Publication: Chain Drug Review

Breaking Category Conventions to Remain Relevant

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May 1, 2017

Today’s drug store looks nothing like the drug store of your parents’ youth.

Once upon a time, I was able to have neighborly banter with Stan, the local pharmacist, who greeted me warmly and actually knew all about me. Stan freely handed out community news, bad jokes and even a bit of innocuous gossip along with my prescription. Now I get it, things change, and I’m OK without Stan, but as both a consumer and a consultant, I wonder if the changes are for the better.

Today’s drug store, if the word even applies anymore, is an eclectic assortment of allergy medications, cleaning products, packaged food and beverages, candy, “As Seen on TV” gadgets, toys, beauty, you name it. The operative idea is to create a one-stop shop for all things you need (and perhaps some that you don’t). The only item you can’t get these days in most drug stores? A personal relationship with your pharmacist.

The progression from mom-and-pop shops to mass chain stores has been the catalyst for the sector’s evolution. However, it’s important to examine the ways this has affected consumers. After all, the entire industry is working hard to leverage size, capture more market share […]

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Latest Fixtures Help Retailers Get More Out of Their Space

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September 12, 2016

Chain drug retailers are being challenged to free up additional retail space and to reconfigure their stores to keep pace with competitors’ new brandings and offerings, according to Duane Chudy, president and chief executive officer of TCGRx, a supplier of work-flow solutions and pharmacy automation.

The market, he notes, is constantly driving pharmacy operators to invent new ways of doing business to stay competitive and profitable, and retailers are turning to innovate store designs and fixtures as key components in those efforts.

“We have been designing pharmacies and integrating automation for years,” he says, adding that the Wisconsin-based firm helps pharmacies shrink their square footage without sacrificing service.

James Sundstad, vice president of branded environments at CBX, an agency that helps build brands through innovative store designs and other initiatives, agrees that the blurring of retail channels and the increased competition within the drug store industry and from other trade channels has inspired new concepts in store designs, layouts, and fixtures.

Drug stores, without abandoning their pharmacy and health and wellness images, have evolved into convenience stores in the minds of many customers, whereas other customers are turning to convenience stores for many of their over-the-counter medicines.

Mark Gillham, collaborative […]

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Getting close to the consumer — emotionally

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August 6, 2016

By gobbling prime real estate and mastering the science of site selection, the top national drug store chains have absolutely succeeded in getting as close to the customer as possible.

But in an era when almost anything you want is available at the touch of a button — not just on your computer at home but on the smartphone in your pocket — is it enough to get close to the customer physically? What about getting close to the customer emotionally?

Go to any of the top chain drug stores and just watch as people try to shop the O-T-C aisles. Invariably, you’ll see folks standing around bewildered as they try to figure out which cold medicine or foot cream is the right one for them. They look confused, even lonely.

Personally, I’ve been to the drug store a thousand times over the years. Only once do I remember a pharmacist coming out from behind the counter to help, an experience that was as highly satisfying as it was rare. And yet this type of friendly, personalized exchange was commonplace in the era when most drug stores were mom-and-pop operations.

Today, three dominant operators have achieved impressive scope and scale, […]

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Makeovers Reinvigorate Two Brands

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June 6, 2016

Two restaged brands have generated high hopes in the skin care and hair care categories.

The Cetaphil skin care brand has been revamped by Galderma Laboratories L.P., while Hain Celestial’s Avalon Organics skin care and hair care products have been repositioned by brand agency CBX. Cetaphil has undergone a full graphics and packaging upgrade to provide a more simplified shopping experience at shelf and improved portfolio differentiation, as well as clarity of product benefits.

Avalon Organics, one of the first brands to offer a full line of certified organic products, has been given a fresh perspective for a new era by CBX. The brand got its start when organic personal care products were mainly purchased by well-educated, high-income women in their 30s or 40s with kids, noted CBX managing partner Gregg Lipman. “Avalon Organics earned a reputation for offering the highest-possible quality personal care products” he said. “As the consumer has evolved, Millenial and Gen X women crave an emotional connection ‘beyond organic.’ It was time to clarify Avalon Organics brand story for today.”

To that end, CBX experts in branding, design strategy, and verbal strategy relied on extensive consumer conversations to reframe the brand with the personal care […]

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How Chain Drug Stores Can Stand Out From the Crowd

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April 22, 2016

For practical purposes, we all consider convenience stores to belong to one retail sector and drug stores to another. In a very real sense, however, the modern chain drug store is a c-store. Convenience is the raison d’être for the extraordinarily well-positioned real estate of the drug store sector as a whole. The strategy, of course, is to create one-stop-shopping destinations for neighborhood customers who already need to visit the store to pick up prescriptions. In this model, the role of the pharmacy is roughly analogous to that of the gas pump at c-stores — it is the primary traffic driver.

But in case you haven’t noticed, traditional c-stores are coming into their own with strategies that substantially augment this approach. The idea is not just to ramp up productivity by offering more reasons to walk into the store; it is to elevate the experience in order to cement brand loyalty and drive repeat visits.

When you walk into a chain drug store today, is there anything novel or exciting about the experience? How does the overall atmosphere make you feel? “Experiential” is the biggest buzzword by far in all sectors of retail today. Yet, the experience in our drug […]

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With Elevated Offerings, Drug Chains Can Own Beauty

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August 26, 2015

National drug chains are working hard to drive more sales in the beauty care category.

The merged Walgreens Boots Alliance Inc., for starters, is revamping its stores with a swankier cosmetics offering centered on the Boots No7 skin care line, which already drives traffic across Europe. For its part, Rite Aid Corp. is rolling out its Receutics Active Skin Repair, a new line of over-the-counter, dermatologically tested skin care products. And of course, CVS/pharmacy continues to reap the benefits of its popular Nuance Salma Hayek line.

This emphasis on beauty is no accident. Clearly, drug stores need to leverage their proximity to consumers and drive more traffic to the store. Instead of emphasizing food offerings, like many drug stores are doing, there’s an opportunity to focus on a higher-margin offering, such as cosmetics.

So, how can retailers elevate their game in the high-margin beauty aisle and make it a destination? One approach would be to truly own the category.

A few years ago, for example, when consumers needed pet food, most of them just went to the grocery store. Today, national pet retailers own the pet food category. These chains smartly created strong narratives that positioned themselves as the real […]

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Envisioning the ‘drug store of the future’

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April 28, 2015

The concept cars unveiled at major auto shows always seem a bit “out there.” But by making a practice of radically rethinking their products, global car makers have learned to unleash their creativity and position themselves for the future.

Are chain drug stores doing the same? How much time and money does the industry spend envisioning radical, out-there, seemingly impractical prototype stores — metaphorical “concept cars” that could ultimately exert real, paradigm-shifting influence years or decades down the line?

When it comes to the already lagging front of the store in particular, the industry would do well to entertain the possibility of radical shifts that would amount to an overthrow of the current, convenience-oriented model.

What could replace that current model?

When they aren’t ordering stuff online, both baby boomers and Millennials are keenly interested in health and wellness — a trend that is likely to gather steam with time. Indeed, the definition of health and wellness is expanding to encompass an ever-wider circle of both products and services.

For example, people will continue to embrace the notion that food is medicine, and that community is essential to both health and well-being. For nationwide drug store chains, then, this all […]

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Front end of the store is a focal point for innovation

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August 20, 2014

By Joe Bona “If you’ve seen one chain drug store, you’ve seen them all.”

Such was the prevailing attitude just a few years ago. And while it is still true that pharmacy sections do tend to be fairly similar from location to location, over the past few years chain drug stores have been tinkering with their front end as never before.

Walgreens’ smaller-format “food desert” stores, which are designed to bring fresh food to underserved urban neighborhoods, are but one example. And in New York City, Walgreens’ Duane Reade stores customize offerings from one neighborhood to the next.

After data showed significant differences in customer needs in various parts of the city, Duane Reade responded by changing the front end of the store to better reflect the character of the local community. Drive across the bridge to Duane Reade’s Williamsburg, Brooklyn, location and you find a hip store replete with a beer growler section; head to Wall Street and the offerings include sushi amid sumptuous environs befitting the financial industry’s “masters of the universe.”

But as the industry looks to the future, how will its newfound flexibility — the basic willingness to abandon cookie cutter store formats and experiment with […]

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Community Sense Key to Today’s Pharmacy

April 28, 2014

By Joseph Bona

When Norman Rockwell’s portrait of a pharmacist appeared on the cover of The Saturday Evening Post back in 1939, it rang true to readers. The painting showed a moustached pharmacist mixing up a concoction for a child with a doozy of a toothache. It reminded people of their own local druggists, who played central roles in the town and donned many hats in a given day—weatherman, advisor, storyteller, comedian and debate moderator, among them. At the typical small-town drug store, the pharmacist stood behind the counter all day filling prescriptions and chatting with regulars. Old-timers told fish stories and lounged on benches out front. Children filed in after school to buy penny candy from glass jars.

But if this sounds like an era long past, think again. While the setting has certainly changed remarkably since Rockwell’s time, community pharmacies still boast many of the same characteristics that made drug stores such iconic hubs of American life during the 20th century.

For starters, Americans continue to report feeling extraordinarily connected to their local pharmacists. Some consumers will even change stores to follow a transferred pharmacist to another location. And just as they always have, Americans still shop drug […]

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Time is now for pharmacies to ramp up private label

August 19, 2013

By Todd Maute

Competition has always been heavy in retail. But, for a variety of reason, it has turned into a veritable slugfest over the past few years. Amid such trends as consolidation, Internet retailing and product commoditization, retailers have just a few ways in which to set themselves apart. Virtually all of these differentiators hinge on one thing: brand.

This is why pharmacies have been working so hard to make progress in brand development and private label branding in particular. The goal is twofold: First, drug chains aim to strengthen consumer impressions in ways that have more to do with emotions and psychology than mechanistic, tactical approaches along the lines of, “Can we have the lowest price on the street?” Second, they want to capture incremental share from other trade classes, and even health services companies.

And so, certain chains are now being far more precise about private label branding in the pharmacy context. Walmart, for one, uses its catchall Equate brand for generalized, over-the counter products such as medicine, vitamins and personal care items. But the discounter doesn’t just segment by category: Its ReliOn brand speaks to a specific customer segment -people with diabetes.

Other chains have created […]

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