Longs Drug Stores, a leader in the U.S. retail drug industry, recognized the impact the Internet could make on its brand in the long term. Together we developed a program to position Longs as an integral part of its customers' health care experiences and to grow its share of the retail prescription drug market.

The challenge
Longs Drug Stores' tradition of caring began in 1938 when brothers Joe and Tom Long opened the first Longs store and helped institute the idea of self-service in the retail drug industry. Some 60 years later — with more than 400 stores in California, Hawaii, Nevada, Colorado, Washington and Oregon — the company needed to address projected prescription volume growth and an increasing customer demand for health information.

Longs needed to pursue an aggressive, distinct, multi-channel plan that would push its customers to both its stores and Web site. This solution would also:

• Extend and reinforce the relationships that Longs had with its existing customers;
• Eliminate the friction between its customers and its pharmacists caused by long wait times for prescription pick-ups;
• Prevent the cherry-picking of Longs core customers by mail order and other Web-based pharmacies;
• Attract new customers;
• Grow its prescription drug market share.

The solution
Longs Drug Stores asked Deloitte to develop an Internet brand that would enable the company to become a leader in the retail drug industry. We initially worked with Longs to develop its online customer experience.

A collaborative approach
The joint Longs/Deloitte team first identified three critical areas under the overall umbrella brand strategy. These included improving existing stores, aggressively entering the online market, and evolving toward wellness services. The team completed a number of steps to create a plan that would differentiate Longs Drug Stores. These included:

• Researching customer and market trends;
• Drafting functional requirements;
• Creating a technical architecture;
• Identifying and interviewing potential technology partners;
• Drafting a business plan and financial analysis.

Under the direction of the combined project team, NEXTLINK — our applications service provider — was employed to develop the IT infrastructure and platform for the Web-based system.

Results
The successful Internet strategy complements Longs' in-store operations, integrating the Web with the bricks-and-mortar and telephone channels that its customers traditionally use. The Web site also reinforces Longs' role as a partner in managing its customers' health care, effectively informing and educating its site visitors and simplifying its interactions with Longs pharmacies.

"We developed a Longs Internet brand that encourages our customers to view us as a trusted, credible source for health and well-being information and helps them manage their personal health," said Brian Kilcourse, Longs senior vice president and CIO. "The projection calls for this business model to achieve positive cumulative discounted cash flow after four years and significantly higher margins than our existing physical store network."