Familymeds Buys InteliHealth

In a move to strengthen its own fledgling catalog business, pharmacy chain Familymeds in late January purchased the InteliHealth healthcare products catalog business from insurance company Aetna. Terms of the deal were not disclosed, but the transaction includes the 415,000-name customer list, the inventory, and the creative assets of the InteliHealth catalog and Website.

Farmington, CT-based Familymeds, the 15th largest pharmacy chain in the U.S., operates 100 stores in 15 states under the Familymeds and Arrow names. Familymeds launched its catalog of nutritional supplements and healthcare items in July, mailing 250,000 copies of the debut issue. A 200,000-book mailing of a second edition followed in November.

InteliHealth, which last mailed in October, is being folded into the Familymeds book. The spring edition of Familymeds, scheduled to mail in late February to 700,000 Familymeds and InteliHealth customers. Books mailed to InteliHealth buyers will include the cover line “Formerly InteliHealth Catalog.”

A number of products from InteliHealth, such as shoes, will be sold in the spring Familymeds book. Footwear had made up about 15% of InteliHealth’s business. “We didn’t really sell deep into the shoe category at all,” says Rees Pinney, Familymeds’ senior vice president of sales and marketing. “Shoes are SKU intensive, and you need to know the vendors.” At the same time, InteliHealth buyers will see more weight management and diabetics products, such as meters and strips, which are core categories for Familymeds.

With the February mailing, Familymeds aims to reactivate some of the less recent InteliHealth customers. “We’ll test some of the older cells on the list to see who buys,” Pinney says. Familymeds also hopes to better target senior citizens. “These customers are the heaviest users of the products we will be selling in our catalog,” president/CEO Ed Mercadante said in a statement.

Drugstores hit the mail

Familymeds, which plans to mail about 2 million catalogs this year and anticipates $2.5 million in catalog sales, isn’t the only drugstore embracing the catalog channel. In November, $22 billion Woonsocket, RI-based pharmacy chain CVS test-mailed a 50-page home healthcare title targeting older customers.

Catalog industry consultant Gary Ostrager says these retailers are coming to realize the importance of offering customers more than one way to buy products: “It’s all about customer relationship management and giving consumers the convenience of ordering in the channel of their choosing.”

What’s not clear is why Aetna exited the business when it did. Blue Bell, PA-based InteliHealth was founded in 1996 as part of U.S. Healthcare, which Hartford, CT-based Aetna later acquired. As recently as last year, Aetna was willing to invest in the catalog. It had redesigned the book, even giving it a new title: Simple Steps to a Healthier Life.

But Aetna quietly put InteliHealth on the block several months ago. “It was a business decision,” was the only comment an Aetna spokesperson would provide about the sale.

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