From WAGs to riches: Duane Reade’s reinvention efforts pay off
NEW YORK —As any New Yorker will tell you, Duane Reade is as much a part of the city’s fabric as the sea of yellow taxicabs whizzing about town. What New Yorkers also will tell you is that it isn’t the Duane Reade they knew just a few years ago; it’s better. Much better.
The turnaround efforts, led by chairman and CEO John Lederer and his team, have not only made New Yorkers smile, but they also have transformed the 257-store chain into an attractive buy for giant rival Walgreens and worthy of a hefty $1.08 billion price tag.
Upon entering a Duane Reade today, it’s easy to see the new changes—wider aisles, contemporary decor and a new logo, to name a few—but there’s no doubt that its reinvention runs much deeper.
For Walgreens, the attraction isn’t just the real estate and the expansion into the complex New York metro market—Walgreens currently has 70 stores in this market—but Duane Reade’s initiatives also correspond to Walgreens’ Customer Centric Retailing initiative to reinvent the shopping experience.
“Walgreens also is acquiring Duane Reade’s expertise with the new store design and loyalty programs to complement a multiplicity of initiatives under way at Walgreens now,” Deutsche Bank analyst Bill Dreher stated.
“We researched a number of New Yorkers in order to find out what they wanted from Duane Reade, what they liked and did not like, and what they are looking for in drug stores in general,” Lederer, who took the helm in April 2008 after serving as president of Canada’s Loblaw, told Drug Store News in a recent interview. “From that, we came up with this mantra: ‘Duane Reade equals New York living made easy.’”
The customer research would then serve as the underpinnings for the store enhancements and help give rise to the eventual launch of its exclusive DR Delish brand, revamped loyalty card program and store-within-a-store prestige beauty concept dubbed “Look Boutique.”
Meanwhile, the efforts on the back end in pharmacy, spearheaded by Frank Scorpiniti, SVP pharmacy operations, and his team, have resulted in a cost reduction for the company, better in-stocks for stores and less wait time for pharmacy customers.
While the work of Lederer and his management team has catapulted the chain into an attractive acquisition target and changed the way many New Yorkers view the retailer, Lederer remains humble.
“It has reaffirmed the notion that…business is 1% strategy and 99% execution. When you inspire and motivate your associates, and tell them where you are going and you support them to get there, then retailing becomes a lot easier. This experience has taught that business retailing is not complex. The complexity is in executing flawlessly day in and day out for your customers,” Lederer said.
“Most importantly, it is the store talent, the operational talent, who ultimately are the reflection in the mirror of the whole initiative process to our consumers each and every day,” Lederer said. “It was a real team effort.”