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November 2006 - Strategy Magazine
Special Report: Brand of the Year

Overall Brand of the Year
We love Shoppers
What's not to love about a store that dares to offer an experience?

by Natalia Williams
page 38

It's okay to envy Shoppers Drug Mart. They've earned it.

Over the past few years, the over 40 year-old brand with more than 925 stores across the country has gone from functional to fabulous. The most noticeable shift: replacing crammed, uninteresting stores with airy, bright, gorgeous spaces punctuated by aisles stocked with merchandise that you could spend hours indulging in. Yes, the last dash of whimsy was intentional. Because what Shoppers has managed to do - and why it gets our nod as the Brand of the Year - is transform picking up a prescription into something verging on reverie - and we suggest, in the process,

helping redefine the Canadian shopping experience.

With the glammed-up

in-store experience has come a deliberate move away from mass marketing.

"Mass marketing is old fashioned, inefficient and expensive," says chairman/CEO Glenn Murphy. "It's more suited to mass retailers. Customers and patients know our brand and frequent our stores, and with 1,000 outlets and close to one million transactions a day, we are our own medium."

Indeed, a Shoppers store is a medium, and it's a strategy that has worked incredibly well, says Chris Lund, CEO of retail strategy consultant Perennial.

"Their big strategy shift is away from mass market to saying: 'Our stores are where we're going to build our brand,'" says Lund. "'We're going to build large, fabulous stores, where people can see the iconography and the façade from blocks away. The stores are going to be triple and sometimes quadruple the size they used to be - and we're going to get really good in a handful of categories,'" he says, in addition to its pharmacy, beauty, private label products and convenient food.

The extreme makeover started in 2001 with the arrival of Murphy to the top spot. Since, not only has the turnaround included bigger and better-designed locations, but better merchandise, a strong push on high-end cosmetics and greater investment into the brand's private label products. (Penetration is "north of 13%," says Murphy, and in late 2004 it was 12%.)

It's an effort, in these times of retail cross-pollination, which has positioned the company to take on the likes of Wal-Mart and, coincidentally, Loblaw, which was Murphy's old stomping grounds for 14 years.

"The other secret to their success is a major strategic transformation away from mass advertising where they were spending a fortune - [to] advertising messaging around things they think are relevant consumer positioning," says Lund. "So they advertise their points program and things going on around Optimum. That's their unique offering in the marketplace and something that is worth celebrating."

In fact, while speaking at Scotia Capital's 10th annual Back to School Conference titled, "Focus on the Consumer" in September, Murphy said the brand will become even more of a niche marketer. "We've pulled out the weekly flyer [which goes to 9.3 million households] and have been testing, using the Optimum card data, to create something brand new," a 24-page booklet with a lifespan of about three weeks based not on timelines, but on the psychology of how people shop. Market research began in Saskatoon, Sask. and London, Ont. this summer. How golden is the Optimum data? The seven-year-old program, which now touts about 7.6 million mainly female active users, was used, for example, to launch the brand's very successful

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