Inside This Issue - News
Analysis: Store alters parent company’s approach
July 18th, 2011
by David Pinto
NEW YORK – The 22,000-square-foot Duane Reade drug store that opened its doors at 40 Wall Street for the first time in the days immediately following the Independence Day holiday has already received more news coverage and wider, more favorable exposure than any drug store that has yet opened its doors in America.
The consumer press has gushed about the myriad marvels that set this store apart from all others that have called themselves drug stores.
The sushi bar, the juice bar, the sprawling and breathlessly exciting beauty offering, the manicure salon, the blow-dry hair service, the fresh food offering, the natural food assortment, the shoeshine stand, the on-premises physician, the service that allows customers to charge their mobile phones while shopping, even the various pharmacy consulting services that are tied together, for the first time since Walgreens acquired Duane Reade, under a Powered by Walgreens Pharmacy Network banner that, aside from melding the two logos, allows Duane Reade and Walgreens pharmacy shoppers to refill their prescriptions at either chain’s stores — these services have been talked about, written about, discussed, debated, dissected and praised.
Throughout the week Joe Magnacca, Duane Reade’s president and the principal architect of the new store, patiently answered questions about the store posed by correspondents from major television stations and at least one of the business channels. New York City’s major dailies wrote admiring stories about the store. Some 200 supplier executives attended a preopening reception, where they were joined by key Duane Reade and Walgreens staffers and a handful of trade media. Their response, again, was universally positive: This is arguably the most uniquely dramatic drug store yet to open its doors in the United States.
First-week sales appeared to justify that response: Volume on those opening days put the new store among the highest-volume units in the Walgreens chain.
Talk rapidly spread to the effect that Walgreens would, later this year, open a second, larger unit in Chicago’s Loop. Plans were reportedly under way to create an urban unit within Walgreens to explore additional big-city opportunities for these superstores in such cities as San Francisco. Finally, there was much debate about an appropriate name for the store. Clearly, the designation drug store came nowhere near adequately describing what the store stood for, represented or sold. Magnacca suggested that an appropriate name would be daily living store, a tag most observers willingly accepted.
But the real story behind the opening was not the store itself, it was what the store said about the distance Walgreens has traveled in the two and a half years since Greg Wasson was named the retailer’s chief executive officer.
In the years since Dan Jorndt and Vern Brunner departed as CEO and chief merchant, respectively, Walgreens had acquired a reputation as the most staid, predicable and, yes, boring drug chain in America. Seldom did a new retailing concept initially appear in a Walgreens drug store. Indeed, the company became known primarily for testing new ideas in one or two stores for years — before expanding the test to a half-dozen stores.
The Wall Street daily living store has changed forever Walgreens’ approach to mass retailing. If offers more, and more exciting, inducements to shop a drug store than have yet been presented to an American drug store customer. No matter that all these innovations won’t succeed or survive. The fact that Walgreens has seen fit to offer them to consumers who have too often in the past confined their Walgreens shopping trips to the prescription counter says all that need be said about its commitment to the customer in this new age, an age when the customer has come to expect more from a drug store than a pharmacy counter and a broad selection of branded and private label health and beauty aids.
It’s easy to find people within Duane Reade and Walgreens to applaud for this laudable effort. As the saying goes, success has many fathers while failure is an orphan. Magnacca, who approved this location before Walgreens bought Duane Reade last year, is key. But he’s not the only key. Wasson deserves credit for approving a project that is so different in style, tone, focus, intent and investment than anything that has preceded it at Walgreens. The Duane Reade merchandising team (several Walgreens merchants pointed out that they deserve no credit for this effort) transformed the store from concept to reality, with chief beauty care merchant Marcia Gaynor getting much of the credit for the stunning Look Boutique presentation and assortment.
But if credit is being meted out, it is really not fair or accurate to cite one person or even a group of people. Credit, in the end, must go to an organization that dared to think beyond today, to boldly imagine what might come after what comes next, to envision a store and a location and a presentation that would appeal, simultaneously, to working people, local residents and the never-ending train of tourists from here and abroad who line up nonstop to take pictures in front of the New York Stock Exchange a short block from the store.
That this store can effectively serve three such diverse groups is ample testimony to an idea — and to the future of chain drug retailing in America.