MUNDELEIN, Ill. — Those who follow retailing say Walgreens was in need of an upgraded store base after years of stamping out new stores in the same mold.
Colin Watts, Walgreens' chief innovation officer, who joined the drug store company about a year ago, admitted as much during a presentation earlier this year at the Product of the Year Awards. He said the stores had gotten a bit cluttered and were looking aged.
Bill Bishop, chairman of Willard Bishop, Barrington, Ill., was more direct. “It's a nice store but really your grandmother's store.”
Bishop ventured out in Chicagoland last week to see how Walgreens' new Customer Centric Retailing format differed from a traditional Walgreens store. Here are his observations after visiting a recently remodeled Walgreens here.
“The most prominent difference between the two stores was the way product prices were communicated on the shelf. In the traditional Walgreens, the pricing communication was busy, inconsistent and a little confusing. In the customer-centric store, the pricing was presented in a simpler and more powerful way. Most of the sales lift achieved by the customer-centric remodel is probably attributable to the increased effectiveness of new price communications.”
The pricing message was streamlined with:
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A disproportionate number of items priced at $1 and $2 price points, along with the majority of products priced at a limited number of price points, e.g., $X.99 or $X.49. “This is similar to where Wal-Mart is heading in terms of pricing simplification,” stated Bishop.
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Consistent savings for multiple purchases shown right on the price tag: single items at 69 cents or three items for $2, and single items for $1.19 or three items for $3.
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Made extensive use of bright green overlay tags that call out “Great Buys” on certain shelf prices. “This is a very effective way to quickly get credit for new, lower prices,” Bishop said.
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Increased the number of “Great Buy” themed end displays that use the bright green and offer promotional products that are edited, in many cases, to their target shopper, i.e., the small single households and older shoppers. For example, one end display offered small cereal boxes at a good price (a 7-ounce box of Kellogg's Corn Flakes for $1 and a 9.2-ounce box of Post Spoon Sized Shredded Wheat for $1).
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Emphasized “affordable essential” tags that draw attention to stronger prices of staple grocery products.
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Showcased “register rewards” prominently where buying a threshold quantity of manufacturer products will result in coupon savings of $5, $10 and even $20 during the next visit. Rewards were particularly promoted in health and beauty care. “This is a powerful way to leverage Catalina coupons that are available but not promoted in a similar way in most supermarkets,” Bishop noted.
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Also included an array of special price signs, e.g., mega savings and yellow sale product signs.
Bishop said the customer-centric Walgreens was more shoppable than its traditional store because of:
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Lower profile made the store feel brighter and easier to see across the store.
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Navigation to specific sections was made easier because of new aisle signs.
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Increased number of logical adjacencies, e.g., all paper from tissues to towels in the same section. “While this particular adjacency wasn't new, it was easier to see,” said Bishop.
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Item assortment edited to smaller sizes.
Also in the customer-centric store, the staff as well as the availability of large and prominently placed red “help buttons” for service, made it feel more welcoming, or it could have just been a reflection of the personality of the store, said Bishop.
Bishop said he was impressed with the new model overall, but added there is still a fairly heavy emphasis on popular snacks and beverages for convenience shoppers. “So healthy living isn't a consistent theme across their assortment editing. This seems to me to be an inconsistency in their brand positioning.”