Walgreens Rolls Out Customer-Centric Retailing

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There was an interesting article in the Chicago Tribune about Walgreens’ effort to improve its in-store experience. The company’s new store format, which it calls “Customer-Centric Retailing,” will be rolled out to more than 2,500 of its 7,000+ locations this year. According to Walgreens CEO Gregory Wasson:

“As we move into the next phase, we’ll continue to build sales, take work out of stores, lower inventory and, most importantly, improve our customers’ overall shopping experience”


Here are some elements of the new store formats:

• Eliminated about 3,500 products from stores to focus on fewer, better-selling items

• Adding more food and wine and expanding beauty aisles and preparing this summer to bolster electronics.

• Lowering the heights of shelves

• Installing bigger and more colorful signs to help shoppers navigate the aisles

Companies should take notice of Walgreens’ store redesign and those of other retailers like Wal-Mart, Michael’s, and Macy’s that are rethinking their in-store experiences. The days of shoving as much inventory as possible onto shelves and hoping that customers find what they want are gone. Companies are realizing that its much more profitable to offer fewer SKUs and make it easier for customers to find what they are looking for.

Not only is it more economical to carry less inventory (Walgreens eliminated $500 million of inventory as part of this effort), but it can also be much better for customers. As I’ve discussed in a previous post, consumers are often more satisfied when they have fewer choices.

And redesigning store layouts to help customers shop is also critical. Addressing these functional areas:

Wayfinding: From walking into the store until you find the right area

Browsing: Comparing multiple products within a category

Studying: Evaluating an individual product or products

Getting Help: Finding answers to questions along the way

Those components deal with selecting products, but you also want to make sure that customers go ahead and buy those items. So it’s also critical that retailers spend time revamping their checkout experiences as well.

The bottom line: Make it easier for customers to buy from you.

by Bruce Temkin

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