Walgreen Co.’s Customer-Centric Retailing (CCR) transformation is reshaping the shopping experience to inspire consumers with choices and ideas, two of the program’s architects said at a conference here.


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Walgreens execs shed light on CCR strategy

September 14th, 2009

COLORADO SPRINGS, Colo. – Walgreen Co.’s Customer-Centric Retailing (CCR) transformation is reshaping the shopping experience to inspire consumers with choices and ideas, two of the program’s architects said at a conference here.

Walgreens is still giving shoppers what they want, but with “a little bit of extra spirit and a little bit of extra inspiration,” noted chief marketing officer Kim Feil at the Grocery Manufacturers Association Executive Conference.

Mark Wagner, the chain’s executive vice president of store operations and community management, said CCR entails combining convenience with individualized service. The initiative, he remarked, is “a way of life for Walgreens,” one that is constantly evolving and being tweaked based on consumer research and focus groups as it is rolled out nationally.

With its entry into Alaska this summer, where it now has three stores, the chain has a presence in 50 states. It will open its 7,000th outlet on October 1 in Brooklyn, New York.
Feil said the retailer’s culture had changed from being transaction-focused and product-driven to being aligned with consumers.

To that end, Walgreens has overhauled its marketing, merchandising, operations, supply chain and logistics to be prepared “from the front to the back” for CCR.

She said the five elements of the initiative are: a better in-store experience, improving choices without cluttering stores, strengthening consumers’ value perception, increasing promotional effectiveness and bolstering supplier relations.

It took about 1 million people hours to develop the concept, she noted. At the store level, that means revamping key categories, changing signage and lowering profiles.

“When consumers come in that front door, we wanted the pharmacy to pop,” said Wagner. “We wanted them to know exactly where that pharmacy was, where our cosmetics department was, where our photo department was. That’s really what was accomplished through the CCR effort.”

He said “air rights” had been opened up so that customers in any section of a store could see the entirety of the interior.

Beauty selections are more identified by brand to reduce confusion, health product presentations are more solution-driven, the oral care section devotes more space to best sellers, and dietary supplements have been clearly segmented and moved from the front of the pharmacy to an aisle where the top shelf is easier to reach.

While the chain has reduced its SKU count by 15% in CCR stores, customers say selections have expanded. “This is classic psychology of choice,” said Feil. “The more you give people to choose, the less they buy.”

But giving multiple facings to top sellers creates a perception of greater choice by simplifying the shopping process, she noted.

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