TORONTO — Shoppers Drug Mart has long enjoyed a reputation for having one of the most compelling and successful front-end presentations of any North American drug store chain. Although the COVID-19 pandemic created considerable challenges for Shoppers, as it did for all retailers, the chain has weathered the turbulence well and is poised for ongoing growth.

During a recent virtual roundtable hosted by Chain Drug Review, Pat Dean, senior vice president of front store and category management at Shoppers, discussed the experience of the past year and the key learnings it has furnished as well as providing a glimpse of where Shoppers’ front-end business is headed in the near future. He was joined by a number of suppliers, including Greg Bradley, chief executive officer of Foundation Consumer Healthcare; Ken DeBaene, vice president of sales at Lifestyles Healthcare; Dan Nowicki, senior vice president and general manager for Canada at eos Products; Dan Quail, president for North America at Similasan; and Ron Stubbs, vice president of sales at ANB Canada.

As a 25-year veteran at Shoppers, Dean is particularly well qualified to discuss the chain’s front-end activity and direction. His resume includes an extensive range of responsibilities, from the development of category management to leadership of private brands and the launch of Shoppers’ Optimum loyalty program. As a member of the store concepts and development team, Dean was part of the group that developed the chain’s large-format store that accelerated its growth beginning in 2001.

While many, if not most, drug chains now rely on the pharmacy for as much as 70% of sales and consign the front end to a distinctly subordinate supporting role, Shoppers is thought to split its top line roughly evenly between the pharmacy and the front end, maintaining the ratio it enjoyed before it was acquired by Loblaw Cos. in 2014.

Over the years, Shoppers has succeeded in making the front store a destination for Canadian consumers. Arguably, the strongest lure in a powerful product assortment has been the beauty department, which offers prestige brands normally found only in department or specialty stores.

“We’re unique in the world, we think, in that we’re one of the few, if not the only, retailers to have the benefit of a prestige beauty business, a mass beauty business and a dermatological skin care business,” says Dean.

However, it is not only the brand assortment that explains Shoppers’ success in beauty. The entire customer experience, Dean adds, is important. While the overall atmosphere is calm and relaxed, makeover events (suspended during the pandemic) create energy and excitement.

In 2003, Shoppers reinforced its strong beauty positioning by unveiling a dedicated format, the beautyBOUTIQUE. The pioneering format introduced a number of innovative concepts, including open-sell displays and unbiased beauty advisors. With more than 440 beautyBOUTIQUEs now operating across Canada, Shoppers has changed the way beauty customers purchase prestige brands: Instead of having to drive to a large regional mall to find the brands they want, they can find them at their local Shoppers outlet or beautyBOUTIQUE.

Dean stresses that the role of the beauty advisors is a critical one. “They’re not just salespeople; they have ongoing relationships with their customers,” he says. “Our in-store tools [give them] the ability to reach out directly to their customers at store level to let them know, based on their brand preferences, when new launches are happening or when a product that they use regularly has arrived. So the personal relationship that our beauty advisors have with our customers is huge — it’s a major contributing factor to how well we do.”

Shoppers has not relied solely on beauty to differentiate itself from other drug chains. It also offers a surprisingly extensive array of electronics and entertainment items and, years before its acquisition by Loblaw, Canada’s largest grocer, the chain had developed a substantial convenience food offering.

According to Dean, Shoppers deploys two or three different levels of what it terms its enhanced convenience food model. A full enhanced food store includes a produce offering with fruits and vegetables and fresh packaged meat. All of the enhanced food stores provide frozen food, dry grocery, pasta, cereal and canned goods. A grab-and-go variant offers sandwiches, salads and other quick meal solutions.

With a fleet of 1,300-plus stores, of course, not every location justifies a full enhanced offering, Dean points out. “Location is a major criteria as to what level of offering we provide,” he explains. “Urban, high-foot-traffic type neighborhoods top the list in terms of doing well with a full enhanced offering. When you get into more suburban markets where people have to get into a car to go somewhere, they’re probably not stopping at a Shoppers to pick up food. But for someone in downtown Toronto walking past the Shoppers on their way home to the condo, it’s incredibly relevant.”

Needless to say, the pandemic created multiple challenges, all demanding immediate response; Dean likens it to “one big roller coaster ride with a lot of twists and turns, a lot of ups and downs.” The first requirement was modifying the in-store environment to ensure maximum safety for customers and employees, and that meant not only masks and protocols reinforced by signage and Plexiglas shields, but such details as removing testers from the cosmetics and fragrance fixtures and shutting down entirely high-touch services such as passport photos and lottery tickets.

Complicating the situation was the fact that the state of the pandemic varied from province to province, from one municipality to another. Consequently restrictions varied from one locale or province to another, demanding constant monitoring and response.

Needless to say, the sudden changes in customer behavior also had major impacts. Overall store foot traffic fell, but more than offsetting the decline in transactions was the fact that people bought much more as they consolidated their trips. And, of course, Shoppers’ e-commerce business skyrocketed.

Moreover, the pandemic had a varying impact on different kinds of store locations. Dean points out that Shoppers’ 1,300 locations include stores in major malls, community malls, downtown office towers, multi-use complexes, and suburban stores. Stores in malls and office towers that suddenly were largely deserted suffered major reductions in foot traffic and sales volume. At the same time, though, stores situated in or near residential communities saw their sales increase ­exponentially.

That fact meant that inventory flow had to be adjusted as product allocation was redirected to stores experiencing heightened demand. Dean lauds the chain’s operations team for doing a great job of ensuring that was accomplished.

The changes in shopper behavior required that promotional strategies and events be adjusted as well. “Part of promotions is creating a sense of urgency and excitement, which was not appropriate during the early days and throughout the pandemic,” Dean observes. “We adjusted how we brought that to market. So instead of a one-day sale, it would be a three-day sale, to enable people to shop at their convenience without creating inappropriate traffic levels.”

Dramatic lifestyle changes as people shifted to working at home — or lost their jobs — naturally upended front-end category sales trends. Segments such as color cosmetics, gum, deodorant and cough-cold remedies tumbled, as did such travel-related products and services as sun care products, anti-diarrheal medicines and passport photos. On the other hand, food, electronics and entertainment, household cleaning and any self-care items experienced strong sales surges.

In terms of taking care of its customers’ needs, Shoppers clearly succeeded in its response to the pandemic. Dean expresses pride in the fact that the chain’s customer satisfaction (OSAT) scores improved during the pandemic.

“The trust that we have with the Canadian consumer is very high, and we’re extremely pleased both with our OSAT scores and the feedback that we received from our customers along the way,” he says.

Dean points to five key learnings for the front end that emerged from the pandemic:

• The need for an integrated, seamless omnichannel shopping experience was reinforced.
• With fewer shopping trips, making the most of each one in terms of meeting customers’ needs has become vital.
• The critically important ability to accelerate opportunities by being able to see emerging trends and changes and pivot quickly to meet them.
• The value of the convenience that Shoppers provides, represented by such offerings as quick and easy meal solutions.
• The enormous value of Shoppers’ promotions to its customers, offering them value on every shopping trip.