Regional chain takes enterprise view in managing its business
For Bartell Drugs and chief executive officer Brian Unmacht, 2017 is shaping up to be a watershed year.
If all goes according to plan, the 127-year-old company, which for many consumers in the Puget Sound region is synonymous with community pharmacy, will begin to reap the benefits of an enterprisewide reengineering project designed to position Bartells for sustained growth, and solidify the ongoing transition from a family-owned and -operated business model to a more formalized, professional management structure.
The evolution is fitting for a retailer that now generates more than $500 million a year in revenue out of 65 locations in Greater Seattle. Even though it is a fraction of the size of its major competitors — drug chains Walgreens, CVS Pharmacy and Rite Aid, as well as Costco, Walmart, Albertsons and Fred Meyer, among other retailers whose stores provide pharmacy service — Bartells is a large enterprise and needs to be managed as such to remain competitive.
Together with chairman George Bartell and vice chairman and treasurer Jean Bartell Barber, Unmacht, who joined the company as president in January 2015 and was named CEO four months later, developed a plan that will enable the company to, in Unmacht’s words, “work faster, work smarter.”
The linchpin of the initiative is Microsoft Enterprise Resource Planning technology that will provide managers with pertinent data on a real-time basis.
“These changes will sharpen our focus by giving us the right information to make decisions,” says Unmacht. “They will make it much easier for us to take advantage of opportunities in the Seattle market, which is growing rapidly because of the strength of the technology sector, and expand at a consistent rate of two to three new stores a year.”
Unmacht is well equipped to help the Bartell family achieve those goals. Prior to moving to the drug chain, he spent 27 years at REI, a leading purveyor of clothing, footwear and other gear for outdoor enthusiasts. During his tenure there, Unmacht rose through the ranks, eventually serving as executive vice president and chief operating officer, and helped the company grow from eight to 150 locations, and $2.5 billion a year in sales.
“The time is right to scale the business,” Unmacht says of Bartells. “Our strong position in the Seattle market stems from some unique assets. Going forward, we’ll be in a much better position to capitalize on them.”
Arguably, the company’s most important resource is its unrivaled understanding of the needs and wants of local drug store shoppers. Developed over the course of more than a century, that knowledge is being used by Bartells to sharpen its core merchandise mix in health and wellness, and supplement it with products that set the chain apart from the competition — both traditional brick-and-mortar retailers and online merchants.
“The task at hand is to provide a curated assortment that resonates with shoppers,” explains Unmacht. “One way we’re doing that is by working with 150 or so local suppliers, which enables us to offer products that are made in this area and can’t be found anywhere else.”
In addition to facilitating that process, the enhanced systems at Bartells will speed the transformation of the retailer’s marketing efforts. “In the past we’ve taken an ‘ad house’ approach to communicating with our customers. We’re in the process of moving to a comprehensive marketing package, including digital capabilities,” says Unmacht, who adds that the company’s new technological capabilities will lay the groundwork for a potential consumer rewards program.
Bartell’s leadership is aware that retailing is changing at an unprecedented pace, and that the company will have to compete on multiple fronts to remain relevant. Unmacht and his colleagues acted on that insight late last year when they struck a deal with Amazon to include Bartells in the e-commerce company’s Prime Now service. The agreement gives Prime members in Seattle the option of shopping online for items at the drug chain and having them delivered in two hours at no cost beyond the annual fee they pay to Amazon.
“We are excited to leverage Prime Now’s unparalleled delivery speeds to meet our customers’ day-to-day need for convenience,” Unmacht says. “It would have taken a long time and a lot of money to try to replicate this service. Overnight we have an online capability.
“In the future, we’ll see more of this kind of innovative partnership, where people have to rethink where and how they play. At Bartells, we’ll answer those questions in the way that’s best for our customers.”