any one of more than 3,300 Rite Aid stores nationwide.
In June 1999, drugstore.com became an online provider of GNC-branded products, including the PharmAssure brand of pharmacist-recommended vitamins and nutritional supplements. As part of this relationship, drugstore.com created a GNC LiveWell Store within the drugstore.com Web site.
We use a variety of Internet and offline marketing resources to generate new customers, increase repeat purchases, and build brand recognition for drugstore.com. The foundation of our efforts is powerful Internet search engine campaigns combined with word-of-mouth referrals from satisfied customers. Our staff manages an inventory of approximately 1 million key words that take users of online search engines, such as Google and Yahoo!, directly to specific products and pages on our Web site. The search program is augmented with banner ads and product placements throughout frequently visited Internet portals such as MSN and AOL, content and product references on health- and beauty-related Web sites, and through direct-to-consumer e-mail marketing programs.
Our drugstore.com affiliate program provides additional opportunities for extending our online presence by enabling select Web sites to introduce their visitors to drugstore.com products and services through direct links from their sites to our store. We also occasionally use direct mail, catalogs and brochures, magazine and newspaper advertising and promotions to generate awareness of our products and drive traffic to drugstore.com.
In addition, we employ a variety of tools, such as discounted and free shipping promotions, dollar-off and percentage discounts, free gifts with purchase, and automatic enrollment in a frequent buyer/loyalty program, called drugstore.com dollars™, which provides customers with a 5 percent rebate on non-pharmacy products. drugstore.com dollars can be used during specific redemption periods for non-prescription purchases. We also offer automatic fulfillment, allowing shoppers to specify automatic delivery every 30, 45, 60 or 90 days for products they use on an ongoing basis.
Our online pharmacy attracts more than 1 million unique visitors per month, many of whom come specifically for access to content and programs that enable them to learn more about medicines and health care options. For example, we offer an eMedAlert program that provides customers with timely information regarding product warnings, updates and recalls provided by the U.S. Consumer Product Safety Commission, the Food and Drug Administration and by manufacturers. We also provide an online drug interaction database, a drug price checker, 24-hour access to licensed pharmacists, and the answers to hundreds of health- and medication-related questions through our Ask Your Pharmacist database.
Another feature we believe aids retention and increases frequency of customer visits is our Flexible Spending Account Store, which is accessible from the pharmacy home page. Shoppers can easily find over-the-counter items that qualify for purchase through pre-tax FSA account dollars. And, we were the first online pharmacy to work with third-party administrators to provide FSA debit cards, which enable holders of the card to purchase FSA-eligible items without having to file for reimbursement for those expenses, saving employers money that normally would be incurred through the processing of those claims.
All GNC-branded product sales are made on behalf of General Nutrition Companies, Inc., and its subsidiaries.
All pharmaceutical product sales are made on behalf of DS Pharmacy, Inc.
All magazine subscription sales are made on behalf of SynapsConnect, Inc.
All other sales are made on behalf of DS Non-pharmaceutical Sales, Inc.