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'A little bit of extra inspiration' goes a long way.

DEERFIELD, Ill. -- Customer-Centric Retailing (CCR) is recasting Walgreens to excite consumers with choices and ideas, according to vice president and chief marketing officer Kim Feil.

Walgreens is still giving consumers what they want, but with "a little bit of extra spirit and a little bit of extra inspiration," Feil said at the Grocery Manufacturers Association executive conference last year.

CCR, a blend of convenience and individualized service, is constantly evolving and being fine-tuned based on consumer research and focus groups as it is rolled out nationally.

Feil said the retailer's culture is transforming from being transaction-focused and product-driven to being aligned with shoppers. With that in mind, Walgreens has overhauled its marketing, merchandising, operations, supply chain and logistics to be ready "from the front to the back" for CCR, she commented.

According to Feil, the initiative comprises five elements:

* A better in-store experience.

* Improving choices without cluttering stores.

* Strengthening consumers' value perception.

* Increasing the effectiveness of promotions.

* Bolstering supplier relations.

Suppliers will get a greater voice in determining the actual items set and will share more customer information and marketing insights with the chain to create the best environment for shoppers and the most profitable mix for themselves and Walgreens.

It took about 1 million people hours to develop CCR, Feil noted. At the store level, it means revamping core categories, changing signage and lowering profiles.

It also means making such key departments as pharmacy, beauty and photo stand out. To that end, visibility has been enhanced so that customers in any section of a CCR store can see the entirety of the interior.

Beauty displays are more identified by brand in order to reduce confusion, health product presentations are more solution-driven, the oral care section devotes more space to best sellers, and dietary supplements have been clearly segmented and moved from the front of the pharmacy to an aisle where the top shelf is easier to reach.

While the chain has reduced its SKU count by 15% in CCR stores, shoppers report that selections have expanded. "This is classic psychology of choice," said Feil. "The more you give people to choose, the less they buy."


But giving multiple facings to top sellers creates a perception of greater choice by simplifying the shopping process, she explained.

CCR, she said, "will translate into more traffic in our stores and larger baskets. We'll be focused on becoming an absolutely preferred, routine destination of choice, top of mind, so consumers don't drive by to go to some other retailer."

The ongoing program has already been rolled out to about 400 stores in Texas.

The culture is being transformed to be more in sync with customers' needs

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Title Annotation:NEWS/RETAILER OF THE YEAR; Walgreen Co.
Date:Jan 11, 2010
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