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Pugh applies customer focus to Walgreens’ front end

BY Jim Frederick

CHICAGO —When he joined Walgreens in January 2009, VP merchandising Bryan Pugh brought a new dynamic to the legendary but troubled drug store giant: a strategic approach to highly targeted, location-specific mass merchandising forged during his tenure at Walmart Stores and Tesco USA.

Pugh succeeded George Riedl as Walgreens’ top merchant last March after Riedl was tapped to head the company’s Power pharmacy innovation program. (Riedl has since left the company.) But by then, the Walmart veteran already was effectively driving a radically new approach to marketing and merchandising at the 108-year-old chain, in close coordination with Chong Bang, the former head of Walgreens’ Customer Centric Retailing initiative.

For a company steeped in a promote-from-within culture and incremental changes at the front of the store, putting outsider Pugh in charge of merchandising was a radical shift.

Pugh came to Walgreens with a clear mission: to shake up a front-end product presentation and sales strategy that was beginning to lose its luster as the chain grappled with an economic crisis, a cautious and increasingly fickle consumer base, outdated merchandising techniques and a front-end inventory glut that was sapping turn rates.

“We need to be smarter with our inventory dollars,” Pugh explained last summer. “There’s not a single retailer…worth their salt if they’re not working on increasing their turns and decreasing their stock days and inventory.”

In line with the ongoing CCR initiative, Pugh helped lead a top-to-bottom rationalization of the entire store mix in an effort to weed out outmoded and slower-turning items, group product categories more intelligently and appeal directly to consumers’ needs according to local market demand.

Using CCR, he told Drug Store News, “the better sellers get more space, and we’ll make decisions around things that don’t need to be in the store. That’s going to help us with our turns, our stock days and our inventory reduction.”

Pugh also realized that, based on his experience at Walmart and Tesco, Walgreens needed to more effectively tap its suppliers’ expertise as it reconfigured every category in the store. The goal, he said, was to “unlock [suppliers’] resources and jointly understand how our customers shop.”

“Trying to leverage their resources and expertise in understanding how the customers shop, and utilize that in the…planograms and adjacencies,” has been a positive, Pugh said. “Every 3-ft. section is worked tediously hard to get the best possible result.”

Based on customer focus groups and other research, Pugh drove a new approach to merchandising that groups the front end of the Walgreens store into four major segments: Signature, Power, Staple and Complement.

Core essentials like OTC medicines and beauty fall into the “Signature” category, where Walgreens aims for “best-in-class” status. The chain also needs to offer a deep selection and be consistently in stock with “Power” category products, such as hair care, and offer a reasonable selection of such staples as household cleaners, paper products and other commodity items for the sake of customer convenience. And Walgreens will continue to provide such “Complementary” products as picture frames, shoelaces and humidifiers, as well as a big selection of seasonal items, in-and-out special buys and “treasure hunt” types of products that lure more customers and spur impulse sales.

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Virginia lawmakers move to block plan for mandated health coverage

BY Jim Frederick

WASHINGTON In an act of defiance against the Obama administration’s plan for healthcare reform, the Virginia legislature this week moved to block a provision in that plan that would mandate that Americans obtain health insurance.

Health reform opponents on Thursday applauded the move, which came Tuesday when the Virginia House of Delegates passed a bill that would make it illegal to require individuals to purchase health insurance. The measure already passed the state Senate and is headed to the desk of Governor Bob McDonnell, who is expected to sign the bill into law.

 

That will make Virginia “the first state to protect its citizens from a federal government mandate to obtain health insurance,” according to a conservative advocacy group called Americans for Prosperity, which has bitterly opposed efforts by Democrats to reform the U.S. health system. The group also claims that a total of 37 states are considering some form of “health care freedom act.”

The White House, for its part, has long proposed some form of mandated coverage for all Americans as a means of holding down insurance costs and ensuring that healthier Americans are also included in insurance pools. Under the Obama administration’s proposal, however, much of the cost of individual coverage could be defrayed or offset by tax cuts or other financial help for individuals who can’t afford the costs of coverage.

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Home health specialist Carex launches online membership program for patients

BY Alaric DeArment

OAKLAND, Calif. A company that makes in-home health products has launched a section on its Web site for elderly people and their caregivers.

Carex Health Brands announced Thursday the launch of Carex Care Connection, at carex.com. The site allows users to share stories and find discounts and giveaways on Carex products, which include products for mobility, bathroom safety, personal care and daily living aids, pain management and others.

“Our team at Carex Health Brands genuinely cares about the welfare of seniors,” Carex VP marketing Nathalie Kim said in a statement. “In addition to our efforts to create the most innovative and quality products in the in-home health category, we want to connect directly with caregivers and the senior community.”

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