Countering the Threats
Rebranding
According to Alliance Boots, the rebranding of the community pharmacy network is about playing to the strengths of both the Alliance Unichem and Boots brands. The work on the stores' interiors is built around the customer journey through the stores.
The rebrand attempts to address the supermarkets' participation in the health and beauty sector, which, Verdict says, 'reduces the consumer's need to make a specific visit to a health and beauty specialist, [thus] cutting pharmacy-related sales and reducing footfall'.
Alliance Boots is taking a cautious approach to the rebrand, trialling the store format and assessing consumer feedback. Verdict's report, however, points out that to maximise its potential, the company 'needs to rebrand the Alliance chain and finish refurbishing its own high street stores at a much faster rate before competitors grab the initiative'.
Updating
According to The Times in August 2008, a former drive-through McDonald's restaurant was taken over by Boots. The firm's aim is that the store will allow customers to drive up to a window, hand in a prescription and pick up the medication from a collection point. If successful in Colchester, Essex, the format could be introduced across the UK.
Improving its retail offer
A high street Boots Health and Beauty store © Biz/ed images
Following the integration of Alliance branches into the Boots portfolio, a programme, due for completion in 2010, began to divide the retail offer into four formats:
- Local Pharmacy - 200 smaller branches plus 900 Alliance stores, pharmacy-focused and located in smaller high streets. They would have a stronger health and beauty offer than most of their rivals. The aim is to build strong relationships with local communities.
- Health and beauty - these are the core Boots stores. They are found in major high street and shopping centre locations. They offer a wide range of health and beauty, and lifestyle products.
- Flagship - these carry the full health and beauty range plus non-core categories, for example, children's clothes and nursery products.
- UK Airports - this is where Boots shows its keen travel focus, featuring holiday categories of products in locations such as Heathrow Terminal 5.
Boots Pharmacy on Kingsway in London © Biz/ed images
The desired effect of the refurbishment programme is to separate the health and beauty departments. These would be given their own identity, with clear segmentation of the two markets. Boots' larger stores will separate the two core departments, with these located on separate floors. In smaller outlets the health and beauty sections will be moved to the back of the store. Management are reviewing each store to best reconfigure its layout. They are utilising their new IT systems to do this. This will lead to considerable variation in their overall offer because of the chain having so many different stores/sizes.
An example of this strategy can be seen in Boots' Oxford Street store in central London. The changes appeared in 2007, with features that may roll out to other stores:
- Ground floor - creating clearer sight lines and an open feel. Locate cosmetics and branded goods at front.
- Health and pharmacy on upper floor to segment the two departments.
- Boots' sub-brands such as 'Origins', are showcased in distinctive fixtures, with oval-shaped display units for premium products.
A spa-based concept is being tried at Boots' branch in Kingston, Surrey:
- Trialling a beauty spa under the brand 'UR Beautiful', it will have its own entrance, separate from the main store. It will carry bespoke products. These features have also been incorporated into top-performing stores and on-line. The idea is to bolster Boots' brand authority with a unique product, targeting aspirational women. The firm envisages another 20 spas across the UK.
Service and range: Boots' key retail proposition
In other ways, the company is investing in marketing to differentiate its offer and build loyalty, through offering a broad range of heath and beauty products and services. The notion of customer service, though, is crucial to this proposition.
- In healthcare: this is the core of Boots' service strength. The firm is trying to reposition Boots as the complete healthcare provider.
- It has recruited more healthcare specialists to offer advice, running combined trials with GP surgeries. It has opened its first GP surgery in Poole and has earmarked another 150 potential sites for more.
- Boots plans to double the number of pharmacies opening to midnight and increase the Measured Dose Service to care homes.
In addition it is trying to stretch its service strengths in healthcare to the beauty market:
- With higher investment in its beauty offer, featuring exclusive brands and own-brands, for example 'Model Me' by Toni and Guy, the continued development of No.7, and its beauty spa trial.
- The company is trying to improve its beauty proposition by recruiting beauty consultants to stand on shop floor and offer advice.
Overall, the strategy is to extend Boots' range beyond the reach of the supermarkets.