Retail strategy score 25/25
Joe Tarragano, director, Transform
Boots has a number of enviable assets. First, it is a brand imbued with a deep, long-standing sense of trust from its customers. Secondly, its thousands of high-traffic stores with loyal repeat visitors give it a multichannel platform that few can rival. And thirdly its Advantage Card enables phenomenal customer insight and personalised engagement. Yet despite all of these positives, Boots has not fully exploited the omnichannel potential of its business.
It has an ambitious strategy focused on substantial international expansion, consolidation of its optician brands, its extensive wholesale business and establishing a global leadership position for its own brand products – Number 7 in particular. Additionally it has of course been concentrating on first the Alliance deal and now Walgreens. Perhaps this expansive set of business challenges, combined with a focus on product leadership, where it has demonstrated that it does have a capacity for continuous innovation, plus the need for operational excellence across such a complex business has led it to under-value customer intimacy.
But perhaps its very strength – being a pharmacy-led health and beauty retailer – has resulted in the lack of a clear winning strategy. While initiatives such as WebMD have been very successful and Boots has created a strong knowledge resource, boots.com is a single digit percentage of sales, not delivering the hundreds of millions of pounds to be expected. This raises the question: “Does Boots have a clear vision of what it wants its multichannel offering to be? Just who is the customer, what do they value and how can Boots have a laser like focus on that? Having an over-arching customer experience framework underpinned by a clear vision and set of principles is key for building success in an environment where Boots is competing against specialists such as Lloyds and Chemist Direct as well as Superdrug and the grocers. Defining how being pharmacy-led benefits the health and beauty customer and what missions and journeys are well served by that positioning is key.
In the online proposition there is an extensive array of delivery options but this includes an outdated paid for click & collect model, the integration of Advantage Points is confusing and the home page carousel of radically different promotions all suggest that Boots doesn’t lack for ideas but is instead struggling to simplify and major on those that deliver real customer impact. It’s also clear that Boots is hampered by its technology platform and cannot demonstrate the same innovative behaviours and pace that we see elsewhere in its business.
But there are positive signs: Boots’ online business is growing at healthy double digits, it has now launched its own app and it has innovated around fulfilment – its order by 2pm, pick up by 2pm next day is a good sign of what it’s operationally capable of.
In its brand, operations, data and estate, Boots has all the characteristics required to become a supremely successful omnichannel retailer with a set of assets and competences that many other retailers would covet. By sharpening its strategic focus and identifying how to combine its role as trusted advisor and knowledge service through WebMD, its strengths in pharmacy and its potential as a powerhouse health and beauty retailer it has the potential to embrace the opportunities afforded by omnichannel retailing. If it can define that strategy and framework so that decisions can be executed coherently and consistently for the customer, it will have an advantage in more ways than one.
Scoring
The simple scoring from Transform is based on whether or not five services are offered by the retailer in the UK with a score of 0 for no and 5 for yes. On this basis, Boots scores 25/25.
Collection in-store: Yes
Mobile app: Yes
Mobile web: Yes
iPad app: Yes
In-store tech: Yes
