inside the wake of CVS Health announcing its plans to acquire insurer Aetna for roughly $69 billion, aiming to safeguard against challenges in retail along with health care, Walgreens is actually taking a different approach to grow, starting at the front of its stores.
The Illinois-based drugstore chain announced Monday a rebranding strategy aimed at educating consumers on Walgreens’ long-standing history, along with stepping up efforts to target a younger demographic, particularly females.
Earlier This kind of year, Walgreens said the item might acquire roughly 1,900 stores by the Rite Aid nameplate, which are still being transferred over. Initially, Walgreens tried to outright buy the chain in 2015, along with has since scaled back the number of stores inside the purchasing agreement when met with regulatory scrutiny.
“This kind of comes back to having [pharmacy] professional along with experts within our stores,” Walgreens Chief Marketing Officer Adam Holyk told CNBC about the Rite Aid deal. “Customers like knowing there’s someone there to help them when they need the item.”
Even as internet giant Amazon threatens to enter the drug industry, having already held preliminary talks with generic drug makers about potentially entering the space, Walgreens is actually pouring money into its own store renovations along with right now a reinvented marketing campaign.
The company will add a completely new tagline to its logo: “Trusted Since 1901.” Meantime, Walgreens is actually modernizing its business, showing off an updated mobile app, a strong loyalty program, along which has a website where shoppers can buy online along with pick up in store.
“We are pharmacist led, inside the services we provide, [yet] we do view the retail aspect as important,” Holyk said. “The question for Walgreens becomes: ‘How can we translate our brand into the some other products we sell today?'”
The company said its repositioning intends to reach two demographics of female shoppers –
millennials along with Gen X – to make Walgreens their “preferred pharmacy of choice.”
Walgreens has already brought in more “appropriate” brands for younger shoppers, which has a big emphasis on its beauty aisles, according to Holyk.
Walgreens has revamped the aisles where the item sells CoverGirl along with Maybelline cosmetics, among some other brands, in more than 1,000 stores. Though the company didn’t offer a timeline on future remodels, the process is actually ongoing.
Roughly 3,000 beauty specialists have been hired to offer product expertise, aiming to make its stores more of a go-to destination for makeup.
In acquiring European drugstore chain Alliance Boots roughly three years ago, Walgreens was able to bring more higher-end beauty labels to its shelves. right now, the company is actually mixing up even more of in which merchandise today, where there’s money to be made off millennials.
To be sure, Walgreens isn’t the first to tap into a booming beauty market, along with the company has already been met by competition by the likes of Ulta along with Sephora, both of which are expanding across the U.S. at a rapid clip.
CVS along with big-box retailer Target have made similar bets on their beauty aisles of late, putting increasingly well-liked Korean beauty (or “K-Beauty”) brands on sale, along with giving shelves a fresh coat of paint along with eye-popping light fixtures.
Sales made at the so-called front of store are also much slimmer when compared to Walgreens’ pharmaceutical business. U.S. retail (non-pharmacy) sales fell 1.8 percent in Walgreens’ latest quarter, along with account for roughly 30 percent of total revenue. Walgreens doesn’t break out sales within its beauty department, though management did point out on a call with analysts along with investors in which the company’s health along with wellness along with beauty categories have been its strongest.
Makeup aside, the company is actually also trying to learn what types of food along with beverage options millennials want more of, according to Holyk.
Walgreens also is actually adding completely new items along with packaging for its private-label brand, known as Nice! Bacon snack mix along with organic sea salt popcorn are two additions. along with the item recently struck a deal with FedEx to bring mail drop off along with pick up services to more than 7,500 of its stores nationwide, in another attempt to lure customers inside.
In a separate pilot test, Walgreens is actually collaborating with Med Express to open urgent care centers in a handful of stores spread across four states, which could lead to future expansion. The level of care offered there might be a step higher than a traditional walk-in clinic. Today, roughly 400 of Walgreens’ 8,100 drugstores offer some sort of clinic services on site. For comparison, CVS boasts more than 1,100 walk-in clinics.
“inside the areas in which we are curating, we are trying to understand what consumers value,” Holyk said. “the item is actually all part of our brand transformation … looking at the needs of our core customers, along with we will continue to innovate.”
Walgreens’ stock ended the day Monday basically flat, on the heels of CVS revealing its plans to buy Aetna.