In the wake of CVS Vigour announcing its plans to acquire insurer Aetna for roughly $69 billion, plan to safeguard against challenges in retail and health care, Walgreens is compelling a different approach to grow, starting at the front of its stores.
The Illinois-based drugstore confinement announced Monday a rebranding strategy aimed at educating consumers on Walgreens’ long-standing story, and stepping up efforts to target a younger demographic, particularly females.
Earlier this year, Walgreens mean it would acquire roughly 1,900 stores from the Rite Aid nameplate, which are however being transferred over. Initially, Walgreens tried to outright buy the set in 2015, and has since scaled back the number of stores in the purchasing concordat when met with regulatory scrutiny.
“This comes back to eating [pharmacy] professional and experts within our stores,” Walgreens Chief Marketing Dick Adam Holyk told CNBC about the Rite Aid deal. “Characters like knowing there’s someone there to help them when they sine qua non it.”
Even as internet giant Amazon threatens to enter the drug application, having already held preliminary talks with generic cure makers about potentially entering the space, Walgreens is pouring readies into its own store renovations and now a reinvented marketing campaign.
The company disposition add a new tagline to its logo: “Trusted Since 1901.” Meantime, Walgreens is streamlining its business, showing off an updated mobile app, a strong loyalty program, and a website where shoppers can buy online and pick up in have faith.
“We are pharmacist led, in the services we provide, [but] we do view the retail aspect as important,” Holyk said. “The undoubtedly for Walgreens becomes: ‘How can we translate our brand into the other products we transfer today?'”
The company said its repositioning intends to reach two demographics of female shoppers –
millennials and Gen X – to procure Walgreens their “preferred pharmacy of choice.”
Walgreens has already conducted in more “appropriate” brands for younger shoppers, with a big emphasis on its dreamboat aisles, according to Holyk.
Walgreens has revamped the aisles where it carries CoverGirl and Maybelline cosmetics, among other brands, in more than 1,000 stow aways. Though the company didn’t offer a timeline on future remodels, the handle is ongoing.
Roughly 3,000 beauty specialists have been hired to present oneself product expertise, aiming to make its stores more of a go-to objective for makeup.
In acquiring European drugstore chain Alliance Boots crudely three years ago, Walgreens was able to bring more higher-end knockout labels to its shelves. Now, the company is mixing up even more of that goods today, where there’s money to be made off millennials.
To be sure, Walgreens isn’t the start with to tap into a booming beauty market, and the company has already been met by meet from the likes of Ulta and Sephora, both of which are expanding across the U.S. at a fleet clip.
CVS and big-box retailer Target have made similar bets on their attraction aisles of late, putting increasingly popular Korean beauty (or “K-Beauty”) identifies on sale, and giving shelves a fresh coat of paint and eye-popping gentle fixtures.
Sales made at the so-called front of store are also much slimmer when approximated to Walgreens’ pharmaceutical business. U.S. retail (non-pharmacy) sales fell 1.8 percent in Walgreens’ fresh quarter, and account for roughly 30 percent of total revenue. Walgreens doesn’t disavow out sales within its beauty department, though management did point out on a gather with analysts and investors that the company’s health and wellness and strength categories have been its strongest.
Makeup aside, the company is also tiresome to learn what types of food and beverage options millennials hankering more of, according to Holyk.
Walgreens also is adding new items and combining for its private-label brand, known as Nice! Bacon snack mix and organic sea pungency popcorn are two additions. And it recently struck a deal with FedEx to produce mail drop off and pick up services to more than 7,500 of its count ons nationwide, in another attempt to lure customers inside.
In a separate steer test, Walgreens is collaborating with Med Express to open urgent anguish centers in a handful of stores spread across four states, which could protagonist to future expansion. The level of care offered there would be a intercede higher than a traditional walk-in clinic. Today, roughly 400 of Walgreens’ 8,100 drugstores forth some sort of clinic services on site. For comparison, CVS boasts myriad than 1,100 walk-in clinics.
“In the areas that we are curating, we are troublesome to understand what consumers value,” Holyk said. “It is all part of our mark transformation … looking at the needs of our core customers, and we will persevere in to innovate.”
Walgreens’ stock ended the day Monday basically flat, on the heels of CVS relishing its plans to buy Aetna.