Searching For Customers, Walgreens Decides To Try Being A Drug Store

Walgreens (NYSE:WAG) is searching for its place in the retail landscape, and it seems to have settled on health and wellness as its focus, according to the Huffington Post.

The result will be fewer "peripheral" products such as electronics, seasonal items and household goods, and more health-related items in the front of the store, said Graham Atkinson, the chain's chief marketing and customer experience officer. That doesn't mean Walgreens will be abandoning headphones and grocery items—just that there might be one type of cooking oil on the shelf instead of three.

The largest U.S. drug chain is squeezed between Walmart (NYSE:WMT), which is using new small-format stores to move in on Walgreens' traditional turf, and Amazon NASDAQ:AMZN), which is moving in on everyone's turf. The new focus will make over  the front of the stores with pharmacy, vitamins and beauty products along with immunizations and clinics, which Amazon and convenience stores can't do and Walmart seems unlikely to add in its smaller stores.

That all sounds logical and dovetails nicely with the hugely successful, 75-million-member loyalty program that Walgreens has built over the past year. But a logical plan won't stop Walgreens from contradicting itself. The chain has opened flagship stores in 10 big U.S. cities to test new features, some of which include self-serve frozen yogurt, cafes and even sushi bars, along with trained beauty advisers and boutiques in the beauty department. Those aren't exactly aligned with a vitamins-and-immunizations focus.

But then, they also won't be rolled out to all 8,000 stores. Not all stores will be reconfigured with the same one-size-fits-all features, nor will they all be reworked at once, JCPenney-style NYSE:JCP), Atkinson said.

That pragmatism may kill the cookie-cutter, deja-vu feel that has been the standard for U.S. chains for the past few decades—most Walgreens stores today feel like you've been in them before, even if you never have. As a result, customers may not instantly know exactly what aisle to go to, but who knows? They may actually pay attention to what's in the store for a change.

For more:

- See this Huffington Post story

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