download the PDF version - Strategy

Shopper’s Drug Mart, an ever-expanding
Walmart and new entrant Target (not to
mention food retailers like Loblaw expanding
into pharma), Rexall encountered another
curveball over the past two years as the
government set limits on what pharmacies
were allowed to charge for generic drugs.
The brand required not only new sources of
revenue but also new ideas.
Internal changes were also sweeping
the brand. Rexall’s parent, the privately
held Katz Company, sold off the majority
of its franchisee-owned pharmacies (such
as its I.D.A. and Guardian brands) to the
McKesson Group for just under $1 billion last
year, allowing Katz to focus on the remaining
430 Rexall and Rexall Pharma Plus stores in
Ontario and the western provinces.
So Rexall decided to change how it
defines itself and what it means to its
customers, and it had to do it really fast.
Enter Joe Jackman.
Jackman (opposite page, right) helped
found the retail design firm Perennial in
Toronto in the late 1980s, consulting for a
variety of brands, before leaving to work as
a marketing executive at Loblaw in 2005.
Two years later he founded his own “brand
reinvention” company. In 2008, Jackman’s
company took the dated, underperforming
Duane Reade pharmacy chain in New York
City and transformed it into a growing
business that was purchased for roughly $1
billion by industry giant Walgreens less than
two years later. Scorpiniti (who joined Rexall
in April 2011 and named CEO in February
2012) was part of the Duane Reade
management team. In October 2011, the
two men began working together again on
how to reimagine the Rexall experience.
After Jackman Reinvention undertook
its initial assessment of Rexall, it learned
the brand had high awareness and trust in
most parts of the country, but on important
measures like market share, it trailed behind
Shoppers Drug Mart. After sifting through
data gleaned from focus groups, consumer
research and discussions with the brand’s
employees, Jackman describes “goosebump
moments” that sprung from two realities:
first, Canadians wanted to live healthier,
beyond just the food they eat, and second,
governments were turning to pharmaretailers
to deliver more health care services
to alleviate rapidly rising costs.
Suddenly Rexall had the beginnings of a
new brand strategy centred on a “healthy
choice” positioning. And changes came
even faster than usual for a Jackman
reinvention. Less than eight months after
the first sit-down with Jackman, a newly
branded store opened in the Richmond
Adelaide Centre in downtown Toronto,
testing some of the ideas being hatched.
“Usually in the first four to six
months there’s a lot of research, a lot of
conversations with a brand’s customers
and senior management,” says Paul Clark,
senior partner and CMO at Jackman.
“That’s the window when strategy is
developed and there is a large collaborative
aspect to it…With Rexall we moved very
quickly because we opened our first store
in about eight months. As the strategy was
baked, we put a lot of the elements into the
[first] store and learned from that. You can
wait forever to get it right, but if you know
where you’re going, you can put it into place
and adjust as you need to.”
The new Rexall aims to be a go-to
destination for people seeking a holistic
approach to better living. Its pharmacists
are encouraged to consult with customers
(Scorpiniti refers to them at times as
“patients”) on their overall health and offer
advice when necessary. Shelves are stocked
with a new private label line of healthier
foods, environmentally friendly household
goods and expanded beauty offerings.
“We’re going to put a special emphasis on
our healthy choices, and that’s what’s going
to be different from everybody else,” says
Clark. “[Rexall] will now be offering more
healthy products than can be found in most
any other drug store across the country.”
And there are new stores too: they’re
brighter, more airy, and adorned with the
brand’s new “Feel Good Approved” symbol
on products, flyers and displays. Gone
are the bright blue and orange colours,
replaced with a turquoise-teal scheme.
With the brand’s redesigned flyer and
in-store magazine Feel Good displayed
prominently throughout (not to mention all
staff members decked out in “Feel Good”
t-shirts), it’s clear the idea is to persuade
people that Rexall is a destination for
healthy living.
And it’s working. At the nine reinvented
stores, “results are surpassing expectations.”
“We have a job to do, and that’s to help
Canadians feel good every way, every day.
It’s a noble purpose because life isn’t easy
and the brand can make a difference,”
Jackman says.
Strategy spoke with Jackman and
Scorpiniti about the reinvention process
and progress.
March 2013
13