From revamps of existing brands to launches of completely new brands, the big three drugstore chains have transformed their store brand programs in recent years.
It's been a busy couple of years on the private brand side for the drugstore channel's big three: CVS/pharmacy, Rite Aid and Walgreen Co. From revamps of existing brands to launches of completely new brands, they've been entrenched in product development.
CVS/pharmacy aims for value and innovation
Early in 2011, Woonsocket, R.I.-based CVS/pharmacy introduced the Just the Basics line of household essentials. The products are said to bring "smart simplicity to shopping for everyday value."
The value-tier store brand covers products in a variety of categories throughout the store, including grocery, household, beauty, baby and personal care, according to CVS/pharmacy. The line is said to offer "the lowest prices and highest value" compared to other options with equivalent sizes and quantities.
"Since its launch, Just the Basics has experienced tremendous growth and exceeded expectations for the value brand by more than 5 percent," a spokesperson for CVS/pharmacy tells Progressive Grocer's Store Brands. "This year, CVS/pharmacy will be refining the line to continue providing shoppers value where they want it."
Brands such as Just the Basics and CVS brand give consumers not only high quality at an affordable choice, but also more choices, the spokesperson says.
"Whether a shopper prefers to purchase store brand items in combination with their national brand favorites or they're a devoted store brand enthusiast, our goal is to provide options to suit any lifestyle and any budget," she adds.
But the retailer also has been active on the upscale side, partnering with actress Salma Hayek to introduce the Nuance Salma Hayek beauty product line in summer of 2011. The line – which comprises more than 100 products – is said to be inspired by the actress' grandmother, a cosmetologist who developed her own homemade beauty remedies. Each product in the line was inspired by Hayek's own beauty rituals and extensive global travels, CVS/pharmacy noted.
The products' formulas include many unique ingredients such as tepezcohuite, blue agave, prickly pear and lime enzyme. According to CVS/pharmacy, Hayek tested every product in the line, partnering with formulators to ensure the highest standards and results. The line encompasses skincare, cosmetic, hair-care and body products.
At the time of launch, Mike Bloom, who then was the executive vice president of merchandising and supply chain for CVS/pharmacy, said the Nuance Salma Hayek line represented the latest of many first-to-market innovations for the retailer.
"Our partnership with Salma Hayek in creating a premium beauty line that is accessible to all women takes our beauty leadership and innovation to the next level," he said.
Rite Aid revamps, adds value line
Back in 2010, Camp Hill, Pa.-based Rite Aid said it would revamp its entire store brand program, adding new brands and new products and giving existing offerings a new look. The new brands include Rite Aid Renewal, for beauty care products; Rite Aid Pantry, for certain foods and beverages; Right Aid Home, for household goods; Right Aid Tugaboos, a baby care line; and Simplify, a value brand that includes grocery and household items.
Of the new brands, Rite Aid has been most vocal about Simplify and Tugaboos.
"Customers continue to look for the best price for the items they need, and that's exactly what they are getting with Simplify, our first-ever value line," said Kathy Horton, senior director of Rite Aid Brands, in a press release heralding the brand's launch. "Our new price-fighter private brand offers customers quality products at prices they'll love."
For the brand's debut, Rite Aid also created short informational videos about Simplify paper towels and bath tissue on Rite Aid's Video Values online savings program site, and offered $1 off coupons.
As for Tugaboos, Rite Aid noted at launch that diapers under the brand feature a new design technology for additional absorbency and leakage protection and also come with a money-back "customer satisfaction guarantee" on the package. In addition to diapers and training pants (all hypoallergenic), the line includes creams, lotions, bath care and other items.
And for its California stores, Rite Aid continues to add new items under its Thrifty Ice Cream brand. Last summer, the retailer made vanilla nonfat frozen yogurt available at hand-dipped ice cream counters in nearly 500 of its California stores, and debuted take-home pint containers of ice cream. It also introduced Birthday Cake ice cream sandwiches and several limited-availability ice cream flavors.
This year, in addition to new limited-availability ice cream flavors, Rite Aid launched a trio of Greek-style nonfat frozen yogurts – in Blueberry Cheesecake, Chocolate Lovers and Strawberry varieties. They have a higher protein content, lower levels of lactose and live probiotic cultures that can help aid digestion, Rite Aid said. The products boast bold, green packaging to match the existing nonfat frozen yogurt varieties.
"Rite Aid is proud to be one of the first retailers to offer Greek-style frozen yogurt," said Ron Simmer, general manager of the Thrifty Ice Cream plant in El Monte, Calif., in a press release. "Like the many storied Thrifty flavors that came before, our Greek-style varieties are primarily sourced, made and distributed in California – all for about half the price of most national competitors."
Walgreens consolidates brands, introduces Nice!
In 2011, Deerfield, Ill.-based Walgreens announced that it was phasing out a number of brands and bringing in a new brand dubbed Nice!. The Nice! brand covers grocery and household products sold at prices up to 30 percent below the national brands, Walgreens said in a press release, and features a bold, clean design to make it easily recognizable and simplify the shopping experience.
At the time of the new brand's launch, Walgreens said its Café W, Deerfield Farms, W and certain other brands would be phased out and transitioned to Nice!.
"Store brands have always been a core part of our business," said Joe Magnacca, Walgreens' president of daily living products and solutions. "With more shoppers seeking value in this economy, we've been able to attract new customers across every income level to our brands and maintain their loyalty with a focus on quality and assortment. Now with the launch of Nice!, we are streamlining our offering to make it even easier for customers to identify high-quality everyday essentials at a great value."
Walgreens did say it intends to keep its Good & Delish product line, renamed from DR Delish. In fact, it bolstered the selection of the line's premium snacks and beverages. The private brand first debuted in New York's Duane Reade drugstores, which Walgreens acquired in 2010. Many of the products offer benefits such as being trans-fat-free, gluten-free, reduced-calorie or made with natural ingredients.
"The Delish brand gives our customers snacks and beverages with premium recipes but at more affordable prices," said Moe Alkemade, Walgreens' divisional vice president and general merchandise manager of private brands, at the time of the Nice! brand announcement. "This brand further differentiates us from other major retailers."
Walgreens also launched a national marketing campaign this year promoting Walgreens brand health and wellness products. The Walgreens label will continue to be used for health and wellness products, the company said, which include items such as over-the-counter medicines, vitamins and supplements, first aid supplies and sun care products.
The retailer also enhanced and expanded its petshoppe brand of pet supplies, growing the line from 10 items to more than 60 this year. New packaging and more prominent placements within stores will make it easier for pet owners to find value, Walgreens said.
And the retailer even entered into value-tier territory this year – very quietly – with several food products sold under an unnamed brand. The brand's packaging features a smiling sun and the "savings with a smile" tagline.
What hits the mark
We asked a number of retail consultants and industry observers for their thoughts about all the changes the three drug chains' have made to their store brand programs. The positive comments, fortunately, outweigh the negative ones.
"I've been really impressed by Walgreen's integration of the [Good &] Delish brand into its namesake stores after acquiring Duane Reade and by its launch of Nice!," said Carol Spieckerman, president of newmarketbuilders, a retail consulting firm. "I also like the way that both brands give Walgreens almost instant credibility in food through clean presentations and eye-catching packing. They didn't dumb it down or treat food as an afterthought."
In addition, she likes the fact that all three retailers chose non-banner names for the three most encompassing launches: Just the Basics, Simplify and Nice! – especially CVS/pharmacy and Rite Aid, "since their names and logos are still so connected to pharmacy." And she also gives kudos to Rite Aid for taking on and sticking with its private label architecture realignment, calling it "the right thing to do."
With a more traditional private brand look, the Simplify brand messages value immediately, Spieckerman notes. She believes Just the Basics and Nice! accomplish the same objective, but "with a more modern and impactful" look.
"I like the category synergy between household, health, beauty and personal care in CVS' Just the Basics brand," she adds. "It's female-friendly, and it evokes Target's brand presentations, which is not a bad thing."
And Spieckerman calls the positivity of Walgreens' Nice! brand a stroke of genius from which other retailers could learn.
"Shoppers are tired of gloomy, serious brand messages," she said. "Nice! also makes an impact on the household shelf, not just the store shelf, which will drive awareness and affinity beyond price."
Even though he's a bit concerned that the large amount of white space that Just the Basics, Nice! and Simplify have could remind consumers of "generic" products from the past, Herb Sorensen, Ph.D., global scientific advisor for TNS' Global Retail & Shopper Practice, admits their design represents an improvement over yesterday's plain white labels. And in a comparison to certain national brands, many of the products under the new brands are more appealing in terms of packaging, he believes.
In examining a particular Nice! product (popcorn), Sorensen says he also noticed that the packaging design allows for vertical or horizontal product placement. That's a positive in that the retailer has some flexibility in terms of display.
On the merchandising front, both CVS/pharmacy and Walgreens have done a much better job in showcasing their own brands of late, says Gene Detroyer, professor of entrepreneurship and business strategy at the European School of Economics.
"As a matter of fact, I think Walgreens, over the last four or five years, has done a 180-degree turn," he says. "Instead of being a buyer of products from vendors and concentrating on how cheap they can get or how much they can buy, they've become a seller of product. And I think that's a very, very important change in mindset."
Detroyer also likes what CVS/pharmacy has done to make their stores as a whole more appealing.
"I like the way they focus on high-margin products, particularly in the cosmetics category and healthcare category," he adds.
Ben Ball, senior vice president of Dechert-Hampe Consulting, Northbrook, Ill., agrees that both CVS/pharmacy and Walgreens are approaching store brand merchandising in the right way.
"They are both doing a good job in terms of prominence in merchandising," he says. "You see their products out front and center."
What might not fly
Despite all the positives, our observers see some potential problems, as well.
Ball is not convinced that Walgreens' Nice! brand name will mean anything to consumers – or that its Good & Delish moniker will resonate with consumers outside the New York area.
"Nice! is a particular thorn in my side because 'nice' as a description for food doesn't make sense unless you've lived in a European country or Australia," he says. "Here, we say 'good.'"
As for Good & Delish, Ball calls the name descriptive, but "100 percent puffery." It lacks the implication of superiority that a brand such as President's Choice has, he believes.
And in a comparison of paper towels, Sorensen wasn't thrilled with the quality of the Just the Basics and Simplify brands, noting that the Simplify version came in an especially skimpy roll. But he was pleased with the Nice! paper towels, saying the quality was superior to Bounty's. It should be noted, however, that Nice! is situated within the national-brand-alternative space, while the other two brands are within the value tier. (And, of course, a review of one particular product sold under each of the brands does not say anything about the quality of other products under the brands.)
Speaking of the value tier, Detroyer doesn't care for the idea of value brands in the first place.
"I'm not saying there shouldn't be value brands, but I think that the opportunity is in quality store brands," he says. "And when we say value brands, it reminds me of the old, 'we're giving your something less for less money' … The retailer could take half of the money that the consumer products brands spend on advertising and building their brands and put it into quality and still have a slightly lower price and come out with a big win."
Going forward, Spieckerman says the three retailers will need to pay attention, "as channels and categories continue to blur." Retailers ranging from dollar stores to grocery stores now are going after categories that traditionally have been drugstores' arena.
"Of course, drug retailers are also stepping away from their cores as never before," she acknowledges. "Walgreens' corporate brand messaging transition to being a 'health and daily living store' casts this wider net and allows them to move in new directions. Going forward, retailers would do well to establish a similarly expansive mission that nonetheless defines what they will and will not go after and how they will approach their customers."