The Observer | Read more
Not just a game changer, but a mood changer.
The historic New York drugstore chain was experiencing low customer satisfaction, an undifferentiated offering and new and formidable competition. On every dimension that mattered to consumers, data revealed these competitors were substantially better. However, they were not New Yorkers. We set out to build the best urban drugstore in America, and landed on a uniquely New York point of view and positioning: “New York Living Made Easy.”
It became clear that competitors like Walgreens and CVS were exceeding Duane Reade’s performance on every dimension that mattered most to consumers, except for two: first, the other retailers were not New Yorkers, which represented a substantial strategic opportunity, and there was strategic white space available in a fuller “daily living” offering.
The reinvention required a bold move: change the game by changing the category. Food, beauty, personal care and expanded convenience categories that catered to the lives of busy New Yorkers provided the strategic white space and opportunity for growth. In partnership with internal and external resources, the management consulting team developed operational and financial models that were foundational to shaping Duane Reade’s new value proposition and customer experience.
While strategy informed which customers to focus on, customer segmentation provided a foundation on which to rebuild the brand. To win, Duane Reade chose to cater to the shopping attitudes and lifestyles of health- and style-conscious New Yorkers looking for convenience, value and a trusted pharmacy – those reflecting the new brand mantra, “New York Living Made Easy.”
Jackman redesigned Duane Reade’s logo and branding, and guided a complete refresh of all communications and packaging design, in partnership with external partner firms. New private brands featuring local landmarks and iconic NY imagery were introduced to reinforce the “Your City. Your Drugstore.” tagline.
Stores were overhauled with new layout and signage and improved merchandise displays and fixtures, and reorganized into “New York Living Made Easy” sections: How I Look, How I Feel and What I Need Now. Notable additions were the food and beverage “Grab and Go” section and a premium-feeling store-within-a-store concept, the Look Boutique, featuring up-market beauty brands and advisors. Overall assortments in many categories were reduced by approximately 10%, resulting in customers crediting Duane Reade with more variety, with sales typically going up 15%.
Jackman found an agency partner that developed a creative platform with a uniquely New York voice. The on-the-ground campaign primarily used outdoor media to take Duane Reade’s “Your City. Your Drugstore.” message to the streets and reframe the brand’s position in the market. Advertising was a powerful lever to ignite brand momentum and generate consumer excitement.
In two years Duane Reade converted or opened 30 reinvented stores, retooled its private brand portfolio and reimagined itself across communications. Front-end sales in these stores grew to 55% of total net sales, and private-brand sales doubled. Duane Reade was acquired for 11x earnings by its rival Walgreens , who replicated aspects of the merchandising and store innovation to catalyze its own reinvention.
We helped Duane Reade to boldly differentiate by reinventing its category. To learn more about the Reinvention model and our work with Duane Reade, please send us a message.