The health and beauty retailer is shaping its business for the future – aiming for a more personal touch as it grows in scale.
Staying true to your roots is not necessarily easy when your sector is facing upheaval. But although Boots must respond to the same seismic shifts in consumer habits that are affecting retail as a whole, the pharmacy-led health and beauty chain has a clear strength to play to.
What started out as The Boots Company, providing healthcare for local communities in Nottingham when there wasn’t a National Health Service, now has the ability to step up and help ease the funding pressure on that healthcare system through its established network of 2,500 pharmacies, according to Boots UK president Simon Roberts.
“More than one in 10 patients in England couldn’t get a GP or nurse appointment last year – and waiting times in hospital are under significant pressure,” says Roberts.
“The evolution has to be one towards primary health and community pharmacy taking more of the workload away from doctors and hospitals, and giving a more convenient, more accessible and, I would argue, more efficient delivery of that service.”
Although Roberts says the company’s merger with US giant Walgreens just over a year ago hasn’t had – and shouldn’t have – a significant impact on the way its loyal consumers perceive Boots, the partnership will provide scale to help realise those ambitions.
Boots already offers NHS health and hearing checks, travel advice and vaccinations. It has long provided support for care homes and is expanding its outpatient prescription services through new partnerships with Basildon University Hospital and the Royal Marsden in London. It also has a network of 640 opticians, through which it wants to encourage people to have regular eye health check-ups, which can also help detect health conditions such as diabetes, high blood pressure and high cholesterol.
But although Boots runs an information and advice website in partnership with WebMD in the UK, Walgreens is currently more advanced in digital healthcare. In 2014, it partnered with telehealth provider MDLive to offer a “virtual doctor” service, now available 24/7 to its website users in 25 states. In November 2015, it launched Walgreens Connect, an app that tracks users’ health and ties the results into its existing rewards programme.
Meanwhile, says Roberts, Boots is “developing at pace new digital capabilities to respond to what we know our customers want”.
The latest example, now being trialled in seven stores, is related to beauty products. Developed in less than six months at the company’s digital innovation hub in London, Beautiful You is a digital platform that builds a “personalised beauty cabinet” which responds to what’s important to the user, combining personal attributes, such as skin type or hair colour, with makeup and other preferences.
“We’ll do the same in healthcare, with an app, so if you’re living with a condition like diabetes, for example, we can help support you making great decisions, while you still feel in control,” says Roberts.
He adds that similar innovations could offer increased personalisation for the 15 million Boots Advantage Card holders in the UK.
Walgreens has also provided access to the technology needed for Boots’ personalised photography services, which the UK team has added to, helping photo gifts to become one of the company’s fastest growing areas last Christmas, says Roberts.
“You learn, you share, you further improve, you share back,” he adds.
“We want to make sure we pull together the best ideas that we can stand up, which have relevance across the world rather than just in one market, and then we really pull resources and leadership and experience together.”
You learn, you share, you further improve, you share back
Of course, it is the move to online shopping that is really piling the pressure on all retailers’ digital capabilities – and Boots is working with its American colleagues to assess what “future logistics and supply chain configurations” should look like.
Boots has already built on the strong logistics network behind its pharmacy business, which goes into every UK postcode twice a day, to launch an “order and collect” service. Online orders made before 8pm are delivered into stores for collection the following day, at no cost to the customer.
“We’ve got a lot of small stores where we can’t actually carry the full inventory range,” explains Roberts.
By offering consumers a convenient alternative to relying on the post, this service helped drive Christmas sales, he adds. It’s also a cost-effective solution for the retailer when the pressure on costs is “significant”.
“Online does two things: one, it creates a much higher level of expectation of overall convenience and, two, it means that shops have to be even better,” he continues. “If we think about it as customers, our last and best experience becomes our minimum expectation next time. We have to respond to the dramatic shifts in how people are shopping.”
So alongside investment in digital capabilities, the retailer is improving 500 stores this year.
But “simplifying and modernising” the business has also meant more fundamental reorganisation behind the scenes. It has reduced its field organisation from 32 regions to 12 in the UK and one in the Republic of Ireland, and it’s just announced it is cutting up to 350 assistant manager roles in addition to the reduction of 700 roles announced in June last year, largely in head-office support roles.
We're not panicking into a restructure. We want to anticipate where we need to be and get the business into the right shape for the future
“These changes will undoubtedly be difficult for some of our colleagues. Our priority is to support and work closely with everyone, making sure they are regularly updated throughout the period ahead.
“But interestingly, everyone has got the fact that customers are changing; they got the fact that the business needs to accelerate even more,” Roberts says. “We’re not panicking into a restructure. We want to anticipate two to three years out where we need to be and get the business into the right shape for the future by moving sooner rather than later.”
But Roberts emphasises that it is the investment in people that really contributes to Boots’ success.
“I joined M&S as a Saturday kid and I spent my first few years filling up shelves and sitting on the till – and I think about those times most days now because this is one of the biggest industries for employment in the UK, and the people that look after customers every day in our business in Boots do an amazing, but often an undervalued job,” he says.
“Our job in the way we run Boots is to make really good decisions to support our people to be even better with customers.”
And that matters when it’s your ambition to become the “feel-good specialist” on the high street.
It’s no exaggeration to call Roberts – who was recently appointed chair of the Institute of Customer Service (ICS) – something of a customer service evangelist. And he talks about the importance of having “a commitment to care” where his team are interested in what each customer needs, rather than being driven by process.
If business works differently with the community, then growth is possible
The ICS is one of three external organisations he’s involved in, as he carries through his belief in the importance of partnership within the business to the wider sector. He’s also co-chair of both the enterprise leadership team at Business in the Community and the Future High Streets Forum and sees it as the responsibility of larger businesses to support high street regeneration.
He refers to Colne in Lancashire – a finalist of the Great British High Street competition run by the Future High Streets Forum last year – where derelict buildings have been brought back into use, a local market has been created to bring people in and the town is growing.
“If business works differently with the community, then growth is possible,” he says.
“The health and beauty sector is one of the parts of retail that’s seeing growth and I recognise the fact that it’s not the same in every part of the sector, but I think we have to adapt and change and be agile.
“We always ask ourselves what we can do quicker, what we can do better. I wouldn’t use the word optimistic [about the future of the high street]. But I would say there’s a lot of possibility.”
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