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DRUG STORES TEST NEW IN-STORE STRATEGIES

NEW ORLEANS -- Chain drug stores looked inward in devising 10 strategies to improve customer satisfaction.Test results to improve inventory management, internal communication, the shopping experience and the availability of advertised items were presented here during the National Association of Chain Drug Stores Marketplace show, June 24 to 27.The two-year research project was the second study executed

NEW ORLEANS -- Chain drug stores looked inward in devising 10 strategies to improve customer satisfaction.

Test results to improve inventory management, internal communication, the shopping experience and the availability of advertised items were presented here during the National Association of Chain Drug Stores Marketplace show, June 24 to 27.

The two-year research project was the second study executed by the NACDS/American Greetings Research Council, Cleveland, Ohio. The first project focused on leveraging pharmacy customer loyalty in building front-end sales through the "well worth it" rewards program. This study examined ways to empower employees to improve the overall shopping experience.

"There's a common thread that runs through all the different things that the individual council members did, and that is what can be done to improve the in-store experience for shoppers and/or employees, which then affects the shopper's experience," said Dan Raftery, president, Prime Consulting Group, Chicago, project consultant.

Focus groups of category managers, store managers and department heads were conducted to identify key issues negatively affecting store operations. "We struggled with achieving a balance between operating efficiently and offering the customer a positive shopping experience," said David Morocco, senior vice president of marketing, Brooks Pharmacy, Warwick, R.I. "We believe a direct relationship exists between store sales and the shopper's ability to find products. Therefore, these tests were devised to help make the shopping experience easier."

Among those issues to be resolved was an excessive amount of electronic mail and paper communication flowing from headquarters to store level. Not only did store personnel feel the information was excessive but they also said it was often confusing. Canada-based London Drugs, therefore, appointed an administrator to be a gatekeeper of information in an electronics communications test. In the test, all e-mails were re-routed to the administrator who categorized communications to electronic folders. Category specific information was sent to stores on a set schedule. Tests in five stores resulted in 18% to 25% fewer e-mails and a 20% reduction in sheets of paper used for e-mail print outs. The program was rolled out chainwide.

Other tests that were conducted to improve operations and cut employees' workloads included a perpetual inventory reporting system to reduce out of stocks, which drug chains reported as a reoccurring problem. Drug Emporium, Powell, Ohio, developed a new reporting process designed to track perpetual inventory problems. The process looked for stockkeeping units in test stores with no recent movement and compared them against average chainwide movement for these items. The result was a report showing on-hand inventory per store and average weekly sales, which enabled the category manager to determine if inventory adjustments were needed to resolve potential out of stocks. Drug Emporium has decided to role the process out chainwide, said Tim Ziemke, senior vice president.

Excess inventory on slow movers was also a high priority. An automated price markdown procedure was tested with mixed results.