His growth as the leader of Shoppers is reflected in its stellar results.
TORONTO — Jeff Leger began his career as a pharmacist, and what he learned then very much informs what he does now as president of Shoppers Drug Mart (Shoppers).
“Pharmacy, other than the technical component, is really about customer service,” he says. “It’s about connecting with people and not just with the prescriptions — it’s with everything else. You learn that quickly in situations where people are not feeling very well and not in the best of circumstances. So you develop some resilience and some compassion to try to keep people calm and help them through their problems.”
The sharing of sensitive information by patients makes pharmacies unique, he adds. “They’re looking for help to deal with health problems that range from relatively trivial to really important with big impacts on their lives. So pharmacy is a template for all of retailing. You do a lot of listening, and I think that has served me really well — helping me grow as a leader. I’m probably predisposed to that naturally, but that early start of listening to people in the pharmacy and not talking all the time has been very, very helpful.”
Leger’s growth as a leader in his two years at the helm of Shoppers is reflected in its stellar results in both the front-end business and the pharmacy sector. In the beauty arena, the retailer has the top market share in every category in Canada. At the same time, the chain continues to broaden its health care services in areas ranging from medical cannabis to employer coaching. And all the while it’s making great strides on the e-commerce front. For all these accomplishments Leger has been recognized as Chain Drug Review’s 2019 Retailer of the Year.
It’s unusual for a North American drug chain to generate less in sales from prescriptions than the front end, but Shoppers does just that with more than half of its revenue coming from outside the pharmacy, largely from three areas: beauty, over-the-counter drugs and food.
Shoppers has elevated the beauty shopping experience with its 435-plus Beauty Boutiques, which carry prestige brands along with mass cosmetics, derm products and fragrances. But all of the chain’s 1,330-plus stores sell beauty “in some way, shape or form” anchored around beauty advisors. And they’ve gained credibility through personal service and unbiased recommendations. “So beauty is a huge part of our front-shop business, and there’s a lot of innovation, a lot of work there to stay relevant to changing consumer behavior,” Leger comments. “Beauty customers are finding more and more inspiration from social media and influencers, which leads to the importance of marrying of e-commerce and brick-and-mortar.”
The retailer has taken beauty even further with the opening of two Beauty Clinics in Ontario that provide medical aesthetic services (cosmetic derm) from nurse practitioners. These include PRP, essentially the plasma microneedling microdermabrasion process, along with advanced chemical treatments, and laser and injection services.
While the clinics are still relatively new, they have been very well received, Leger says. “They’re essentially proof of concepts. We were interested in whether our brand would resonate in this space with consumers, and the answer is yes. They trust us in this area.” Customers especially like being able to earn PC Optimum points at the clinic, he adds.
Shoppers’ success across the beauty category puts it ahead of every other retailer in Canada, including Sephora, and leaves it unfazed by the planned entry of Ulta Beauty Inc. “They’re a very good retailer,” Leger says. “But we’ve faced really good retailers before.”
In the O-T-C arena the chain continues to see market share gains, even in heavily promoted categories. Leger attributes that to the stores’ convenient locations and hours. “That continues to be crucial,” he comments.
While Shoppers has always had a meaningful grocery business, since being acquired by Loblaw Cos. it has been able to expand its fresh food offering, “and customers love it,” he says. Nearly 120 stores now have fresh food, including meat, fresh vegetables and meal kits, meaning “you can eat now or eat later.” About 35% of the transactions in those stores have fresh food, “so it’s actually resonating really well when you have the right location, which is often urban,” Leger notes.
Looking at alternative channels, the chain is piloting delivery of Web orders with Instacart — mostly in greater Toronto — and the results have been positive.
“We’re in this interesting world,” Leger comments. “You have this ability to get really convenient access to things, which is really great from an individual and a family perspective. Retailing is shifting quickly. So we’re testing a lot of these initiatives, trying to figure it all out.”
On the pharmacy front, the retailer takes advantage of the profession’s expanded scope of practice in Canada, especially in certain provinces. “We’re encouraging our pharmacist owners and their staffs to capitalize on that,” says Leger. Within Canada’s community pharmacy channel, for example, Shoppers delivers close to 50% of all flu shots, which is more than double its market share. “So our positioning resonates with Canadians. If you’re looking for prevention, if you’re looking for prescriptions, if you’re looking for O-T-C solutions, Shoppers is a destination along with Loblaw’s grocery store pharmacies.”
In its drive to enhance care, the retailer has also launched employer-targeted health coaching. “We’re always interested in trying to find ways to add value, to either beneficiaries of certain insurance plans or to employee groups, and health coaching is a revenue opportunity for us,” Leger says. “It deepens our relationship with patients, and helps employers to tackle some of their health care issues.
“It’s starting to build a nice business that we’re pretty excited about and it fits nicely within our broad health and wellness strategy. We’re really working hard to be in health care outside of just the pharmacy. We’d like to work around prevention and acute and chronic care. That means including dietitians in the work that we do, and having medical clinics. How do you make access to care easier and really live up to our purpose as a corporation, which is to help Canadians live life well? There’s a whole lot of potential in a broader health strategy that we’re just scratching the surface on, and we’re very excited about it.”
Looking back on the merger with Loblaw, Leger says the chains’ Optimum and PC Plus loyalty programs were strong in their own right. “But the combination has been really amazing.” And with Loblaw’s PC financial services division, frequent shopper points can be earned on the PC MasterCard for redemption on multiple products, programs and services.
Overall, combining the largest drug chain in the country with a national grocery chain proved to be “an amazing fit in terms of being able to help people from a health perspective and then adding the nutrition side. It’s very powerful. There are lots of great synergies. It’s been a spectacular transaction — from a culture perspective and performance-wise.”
For e-commerce, both Shoppers and Loblaw are served by the latter’s digital group, which handles platforms including PC Express for ordering online for in-store pickup (click and collect) and home delivery.
Shoppers’ first chainwide foray into e-commerce has been with beauty, and the Instacart pilot should reveal whether it will work for other categories. Based on online beauty sales — which have been doubling every year — the potential is great. Likewise an imminent ship-to-store service will be highly appealing to Canadians — 90% of whom live within 10 minutes of one of Loblaw’s stores.
Leger says it’s difficult to foresee the ultimate balance between online and brick-and-mortar sales. While Shoppers’ e-commerce percentage is relatively low, he says, “we have a good proposition for beauty, and we also have a very good proposition from a grocery store perspective, and we’ll be ready for both. At the same time we think you need to continue to elevate your in-store experience, and we work really hard on that. In terms of customers’ in-store experience, we have industry-leading scores. Whether that’s because of the beauty offerings at the center of store, or fresh food, or the front-end experience or pharmacy, we can’t say, but they’re all always top of mind for us. We have to be differentiated.”