Change is the new buzzword at Walgreens. In recent months, the drugstore chain has rolled out a flurry of new marketing changes. This included tapping packaged-goods veteran Kim Feil, formerly of Sara Lee, IRI and Kimberly-Clark, as its latest CMO. And, just two weeks ago, the retailer had heads turning when it unveiled its massive, New Year’s Eve sign at One Times Square in New York. At 341 feet above ground, the out-of-home digital display spans three sides of the historic and former Walgreens building, which reopened its doors the same day. Several Walgreens suppliers, including L’Oreal, Johnson & Johnson and Kraft, have also bought display advertisements at the building on street level. While a bit unconventional for a drugstore retailer like Walgreens, Feil says the towering billboard display is just one of many eye-openers the company has in store for consumers in 2009. Nine weeks into the job, Feil took some time out of her busy schedule to discuss everything from private label’s big push to how the retailer is differentiating itself from its competition.
Brandweek: What made Walgreens decide to light up Times Square for the first time?
Kim Feil: The way I see it is, we made a big commitment to come back to one of the busiest neighborhoods in America and put our store right on One Times Square, where we can serve an amazing population that comes through everyday. There are 1.6 million people passing by Times Square everyday . . . It’s a big idea in marketing terms. And it’s one that will have exceptional marketing value from a reach perspective and a brand standpoint.
BW: How do you differentiate Walgreens from other drugstores like CVS and Rite Aid?
KF: The research [shows] that no drug retailer has a clear and distinctive position from the consumer’s perspective. If you talk to the CMOs of other brands, they might argue about that. The fact is, we are all known for being a great pharmacy and for being convenient, but those are not the most distinguishing factors. Those are the cost of entry. We continue to market a lot of our brand value and our convenience, but we will be working even harder on how we can help customers understand the distinction between Walgreens versus the general market of drug retailers. We are not stepping down on our marketing. We are continuing to help our customers know what they can find with us.
BW: What exactly is that distinction?
KF: I visited over 22 stores in five states during the interviewing process for this job. I went there to watch customers talk to employees, to see how the stores might be different in different locations. It was very compelling to see how customers in Texas, Wisconsin and Michigan sort of each approach the stores pretty much for the same core reasons. But then when they get there, say if you’re in Texas, you might see a few more hot weather remedies, but if you go to Wisconsin, you might see a few more cheesehead hats. But [overall], you do get [a] very comparable Walgreens friendly, “care about you” feeling in any store you go to. I personally have a lot of passion around being here and I was so honored to be chosen for this job. I believe that the fundamental caring that our organization has for people is something that will be one of the most distinguishing characteristics in defining who Walgreens is.
BW: A big chunk of your sales, 15 percent according to your latest quarterly earnings, comes from private label. How do you build upon that?
KF: We enjoy a large percentage of our sales through our private brands. I envision there will be more to offer in our private brands. We have a very strong Walgreens over-the-counter brand and we have a lot of private brand names like bioInfusion, which are preferred by many consumers. You will probably see more coming in that area.
BW: After reading about how Google and Procter & Gamble swapped employees, is Walgreens thinking of doing the same? After all, you are just up the street from Kraft.
KF: We are going to be reaching out a lot more to our vendor partners to share insights and learn from them. We’ve been doing quite a few “top-to-tops” with a number of our largest vendors over the last several weeks to share our strategies with them and that has been really exciting for both parties. They share their thoughts about our company and how we can be a better partner to them and we share how much more interested we will be in involving them in our plans. You will see a lot of that kind of sharing, whether it’s literally employees or insights or planning processes, or unique ideas to meet unique customer lifestyles. All of that [swapping] will definitely be going on.
BW: Isn’t that common among retailers and their suppliers anyway?
KF: It is more common with other retailers than it has been with Walgreens. I was a consultant to Walgreens when I was with IRI, so I’ve watched the industry from lots of different angles and now I have this opportunity to work in retail and it’s rounded out a 360-degree view for me. Certain retailers are really good at engaging with vendors, on average they are OK, and we have not quite reached that level yet, but I know we will be going forward.
BW: So, what’s your New Year’s resolution? I’m guessing it has something to do with marketing.
KF: Maybe it does! (Laughs). I want to see us elevate the Walgreens brand to become not just an absolutely trusted corner store in the neighborhood, but to be consumers’ first choice for remedy and relief, including finding their beacon of health and personal wellness at Walgreens.