Redesign places Rx front and center

DSN Retailing Today, Jan 24, 2005 by James Frederick

Despite more than a decade of relentless attacks from Wal-Mart, Walgreens, Target and mail-order pharmacy, Kmart has doggedly hung onto its spot as one of the nation's largest pharmacy and health care retailers. Kmart is banking on its 1,150-plus in-store pharmacies to help promote its own return to health.

The role of pharmacy in the restoration can't be overestimated. In the face of withering competition for customers--and for the pharmacists to staff stores--Kmart shed more than 500 stores with pharmacies over the past several years and saw the departure of two top pharmacy managers, Larry Hruska and Ron Chomiuk. Through that painful process, however, the chain maintained a commitment to the department with an increasing array of patient-care initiatives, a new pharmacy design, workplace upgrades and the rollout of a more powerful and fully networked computer system that allowed its pharmacists to access patient records from any store.

Just how the Sears acquisition will play out on the pharmacy side of Kmart's business remains unclear, but if the Sears format ever expands to include pharmacies, the expertise Kmart's pharmacy managers have developed over the past two decades in disease management, automation, pharmacy workflow and patient service will be a powerful asset. At this point, said Kmart spokesman Stephen Pagnani, "It's way too early to speculate about the pharmacy business" for Sears.

Over the past year, Kmart Pharmacy has made big strides with its successful introduction of disease-management initiatives, particularly in diabetes care. By the end of 2004, the chain had capped a massive effort to train and certify all 2,400 of its pharmacists in diabetes management and related product categories. Pharmacists also gained additional training last year in how to boost sales and counsel patients in nutritional supplements.

Along those lines, Kmart's divisional vice president of pharmacy, Mark Doerr, said the chain had built "a suite of [12-hour] certification programs" in diabetes and vitamin-based preventive therapy.

Evidence of the perceived importance of pharmacy to Kmart's future success can be seen in the new store format, which repositions the pharmacy department to near the entrance. The new location is aimed at driving sales in some of the highest-margin categories, like generic drugs, vitamins and other drug store-related categories including greeting cards and cosmetics. But it's also a way to better leverage the role of some of the most highly paid and trained professionals in the store--Kmart's 2,400 staff pharmacists.

The new store prototype, which debuted last fall in White Plains, N.Y., among other markets, makes it easier to showcase both the pharmacy and the product categories the pharmacy anchors. "The new prototype does allow you to show overall assortment and the different categories that we offer right when customers walk in, instead of weaving around on a racetrack to find those departments," said Peter Whitsett, vp and gmm for food drug, pharmacy, and hardlines.