September 12, 2016
Chain drug retailers are being challenged to free up additional retail space and to reconfigure their stores to keep pace with competitors’ new brandings and offerings, according to Duane Chudy, president and chief executive officer of TCGRx, a supplier of work-flow solutions and pharmacy automation.
The market, he notes, is constantly driving pharmacy operators to invent new ways of doing business to stay competitive and profitable, and retailers are turning to innovate store designs and fixtures as key components in those efforts.
“We have been designing pharmacies and integrating automation for years,” he says, adding that the Wisconsin-based firm helps pharmacies shrink their square footage without sacrificing service.
James Sundstad, vice president of branded environments at CBX, an agency that helps build brands through innovative store designs and other initiatives, agrees that the blurring of retail channels and the increased competition within the drug store industry and from other trade channels has inspired new concepts in store designs, layouts, and fixtures.
Drug stores, without abandoning their pharmacy and health and wellness images, have evolved into convenience stores in the minds of many customers, whereas other customers are turning to convenience stores for many of their over-the-counter medicines.
Mark Gillham, collaborative store leader at Jackman Reinvents, adds that retailers are spotlighting and showcasing products in a more profound way by adopting and utilizing store designs and fixtures. Jackman Reinvents has worked with such retailers as Duane Reade, Walgreens, Rexall Health and Sobeys Inc. on store design initiatives.
“We help organizations reinvent the customer experience to drive growth and win against competitors,” he explains. “We do this by bringing business and creative strategy together in a collaborative end-to-end process.”
One fixture line that TCGRx recently brought to the pharmacy market is HDStock, it’s high-density cabinets that can reduce a pharmacy’s medication storage footprint by up to 50%, in the process opening up space to implement such functions as patient consultative services and vaccination rooms or expanded retail merchandising areas, all without expanding an existing floor plan. With HDStock—available in six features—the unique layouts and work flows of pharmacies are addressed.
Chudy says that the HDStock system has been designed to be expandable and that the fixtures can be customized with colors and finishes to match the look of an existing pharmacy.
At CBX, the agency works with retailers to provide customers with unique brand experiences through novel layouts, whether that customer is in the store for a “grab-and-go” item or for more of a complete purchase transaction, says Sundstad.
He says that one trend in the design/fixtures arena is that products that were once confined to higher shelves are now placed at lower levels on gondolas to attract the customer and in the process build brand loyalty. He cites the approach that Bartell Drugs has taken to usher in local merchandise—including specialty chocolates, local products and gifts—to some neighborhood stores, where they are displaying the high-end products on attractive end-caps, gondolas, and in-aisle fixtures.
At CBX client Duance Reade, success was achieved several years ago when cosmetic counters and fixtures once nearly exclusive to department/specialty stores were introduced to drug stores. By highlighting the cosmetics section as a uniquely branded area of the store, sales increased dramatically. Duane Reade is also among pharmacy retailers that now depend on lower pharmacy counters as vehicles to help forge stronger bonds between pharmacists and patients.
Changes in store designs and fixtures are also reflected in the increased integration of perishable and nonperishable food in the drug channel. Gillhman says a “big game changer” in this trend is seen at Shoppers Drug Mart as a result of its recent acquisition by Loblaw Cos. New formats at SDM stores have expanded square footage to accommodate fresh/perishable items.
Originally published in Chain Drug Review Magazine
Dustin is a purpose-driven strategy and marketing leader with extensive experience building high-performance teams, driving growth, and creating brand value. In his role at CBX, He is dedicated to helping clients maximize the cultural and commercial impact of their brands.