DUANE READE, Inc.
Customer Loyalty Program Relaunch
Client Overview
Duane Reade is the Big Apple of drugstores. Named after
the two streets where its first store was located, the
company is the market leader in the densely populated
Manhattan area. The company operates about 250 stores
in New York and New Jersey. More than half of the companyâ??s
stores are in high-traffic Manhattan (giving the firm
more sales per square foot than any other US drugstore
chain). Duane Readeâ??s stores vary greatly in size (1,600-
14,700 sq. ft.). The company sells prescription drugs, but
nearly 60% of sales come from items such as over-the-counter
medications, food and beverages, and health and
beauty aids. Duane Readeâ??s conveniently located stores
carry an extensive assortment of items, including those
from the pharmacy as well as vitamins, nutritional products,
cosmetics, greeting cards and photo processing.
The company has ranked as the fastest-growing drugstore chain in the industry and was taken private in mid-2004 by equity group Oak Hill Capital Partners.
Client Objective
Duane Reade had conducted an independent study of
their customer loyalty program, Dollar Rewards, in the
fourth quarter of 2008. Based on the results, the companyâ??s
executives came to the conclusion that a re-branded,
re-engineered loyalty program would allow the business to
make considerable improvements in the areas of customer
service and experience, marketing, and merchandising, all
of which would lead to increased foot traffic and therefore
sales in the chain.
The existing Dollar Rewards program was implemented in 1999 and had over 7 million registered members, but only 2.5 million active members as of 1Q09. This program was point-based where by the customer received 1 point for every dollar spent. Once a member reached 100 points (or one hundred dollars spent on eligible goods), a five dollar paper coupon was printed at the point of sale along with the customerâ??s receipt. Any rewards left un-redeemed by December 31st of the year were forfeited by the customer.
The design of the new program, FlexRewards, specified that it would support customer initiated point redemptions via the pin pads, SuperSaver clubs where customerâ??s had the option to redeem points at various tiers with varying payoffs, as well as targeted messaging for customers and stores. Furthermore, members of the program would be able to access and maintain their accounts by accessing them via the Duane Reade website. In conjunction with the website, loyalty members could then combine accounts allowing them to reach savings goals much quicker all while enabling Duane Reade to create unique marketing opportunities based on customer spending habits and provided customer information.
In order to avoid interruption to both the business and the customers, both the Dollar Rewards program and the new FlexRewards program were to coexist after go-live. During this time existing members could be converted to the new program while new membership enrollment was taking place.
Glyphic Solution
Glyphic Technologies was engaged to manage the entire
IT Quality Assurance effort including hands-on testing for
Duane Readeâ??s newly designed 3.5 million dollar customer
loyalty program, making sure that all requirements as
documented by Duane Readeâ??s major stakeholders (including
Customer Service, Finance, Loss Prevention, Marketing,
Merchandising, and Store Operations) for the FlexRewards
program were met and implemented correctly. In addition
to significant coding changes being made to both of Duane
Readeâ??s point of sale (POS ) systems, this endeavor encompassed
verifying changes made to the companyâ??s loyalty
website and customer service application (complete redesigns),
and several back office processes.
Glyphic was able to join the team running creating detailed test plans and approaches, requirements trace-ability matrices, test scripts, test execution trackers and defect management trackers in order to fully support the testing team, business stakeholders, and third party vendors.
In order to make sure deadlines were met, the QA Manager worked closely with both the business and IT leadership teams to identify resource needs and availability. Furthermore, the QA team presented documentation to all parties involved (both Duane Reade internal stakeholders and third party vendors) with the customer loyalty program so they could gain a better understanding of how the newly designed system was intended to function and how the QA team would ensure its integrity.
Glyphic managed the testing effort from initial system design through store pilot and go-live. They led all defect resolution sessions with the software vendors (pin pad, POS , website, etc.) and the Duane Reade IT and business teams. Glyphic was also responsible for providing daily status updates and recommendations summarizing project metrics, potential risks, and mitigation plans to Duane Reade senior leadership including the Director of Store Operations, Director of Systems Development, and the VP/CIO .
Due to its rigorous test efforts, Glyphicâ??s QA team was able to aid Duane Reade in piloting the entire chain with negligible issues reported. Subsequently, the new FlexRewards program was launched on January 16th, 2010 to the entire chain and again issues were minimal. Duane Reade has since been acquired by Walgreens, who so impressed by the loyalty system is seeking to implement it across their entire chain of more than 7,500 locations.
Tools / Techniques
JDA , AS 400, IBM Chain Sales POS , Retail Technology
Corporations StoreMS POS , Retail Ideas, WebSphere, PDX
Pharmacy System
One of the keys to our success is the trusted advisor relationships we build with our clients. Our customers have come to rely on Glyphic to:
> Provide strategic road maps for their specific environment. A Road Map is compiled with
information Glyphic has garnered by closely
working in their environment with their
technical staff.
> Provide focused briefings and technical data to various levels in the organization while avoiding inundating clients in a sea of irrelevant information and data.
> Educate clients on the latest vendor information and market trends involving their systems.
> Help decipher the vendor maze.
> Provide expertise for faster, more successful absorption of software.
Glyphic works through and cleans up the details that all too often have the propensity to fall through the cracks; in short, Glyphic provides highly personalized service that is second to none.
> Provide focused briefings and technical data to various levels in the organization while avoiding inundating clients in a sea of irrelevant information and data.
> Educate clients on the latest vendor information and market trends involving their systems.
> Help decipher the vendor maze.
> Provide expertise for faster, more successful absorption of software.
Glyphic works through and cleans up the details that all too often have the propensity to fall through the cracks; in short, Glyphic provides highly personalized service that is second to none.
