Drug chains should offer consumers a 'safe haven'

Chain Drug Review, August 28, 2000 by Wendy Liebmann

It's hard to imagine a time in recent memory when chain drug stores were not an integral and important part of American consumers' shopping vernacular; a place where people of all ages and income levels shopped once or twice a month for a broad range of health and beauty care products and general merchandise, where the pharmacist played an essential role in the good health of the family and the community. However, as we move into the 21st century this is no longer the case.

In the May 1 issue of Chain Drug Review I noted in an article entitled "Relevance of the Chain Drug Store Called into Question" that chain drug stores were significantly at risk. Based on findings from WSL Strategic Retail's biannual' "How America Shops: 2000" study of consumer shopping behaviors and attitudes, it is increasingly evident that consumers today use the chain drug store more and more as their local convenience store -- a place where they fill a prescription, pick up a container of milk or soda and little else.

Why? Because 55% of American women, 18 to 70 years of age, shop a discounter, such as WalMart Stores Inc., Target Corp. or Kmart Corp., once a week for many of the products they used to buy at the drug store. That, in addition to shopping the supermarket, food/drug combination store or supercenter (80%). Is it any surprise then that the drug store has become the quick fill-up place, the 7-Eleven for females?

However, the extraordinary growth and impact of the discount store industry cannot be held solely responsible for putting chain drug stores at risk. Nor can the fact that managed care has driven profits out of the pharmacy. Chain drug retailers have done that to themselves. They find themselves in this precarious position because, in actuality, they gave up their position. They lost their relevance to the American shopper because they did not truly understand their role and impact.

Today most chain drug stores are little more than prescription centers. They may offer a lot more, promote a lot more, but they are in essence just that. Chain drug stores are exactly what they say they are: convenient drug stores, stores that consumers can access easily to get prescription medications. That's it. In the last decade the industry defined itself as such -- or worse, let itself be defined as such. And consumers responded accordingly.

What chain drug retailers have lost sight of is what the drug store really meant to consumers, what it once stood for in their lives. It was never just about medicine and health and advice, or buying a lipstick or a greeting card.

At its heart, the drug store was a safe haven in the community, an environment that welcomed everyone, regardless of age or income level or ethnicity or social standing. A good neighbor that celebrated a birth, helped community children grow up healthy and old people stay well, that provided advice on birth control, makeup for the prom, a graduation thank-you gift for the teacher, a holiday gift for the baby-sifter, a special greeting for grandma. It had a heart and a soul and a personality that discount stores and supermarkets did not. It was approachable as department stores were not. It was accessible as malls were not. It was never cheap, but it was affordable. It was always worth the money.

That is not what the chain drug store is today -- not even close. Today most chain drug retailers have distanced themselves physically and emotionally from their communities. They have set their stores alone in a parking lot on an accessible suburban corner -- but apart from their neighbors and their neighborhoods. They have given up the intimacy and the emotional connection, blaming it all on the cost of labor, falling prescription profits, the need to compete with discounters on price, among other things.

The pharmacist has become less and less accessible. In fact, many drug store shoppers have a more intimate relationship with the person who works at the photofinishing counter than the pharmacist.

Chain drug retailers continue to present the store and the mix in much the same way as they have for the last quarter of a century (perhaps even longer). In fact, I would hazard a guess that this is the only retail format in the United States (with the possible exception of department stores) that has changed so little since themid-1960s. Is it any wonder that such discounters as Wal-Mart are devouring drug stores' core health and beauty aids categories, or that specialty retailers like Bath & Body Works are successfully nibbling away at cosmetics, bath and body products, and fragrances?

Interestingly, this has not been the case in other countries. For instance, Boots the Chemists (the renowned British retailer), while facing extraordinary competition from some of the best supermarkets in the world (and most recently WalMart), continues to develop and test new and compelling formats at an astounding rate. Faced with increasingly lowprice competition in suburban locations (away from Boots core High Street locations), the company is testing everything from a 20,000-square-foot store in Bluewater Mall, Dartford, which offers manicures, makeovers, chiropody and dental services, to a new specialty concept for males, Boots Men, in Bristol and Edinburgh.