Duane Reade Ushers in New Retail Era

The debut of the new Duane Reade at 40 Wall Street in New York City marks a dramatic change for the look of America’s drugstores.

With its grand opening Wednesday, Walgreen Co., which owns Duane Reade, showed not only some bold moves that could be rolled out to more stores, but also started more prominently sprinkling the Walgreens name into the New York market. “We are taking the best of Walgreens and the best of Duane Reade and bringing them together,” said Joe Magnacca, president of Duane Reade and president of daily living products and solutions for Walgreens. He showed the store off like a proud father, while also commending the entire team behind it. With Duane Reade’s major improvements on the drugstore model comes hope other retailers will create distinct store formats.

The opening of the 22,000- square-foot store provides proof drug chains are getting hipper and more relevant. Instead of every chain looking the same on every corner, Duane Reade is making its own mark. It is reminiscent of the early 1980s when it seemed drugstore retailers were unleashing new prototypes weekly. During those years, there were many more chains such as Gray, Revco and Eckerd and each brought something unique to the industry. Each chain tried different twists to lure shoppers. Some of those touches are around today including expanded food departments; others weren’t great fits such as hearing centers. Duane Reade isn’t the only chain with fresh looks now — Navarro is opening its first new store in five years with updated departments, Lewis Drugs has a new prototype and Walgreens has its own newer designs it is rolling out. CVS is expected to keep its position as a leader in improving its store ambience, too.

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This new Duane Reade store will be a launching pad for ideas for use in both Duane Reade and Walgreens. Some touches might not work. A handful will only click in specific stores. For example, on-site manicures wouldn’t be busy enough in some markets to warrant technicians. One concept to watch will be the Virtual Assistant from Lawrence, a Tensator Group company. This is the next generation in digital signage and the assistant provides Duane Reade shoppers with a holographic image that is not only cool but provides brand and promotion messaging. The electronic greeter links into beauty because “she” tells how to get a virtual makeover. The virtual makeover is called “Find Your Look,” and it is a computer that takes the customers’ photo, lets them scan in makeup items, then retouches the photo to show how the client how she would look in those products. More and more of these virtual makeover machines are being tested in drugstores and discount stores.

The virtual assistant at the front door is the first of its kind for the drugstore industry. With self-service stores having problems providing help to shoppers, signage such as this could alleviate some of the obstacles. Lawrence also installed an in-store queue merchandising system that transforms unused space in a checkout line into valuable retail space enabling Duane Reade to boost impulse sales among those in the line by 400 percent.

Another use of technology could alleviate another self-service issue — testing fragrances. This store has an automatic fragrance sampler where shoppers can put their wrists under the fixture and try more than 40 different scents. This all adds to the assortment of salon services offered such as blowouts and manicures. There is also a unique tool area where shoppers can actually experiment with beauty items such as straighteners, a tactic that has been very successful at Ulta.

Although the consumer press jumped all over aspects of the store such as the sushi chef, the beauty upgrades are just as newsworthy. The industry has responded with beauty brands not typically found such as Gosh Cosmetics, Blow and Butter London being sold at Duane Reade. While Estée Lauder is still not available at mass, the industry is doing a good job of finding brands that do bring a prestige level of merchandise.

If drugstores are going to survive and thrive, more will have to start differentiating from the pack. Duane Reade and Walgreens has made a big move with this store.

People, Place and Things

A few words with Duane Reade president Joe Magnacca about what his team hopes to achieve with the new 40 Wall Street store.

WWDBeautyNews: Tell us about this space.
Joe Magnacca: This space signifies great historical achievement, where it took workers just 93 days to build the entire steel frame of this 72-story building in 1930. We preserved things like the arches and of course some of this will be unique to this store. The store at 40 Wall Street is the latest phase in introducing our iconic New York brand to its modern relevancy with our New York metropolitan-area customers.

WWDBeautyNews: Why is it so important and what is your main goal?
JM: Drugstores, especially in North America, haven’t changed in many years. We want to build the experience and borrow from Europe where stores are a fun experience. We also have to serve needs such as in New York there are food deserts without grocery stores. In beauty, we fill the need for a quick service with our Essie and OPI manicures. The time is here for change.

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