Speaking at the recent BRC Annual Conference Alex Gourlay, managing director of Boots, admitted mistakes had been made but that recent changes had overcome these: “We needed to modernise from two to three years ago as our customers wanted old Boots, with its values, to be mixed with new things. We're rediscovering ourselves as a pharmacy-led health and beauty retailer and we've had a good year.”
One mistake was an attempt to take the brand upmarket but this was a flawed strategy, according to Gourlay, as Boots is a mass brand: “Bringing premium products in was a mistake. We'd moved away from the NHS to being a private healthcare shop.”
A key element in addressing this problem was re-focusing the business on its core 20 to 55-year-old female customer base - who were segmented into three main groupings - Betty, Tina and Charlotte. Evidence of the success of this decision came with Boots' Christmas advertising campaign 'Here come the girls' that led to top-line growth.
The company is also re-branding 900 Alliance Boots stores as 'Your Local Boots Pharmacy' with a programme in place to convert 50 per month over the next two years although Gourlay says this could possibly be accelerated.
All the changes the company has made to better serve its customers are closely monitored and measured. Gourlay says this includes using the Boots Advantage Card to survey its 16 million members, using customer research panels, and using various satisfaction scores. In addition, the company receives 25,000 customer responses each week from surveys that measure the level of customer satisfaction with specific aspects of Boots.
Satisfaction is an indicator of the crucial level of engagement that customers have with the organisation and since the recent changes have been implemented Gourlay says the satisfaction level has increased from 47% to 52% . This has driven 1.5% of the like-for-like sales growth achieved in the recent results.
Unlike many other retailers Gourlay says Boots is not at present cutting back on the numbers of people it has in its stores. “On the high street we need to get conversion and in tough times the easiest thing to do is to take people out of the shops. But if you put them back on the shop floor then conversion goes up. It is absolutely at the heart of any business,” he suggests.
The Advantage Card also helps conversion rates because it helps drive customers back into Boots stores. And, according to Gourlay, it has played a significant role within the company in recent years: “It has probably saved the business over the last 10 years. Customers love the card, with women using it as a treat card.”
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