In November 2012, Walgreens opened its latest innovative store in Chicago’s Bucktown neighborhood. Prior to this, Walgreens opened the first of its upscale format in Chicago’s busy downtown business district known as “The Loop” in January 2012. That store, which boasts 27,350 square feet and features a sushi bar, upscale cosmetics department, self-serve frozen yogurt, a coffee bar – and more – was the company’s first foray into this new format.
For those not familiar with it, the Bucktown store has similar features to the Loop store yet is housed in a 30,000-square-foot historic bank building. In addition to the sushi bar, juice bar, frozen yogurt station, expanded wine and beer selection, and grab-and-go salads and sandwiches, the company has restored elements of the building to preserve its landmark status. The store spans three floors: on the lower level remains the bank’s vault, which is now called “The Vitamin Vault” and features the original safe deposit boxes on one wall with vitamins and supplements on the other wall. An expanded selection of private label foods including Nice! and Good & Delish are also found in this store.
The second floor features the company’s upscale beauty concept known as “Look Boutique”, which offers prestige cosmetic brands in addition to standard cosmetic and personal care brands commonly found in drug stores.
The company is planning to expand this new flagship model known as the “Well Experience” to other markets including Los Angeles and San Francisco, Calif., New York (in the Empire State Building), Boston, Mass., Philadelphia, Pa., and Miami, Fla. Walgreens expects these locations to be complete by early 2014.
The “Well Experience” aims to extend stores beyond the traditional drug store format that also emphasizes fresh food and beauty as well as the company’s private label products. According to Mintel’s The Drug Store Shopper – US, 2013 report, some 68% of drug store shoppers surveyed say that private label brand or store brand drug store products are just as good as brand name products and 63% say buying private label/brands/products at drug stores helps them save money.
Corresponding with the rollout of the new Well Experience stores, Walgreens also launched a new private label line – Ology. The Ology line consists of 24 items including baby and personal care, household care, and paper products. The Ology products are free of chemicals appealing to those looking for natural products at affordable prices. In addition to Ology, the company has several other private label ranges across food, drinks, household and other goods in order to offer a selection of items in many product categories.
What it means
New, innovative stores and expanded private label products will generate interest and traffic to Walgreens stores, which can help Walgreens effectively compete with other drug store retailers as well as other channels such as mass merchandisers, online only retailers and supermarkets. In addition to being satisfied with private label offerings at drug stores, more than half of drug store shoppers surveyed say they like being able to buy food items or groceries when they are shopping in a drug store, according to data in Mintel’s The Drug Store Shopper report. Offering a pleasant and unique shopping experience as well as an expanded selection of grocery and other private label products will resonate well with drug store shoppers, particularly as they tend to shop in-stores more often than online.
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