An principal architect of Walgreens’ transformation.
DEERFIELD, Ailing. — Walgreens is constant to rework its retail enterprise, and one of many principal architects of the transformation is senior vice chairman and chief merchandising officer Joe Hartsig.
In recognition of his contribution, the editors of Chain Drug Evaluation have named Hartsig its 2018 Merchant of the Yr.
Hartsig, who joined Walgreens in 2015 and was named to his present publish in April 2017, is constructing on a lifelong familiarity with the retailer. Born in Detroit and educated at Hillsdale School in Michigan, and later Northwestern College’s Kellogg Faculty of Administration in Evanston, Unwell., he got here to know and respect the chain from the client’s perspective. “Our family grew up shopping at Walgreens, as it was always our go-to store for pharmacy services and so many things we needed quickly,” Hartsig says.
“It’s a fascinating time to be here, because we’ve made the transition from a U.S.-focused company to a true global leader as part of Walgreens Boots Alliance [WBA]. There’s definitely a forward-looking view of the many opportunities we have, and the willingness and capability to invest in creating a bigger health and wellness platform. I have a real appreciation for the impact Walgreens is making locally, and also the difference WBA is making around the world as a force for good.”
Hartsig’s earlier enterprise expertise leaves him nicely outfitted to speed up Walgreens’ give attention to extraordinary buyer care in an surroundings with dramatic know-how modifications. His first 20 years of expertise post-business faculty have been in blue chip shopper packaged items corporations such as SC Johnson, Pillsbury and ConAgra, as properly as shopper know-how at Motorola, the place he performed key product management roles in rising shopper wi-fi applied sciences. In these roles, he discovered how one can perceive unmet shopper wants and construct model methods to develop the various companies that he managed. In 2009, he had a chance to work for Walmart on the Sam’s Membership enterprise as a divisional merchandise supervisor after which for a number of years as a basic merchandise supervisor. He moved again to Chicago, the place his household was raised and joined Essendant, a Fortune 50 wholesaler of enterprise and e-commerce options to giant retailers and workplace independents, as chief merchandising and advertising officer.
After two years of serving to reposition and rebrand Essendant, he had a chance to get again into shopper retail by becoming a member of Walgreens, which simply occurred to be situated throughout the road. His first task at Walgreens was senior vice chairman of selling and e-commerce, the place he led class and model advertising as nicely as loyalty and e-commerce. In that position, he was capable of strengthen and increase the Stability Rewards loyalty program, create a advertising platform for the very profitable Pink Nostril Day marketing campaign that has continued to flourish, and launch “Whatever Makes You Feel Beautiful,” which supported the massive enlargement of magnificence at Walgreens. At the moment, he additionally orchestrated the concentrate on Walgreens.com by consolidating the various totally different web sites — drugstore.com, magnificence.com and skinstore.com — that Walgreens had earlier acquired. Walgreens had created very robust digital capabilities within the pharmacy and photograph areas, however wanted to get far more targeted on constructing a retail product providing on-line and omnichannel capabilities.
He moved over to steer the merchandising group a yr later, aligning retailer merchandising with each regional and on-line merchandising for the primary time on the firm, to create extra omnichannel synergies. Six months later, within the spring of 2017, Hartsig was named chief merchandising officer and took on further obligations over merchandising planning and the Ceremony Help integration efforts for merchandising and advertising.
Since that point, Hartsig has been busy serving to drive the broader transformation set out by Alex Gourlay, co-chief working officer of WBA, who oversees Walgreens and Boots retail. Earlier than this might actually occur, nevertheless, one of many key issues that wanted to occur was to “step back and strengthen our foundation,” Hartsig says. At the moment, Walgreens had been operating too many promotions, lots of which weren’t efficient. These promotions additionally generated too many advert tags in shops that not solely created a poor purchasing expertise, but in addition prompted staff members in-store to spend an excessive amount of effort and time to hold them every week. This was worthwhile time that might be higher spent caring for patrons. Engagement with suppliers was overly tactical versus strategic, and margin contribution was eroding annually. Moreover, SKUs have been rising at a continuing price annually, leading to elevated stock ranges. Lastly, Walgreens had a strong digital platform with a extremely rated cellular app, however had not stored tempo on retail omnichannel capabilities with a Net Decide-Up providing that had launched years earlier than, however had not gotten traction with clients.
During the last yr, Hartsig and his staff labored intently with different cross-functional teams to instill extra working self-discipline and repair the inspiration. A serious effort was spent on evaluating and optimizing promotions to scale back the variety of tags at shelf and shifting to extra category-wide efforts with stronger advertising. A brand new joint enterprise planning course of was established with its most strategic suppliers, permitting Walgreens to have a deeper and long-range focus. “This was absolutely pivotal,” Hartsig says, “as we were not engaged well enough upstream nor planning far enough ahead strategically with suppliers that could help us create meaningful differentiation and value for customers.”
Assortment planning was additionally improved, with a brand new and improved class line evaluation course of leveraged from Boots and tailor-made for Walgreens. SKU budgets have been created by class, and in addition by format, so class managers needed to assume more durable about what clients wanted and the place to put it by format sort. The brand new class line evaluation course of introduced a lot larger knowledge analytics and perception, as properly as monetary evaluation to the evaluation, which helped scale back SKU counts in much less strategic classes or lower-volume shops. These shops, in any other case recognized as “simplified stores,” have a decrease quantity of visitors and didn’t want the complete vary of assortment that was wanted in, say, “corners” shops that may be in giant suburban cities, for instance, says Hartsig.
The final key space for strengthening the inspiration in 2018 was constructing a stronger omnichannel strategy. With a singular concentrate on Walgreens.com, the workforce targeted on enhancing the buying expertise on-line and by way of cellular. This included a tighter assortment that aligned with retailer gadgets; improved search capabilities; simpler navigation on the location; and the enlargement of digital coupons to be used on-line or in-store. The Net Decide-Up program was cancelled, and a brand new Ship to Retailer program was launched that provided free delivery of things to any retailer within the nation. “Our customers love this new program, given the convenient locations we have along their driving routes. Adoption has been really strong and continues to grow,” notes Hartsig.
With a stronger working self-discipline, the workforce has now targeted on constructing upon this basis. It’s pivoted to drive extra balanced progress, whereas planting seeds for the broader transformation journey that Walgreens is present process throughout pharmacy, retail and omnichannel alike. Within the magnificence space, the corporate continues to speed up its funding in constructing a stronger connection to present and new clients. Part two of a multiyr, multistage plan was efficiently launched in 2018 with new cosmetics fixtures in-store, enlargement of the best-selling No7 magnificence line and the introduction of latest manufacturers like NYX. New magnificence consultants have been employed and educated, and the Stability Rewards Magnificence Fanatic program was expanded.
A concentrate on elevating the well being and wellness division can also be properly underneath means, with departments being overhauled to make it simpler to buy and “find relief fast,” says Hartsig. “Our teams have spent considerable time researching customer needs, and they’ve told us it was hard to shop some of these critical areas like cough and cold, or allergy. Customers are time pressed, and need to get in and out of the store quickly with solutions that can make them feel better. We implemented a strategy to make it easier to see the departments by reducing shelf heights, installing signage for better category navigation, and reducing assortment to make it easier to find what they need faster.”
Walgreens is taking the subsequent step in its transformation, as seen within the newly reworked Deerfield retailer. Right here the groups are urgent ahead with a brand new design as a part of its give attention to creating a contemporary retail providing that builds on Walgreens’ handy places and differentiates its shops. It’s a dramatic retailer change, beginning with a broad array of latest well being providers that embrace new optical and listening to facilities, diagnostic lab testing providers by means of Lab Corp, and an expanded pharmacy with new capabilities such as Categorical Decide Up. Within the entrance finish, well being and wonder are joined up collectively to capitalize on the convergence of areas like skincare, solar care and private care alongside an expanded array of well being care options. Walgreens has launched a 3rd part of its magnificence program right here as properly, Hartsig claims, with an expanded concentrate on dermatological options and a lot better alignment of mass and status skincare merchandised collectively.
Comfort enhancements are additionally a key a part of the brand new Deerfield retailer, says Hartsig. A brand new checkout space was designed for higher line administration as nicely as having extra of the most effective gadgets merchandised inside arm’s attain. Moreover, Fed Ex providers have been expanded to incorporate packaging options, and a Dash Categorical retailer has been efficiently launched, giving clients entry to digital applied sciences and cellular options.