The year is half over. Much has happened. Yet little has happened. Much has changed. Yet little has changed. The year has gone pretty much as expected. Yet unexpected events have kept the industry off balance.

chain drug retailing, David Pinto, Joe Magnacca, Walgreens, drug chain, Mark Wagner, Bryan Pugh, CVS/pharmacy, Store of the Future, Cheryl Mahoney, Rite Aid, NACDS Total Store Expo, Big Data

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Inside This Issue - Opinion

The most significant events thus far in 13

July 8th, 2013
by David Pinto

The year is half over. Much has happened. Yet little has happened. Much has changed. Yet little has changed. The year has gone pretty much as expected. Yet unexpected events have kept the industry off balance.

Against that premise — or those premises — here’s a look at the most significant events thus far in 2013:

• The departure of Joe Ma­gnacca from Walgreens. Even those industry people who had heard rumors and reports that the senior Walgreens executive would be leaving America’s largest drug chain in favor of a more senior position elsewhere were surprised to learn that he had left — and where he went (to Fort Worth as chief executive of RadioShack).

• The speed at which Walgreens adjusted to Magnacca’s departure. Less than a half-year after he left, you don’t much hear about Magnacca either at Walgreens or in industry conversation. The drug chain, meanwhile, has moved quickly to replace the executive by putting more authority in the hands of senior merchant Bryan Pugh; by bringing him closer to Mark Wagner, Walgreens’ senior operating executive; and by tapping into the retailer’s extensive pool of talented and experienced merchants to redistribute some of the burden formerly shouldered by Ma­gnacca. As a result, Walgreens, after a shaky start to 2013, is once more on track to record the best sales year in its history.

• The wait for CVS/pharmacy’s Store of the Future. Originally scheduled to debut in late winter, the unveiling has been repeatedly postponed — to late summer, according to the latest stories. Also in doubt are the number of Stores of the Future CVS plans to unveil — and just where they will be located. However, suppliers who are working closely with the drug chain in developing the prototype pretty much agree that it will prove worth the wait when it finally arrives.

• The new assignment for Cheryl Mahoney. The former head of beauty care at CVS is now firmly established in her new role of heading the drug chain’s effort to customize its stores to its communities and customers. But industry people continue to ask questions — and Mahoney’s new role remains a subject of intense speculation. It should be added, however, that she is already making a difference. The direction of beauty care, on the other hand, remains something of a mystery going forward, primarily because Mahoney’s replacement, who came from outside the industry, is not yet familiar to many industry people.

• The recovery at Rite Aid: How real? Rite Aid’s monthly operating figures remain only marginally better than they were, say, a year ago. But there’s no denying the power of the retailer’s wellness+ program — or the success Rite Aid has thus far enjoyed in using the program to attract customers. Indeed, the fact that Rite Aid continues to both roll out and expand the contours of wellness+ is a testament both to the program’s appeal and the company’s belief in the power of the initiative. Thus, the feeling in the industry is that wellness+ is indeed a very big step in the right direction — and good times in Camp Hill, Pa., are right around the corner.

• The sense of excitement — and apprehension — surrounding the approach of the first NACDS Total Store Expo. The excitement stems from the fact that the event has drawn unprecedented industry interest and support, especially from the retail community, where over 1,000 people have thus far signed on. The apprehension is based first on a fear of the unknown, and second on the uncertainty of just what will happen once the meeting begins. Both are natural concerns — and both will quickly vanish once Total Store Expo opens its doors. Thus, a month before it starts, the initial event is even now assured of taking its place among the signal conferences in NACDS history.

• The emergence of Big Data. Information has suddenly become all the rage in chain drug retailing. Indeed, more data has become more readily available — and drawn more scrutiny — for industry organizations and people than at any time in the past. Still to be determined is what the retailers and suppliers intend to do with it.

A recent article in The New York Times discussed CVS’ plans to customize its stores to the geography — city versus country, affluent versus less affluent, Caucasian versus Hispanic, and so on. Appealing, yes, but hardly new; laudatory but hardly revolutionary; interesting but hardly unique. After all, isn’t every other U.S. retailer currently embarked on the same journey? Apparently, chain drug retailing hasn’t yet learned that data gathering is not an end, but only a beginning, of the long and often tortuous journey toward understanding the ­customer.