To get customers shopping and buying again, many well known chain stores are going back to basics during slow economic times. Reducing prices, cutting costs, and revamping stores for better shopping experiences are just a few of the ways some retailers are enticing people back into their stores.
One such drug store retailer, Walgreens, is taking the lead in reworking merchandising and cutting costs.
Walgreen Drug Stores
The Walgreen’s web site states that it has 7,040 stores across the U.S. In the past ten years, the drug store chain has grown from 3,000 stores and has become the largest drugstore chain in both store count and sales.
The web site boasts that “Today, more than fifty percent of the U.S. population lives within two miles of a Walgreens and close to seventy-five percent lives within five miles.”
According to a recent article in The Wall Street Journal (by Amy Merrick and Kelly Nolan, September 30, 2009), the chain has taken the past year to redo their stores by lowering the height of its shelves so that the aisles look brighter and to make the stores appear less cramped.
Some stores have also decreased the number of items offered by 30%. Many stores have dropped from 22,000 items to 18,000 items. The chain is also customizing product offerings according to the geographic area a store is located.
For example, The Wall Street article mentioned that in certain Chicago stores, Walgreens is increasing its grocery lines when those stores are located in areas with a grocery store over 1.5 miles away.
Meeting Consumer Needs
Consumer spending remains down. They are buying staples and not impulse items. In response to those needs, Walgreens is cutting back on impulse buy items and focusing on customer needs.
With as many price conscious consumers as there are today, private label products which are typically priced lower than the name brands, have also taken on a more viable role in Walgreens’ merchandising.
Even the big box retailers seem to be following the same path when it comes to inventory. Walk in to retailers such as Macy’s, Dillards, or Home Depot and consumers will face seemingly reduced inventory selections and quantities.
Walgreens' Success
In retailing, merchandising and shelve location are kings. In most cases, manufacturers compete for the best spot on the shelf. With Walgreens revamping, it proves the company knows its customer base and is making the best inventory selection decisions based on solid customer-based research.
With 2009 sales at $63.3 billion, the chain is doing something right. Better merchandising, targeted product lines, and of course, cutting prices all helps to spur success in such slow times.
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