Wendy future of retail top

Retailing overhaul not limited to drug stores

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In the last issue of Chain Drug Review, this space was devoted to an assessment of brick-and-mortar drug stores’ future in the wake of market dynamics forever changed by the COVID pandemic, the pressing need to revamp health care delivery in America, and shoppers’ enthusiastic embrace of digital technology. Chain drug retailers were praised for the alacrity with which they are responding to those forces, paced by industry leaders that are repositioning their stores as neighborhood destinations where health care consumers can do much more than fill ­prescriptions.

Members of the trade class are forging a new raison d’etre. Founded securely on their pharmacy heritage, drug chains aim to become community centers for primary care, routine diagnostic testing and related services. By providing ease of access to quality care at reasonable prices, they give patients and caregivers compelling reasons to visit their locations at a time when online shopping and omnichannel pickup and delivery options obviate many of the needs that used to prompt consumers to shop a drug store.

As Walgreens Boots Alliance, CVS Health and other drug chains go about reinventing themselves, where does that leave other types of retailers? Although many of them don’t have as clear cut a path to keeping their brick-and-mortar stores relevant as pharmacy operators do, supermarkets, discounters and dollar stores share many of the same challenges. They too will have to figure out new combinations of products and services to keep consumers — who now have an unprecedented array of ways to shop — coming back to their stores. The right answer will vary by company and trade class, but every retailer will need to consider new functions that their stores can perform. Here are some possibilities:

  • Fresh market. A course already well trodden by many supermarkets, a reduction in space devoted to packaged goods in favor of fresh produce, meat and fish increases points in the store where many consumers want to evaluate and judge items before making a purchase. Along with a growing variety of prepared food that can be eaten on site or taken home, the emphasis on fresh products results in a shopping experience that can’t be duplicated online.
  • Bazaar. A new take on the traditional department store, some retailers are bringing specialists that complement their own offerings into the store. Walgreens includes FedEx pickup and delivery services at many of its locations, and is testing food sections managed by Kroger at several stores. Two high-profile partnerships — Target with Ulta and Kohl’s with Sephora — are currently helping to energize the beauty care business. The marketplace is likely to see additional instances of companies joining forces to feed off the consumer interest and traffic generated by one another.
  • Showroom and service center. When a large percentage of consumer electronics sales started to migrate to Amazon and other online merchants, Best Buy converted its stores into venues where shoppers could experience the latest and greatest in audio, video and computer equipment, receive expert advice on purchases, and access services related to the retailer’s full range of merchandise — everything from cameras and appliances to health and fitness devices to drones.
  • Fulfillment center. While in an omnichannel world, stores may no longer need to serve as neighborhood warehouses, they do have a role to play in processing orders placed digitally for either pickup or delivery. Many chains, particularly supermarkets, are using parts of their retail space, including the conversion of some outlets into so-called dark stores, for fulfillment. Every day shoppers demand more from retailers in terms of service and reliability. Going forward, stores are sure to have a significant role to play in last-mile fulfillment.

These are just a few of myriad permutations that brick-and-mortar stores will undergo as merchants adapt to the realities of an omnichannel world. The mass deployment of a limited number of store formats will be succeeded by a much greater degree of store-by-store customization. This time of transformation in the way brick-and-mortar stores are conceived, designed and operated will result in a richer, more varied shopping experience for consumers.


ECRM_06-01-22


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