Why Duane Reade Renovated Its Image

Duane Reade this week introduced an exclusive line of food and beverage products dubbed DR Delish. The line currently includes 25 products, such as baked potato crisps and raisin oatmeal cookies. The drugstore chain, which has 256 locations in metropolitan New York, expects the total number of offerings to grow to 100 or more by Christmas. The move is part of Duane Reade’s overall strategy to spruce up its image. The 50-year-old drugstore chain recently debuted an outdoor campaign, via privately held agency DeVito/Verdi, with the tagline: “Your City. Your Drugstore.” To date, Duane Reade has either “completely rebuilt or remodeled” 30 of its 256 locations—to include pre-packaged foods like sandwiches and salads, and more improvements are coming, said acting chief marketing officer Joe Jackman. Although bold, marketing strides like these are contemporizing and keeping the Duane Reade brand top-of-mind among consumers, and so far, the feedback has been positive, Jackman told Brandweek. Excerpts from that conversation are below:Brandweek: What made Duane Reade decide to launch its own private label brand? Where did the insight for the idea come from?Joe Jackman: For the last year and a half, we’ve been doing a lot of research with customers. You might call a lot of it formal research—both quantitative and qualitative—and a lot of it was informal research, in the sense that we reached out to consumers in stores, in some cases asking for things that they were concerned about and wanted to see us offer, and they told us, “We’re looking for healthier products” and “We’re looking for tastier products that we feel are more interesting and present great value.” And so, we took a hard look at the products we have under our own labels and we said, “There is something we can do about that.” We’ve been reaching out to the vendor community and finding there is just a terrific interest in working with us, partly because we serve the needs of New Yorkers on a day to day basis and also, New York is an amazing place to launch new ideas and so, we’ve been busy working on products that satisfy those needs that consumers told us [they’re concerned about], which are healthier, tastier products, and ones that are interesting and offer great value.BW: How did DR Delish test with consumers? Did you test market it in stores before announcing its metropolitan launch?JJ: We had a number of different brands in the past. They could be anything from DR, our private label brand, and some that were under a range of names previously, but which we’ve decided to consolidate under a much more exciting brand called DR Delish. We think the name says it all and so, this is a new brand that we just launched this past Saturday and today, it’s 25 items. By the holidays, it will be many, many more. Our focus was really on snacks and beverages and making them healthier. In some cases, [that included] things like gluten-free, no trans fat, reduced calories, natural ingredients—the areas or things we really focused on in our sampling with various customers and also ones that work inside our own business. There is a whole community of New Yorkers that work within the business. The feedback has been very positive. We did not pre-launch [in test markets.] We believe that New Yorkers/our customers will vote with their pocketbooks. And if we’ve got a winner, we will know whom they are and if we’ve got someone we need to work on a little more, we’ll work on that.BW: How big of a brand do you see this eventually becoming at Duane Reade? Will it grow to be a big chunk of sales?JJ: We are building a private brand. We really wanted to stand out and be known as something that is outstanding by focusing on products in categories you can’t find in other places.BW: How is Duane Reade marketing these products in-store? JJ: We’re putting a lot emphasis on the store itself. One of the wonderful things about Duane Reade is the relationship it has with New Yorkers and the community, just the extent to which all of our 256 stores have New Yorkers in them once a day, twice a day, sometimes, three or four times a day. That’s why we said we needed to make sure the products are in the right places in the store so customers can see them. The signage is not there just to identify [the products], but to celebrate them. The products we’ve just launched on Saturday are all at a special introductory pricing. You’ll find our cookies, which are extraordinary, relative [in quality and taste] to what you’d find in a good, but typical, national brand product. There is a lot of points of difference that customers would value—real cream or butter, more chocolate chips—but they’re priced at $1.99 for a regular-sized package of cookies. That’s a fantastic value. We are calling that out in stores. We are getting creative with some of our displays. We are putting the products on end aisles, all the things you’d expect. We are doing some marketing online and also reaching out to consumer and business media to let everyone know. It’s that combination of things that we’re doing and also, getting our community of Duane Reade employees to taste them as well. We had a whole group of people in last week at a big meeting and there were tons of products out there for them to sample and get excited about, because getting your own people excited within is the best way to create word of mouth.BW: How will the introduction of DR Delish affect sales of branded products? Are retailers’ efforts at becoming more savvy in marketing and developing their own brands forcing branded competitors to up the ante? How so?JJ: The way we think about it is, from a customer standpoint, it is great news. It gives them added choices. If you raise the water level, all boats rise. If there is more excitement on our shelves, more things to talk about, more people in our stores (there are a lot already, anyway), looking at our categories of merchandise, chances are, we’ll have one of those choices that the consumer wants and that’s so much better. We really don’t think of it as an “either” “or” situation. It’s a wonderful, symbiotic relationship between great national branded products, which we’re big [supporters of] and [retailers’] private brands.BW: For the past year or so, Duane Reade’s embarked on a campaign to change its brand image and get consumers to think of it as their neighborhood drugstore. What results have you seen from that effort thus far?JJ: A year and a half or so ago, we set out talking to customers, trying to really understand how we could be better and getting very detailed as to the kinds of improvements we could make. That led us to rethink the store, to think about things like customer service, the products we’re selling, all of these things we started to work on improving, and at a certain point, we realized that we needed to share with New Yorkers the changes that are underway and of course, when you renovate a store, you can’t renovate all of them at once, so we wanted to spread the word. That’s what led us to rethink the image of our business, whether it’s the logo or color scheme, all the way to how we show up on a circular in the store itself, improving the physical environment, and by the end of this year, we’ll have either remodeled or completely rebuilt 30 of our 256 stores. Add to that, getting people to be aware Duane Reade is working hard to make some changes. We had an ad campaign we launched with the tagline, “Your City. Your Drugstore” [this past July], emphasizing the connection we have with New Yorkers and their daily lives. We are part of the fabric of this city. We’ve done all these things to let people know that even if change hasn’t come to the store they are shopping at, there are wondering things going on [and coming].The reaction has been fantastic. In formal feedback on online surveys we do and in qualitative research in focus groups, there is just a really strong connection between New York and New Yorkers and Duane Reade. [As a brand], we are 50 years old. That’s come through very clearly. There is a high level of appreciation in the research we’ve conducted. People are saying, “These are better stores to shop in,” “We like the products that have hit shelves,” and “It’s different and unique,” and “It feels very much uniquely New York.”BW: You’ve expanded the aisles, installed new light fixtures and re-organized the store to make for a more shopper-friendly experience. (Duane Reade now carries yogurt, sandwiches and other breakfast and on-the-go lunch foods, too.) What other changes/improvements do you have for the Duane Reade brand? Is this it?JJ: As we look towards the holidays, in addition to the 25 DR Delish items that we announced on Saturday, there are hundreds more coming for the holidays. There will be DR Delish-branded products. There will be some other brands, some of which are familiar to New Yorkers. Apt. 5 [our cosmetics line, for instance], is a brand we have had for many years. We’ll be changing what’s sold under that brand, but there is also a lot of really exciting stuff coming in early November and also, there will be a continued rollout and refinement of the store model. We’ve had great success with the fresh sandwiches, breakfast yogurts, fresh fruits and salads [we introduced in stores] and we will continue to put that in more stores. As we look to 2010, we’re definitely interested in expanding some of the products that we offer. We’re launching a store at Herald Square in late October, right across from Macy’s, where you’ll find an expanded beauty offering with some brands that you might not otherwise think you’d find in a Duane Reade. You will find some things we have not offered in the past. We are expanding our health offering by putting what we call a Doctor on Premises [in store. Duane Reade has three so far.] That’s a walk-in healthcare facility where there are no appointments, you can just walk in, there’s a doctor on the premises and we’ve expanded our health care [pharmacy] offerings [including recently] relaunching a new line of vitamins.

Brand Marketing

Why Duane Reade Renovated Its Image

Elaine Wong

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Elaine Wong