Executing the big picture one detail at a time
An often-heard remark in arguments between people is, “You’re not looking at the big picture.” But it’s often just as important to look not just at the big picture, but all the little parts that constitute it, especially if you’re the head of store operations for a major retail chain.
For Rite Aid, the big picture is creating a better experience for its customers through its Wellness initiatives, from the new store format to its loyalty card program. But for Rite Aid EVP of Store Operations Bob Thompson, it’s as much about improving the experience for its associates — namely, by taking work out of the store — any way it can, to enable its people to focus on the customer experience. “We call it ‘project simplification,’” Thompson told Drug Store News. “We’re always looking for the next new way we can simplify things. It really is ‘How do you make a store easier to run? How do you simplify things so that the associates and management teams can focus on the customers?’ We want this to be a very customer-centric experience.”
Rite Aid’s overarching focus on “wellness” as the unifying concept behind its initiatives in the pharmacy and in the front end all tie into this goal, and Thompson’s role is to make sure all the little pieces in the store fit together to make it happen, particularly when it comes to the Wellness store concept. This includes the parts of the store that customers see, as well as the parts they don’t see.
Usually when customers come into a store, their first thought is where to find the products they’re looking for. But Rite Aid has a system that determines the location of everything that goes into its stores, from products to signs. Thompson calls it the “walk sequence,” which sequences all work in the store based on its location in the store; signs, for example, will arrive in a stack in the order in which they are to appear in each aisle.
The company also utilizes a backroom inventory system in which every item in the store is scanned by location. So when a store associate tries to find a product for a customer or restock an item that has run out on the shelves, he or she can scan the barcode, and the system will identify its location in the backroom. This makes it a lot easier to restock the store and maintain perpetual inventory, Thompson said.
A major aspect of the new Wellness concept is its more open, airy design, which calls for the de-cluttering of the store. That creates what Thompson calls a “decompression zone,” which includes removing select merchandise from the stores, lowering the shelves, reconfiguring some adjacencies and overhauling the traffic pattern through the store. The company has become better at deciding which SKUs to retain and which ones to remove, basing those decisions on factors like selling history, volume and demographics; for example, in a store in a resort area, seasonal might play more like a year-round category. “Part of the challenge in our business, as it is in every retailer, is understanding that an item may be important to a customer in spite of a slow selling rate,” Thompson said. “One of the things we do is, we look at all these remodel candidates in advance of the remodel, and we look at every demographic that’s associated with that store to help determine which products stay and which ones go, where to locate certain categories like photo and how to recapture space that could be reallocated to a more relevant business for that store.”
Rite Aid is even looking at how to improve the checkout experience — both for its associates and its customers — moving to more of a straight-line configuration, raising the cash register by a couple of inches, re-positioning the cashier and positioning monitors so that customers can watch as their items are being rung. These kinds of minor changes might escape a customer’s notice, but it can make a huge difference in the cashier’s ability to serve customers more effectively.
All of this is just a small part of changing the store, but not just in terms of appearance or getting inventory under control. Again, it’s about engaging its associates to help better engage the customer — a critical goal of the new Wellness stores. “The customer doesn’t just experience a new look when they come into the store — they get a new experience because our associates are responding to the format in such a positive way,” Thompson said. Just as Rite Aid measures its customers’ satisfaction levels, it also regularly surveys its associates regarding their work experience, as well as the tools, communication, resources and training they are given to get their job done. On this front, Thompson said associate satisfaction scores have been improving “in the double digits,” over the last couple of years — particularly since the introduction of the Wellness store concept.
The pharmacy gets a big makeover as well, both in front of the counter and behind it. Rite Aid has made a major commitment to advancing the profession of pharmacy, and has emerged as a major leader in the push to expand immunization services in community pharmacy, with all of its pharmacists certified to be immunizers. This changes not only the physical space, but also the equipment placed in the stores, Thompson said. One example is the need for appropriate refrigeration for vaccines. In addition, the “vast majority” of the new stores have consultation rooms near the pharmacy as well, said Thompson, who called the rooms a “game changer.”
Remodeling for wellness
And it’s all a pretty big job. Every week, Rite Aid completes about 15 Wellness remodels, adding up to about 500 per year — or one-and-a-half per day — with anywhere up to 45 stores being redone at any single time. The construction is designed to happen with minimal disruption, with stores remaining open while construction is underway. Stores are selected for conversion to the new Wellness concept based on front-end sales volumes, the profitability of the pharmacy and the amount of time it has been since the store was last remodeled.
But in reality, it’s a job that is bigger than just the operations group. Getting it all done requires substantial coordination between different parts of the organization, Thompson explained. In keeping with the more open spirit of collaboration and communication across departments that has come to define the new corporate culture at Rite Aid in recent years, executing store remodels includes regular conference calls with field leaders, real estate, merchandising, loss prevention and headquarters, all with the goal of making the company as a whole — not just departments and divisions — successful.
“We really do have everybody sitting down together, thinking about how we can make this store successful,” Thompson said. Thompson, who joined Rite Aid in 2007 from Target, told DSN that in that time he watched the company become much less silo-ed by department. “We’re singularly focused on making Rite Aid a great place to shop and a great place to work and a great place to invest in. I think it keeps us all moving in the same direction,” Thompson said.
Getting engaged
The biggest challenge though, Thompson said, is communication — getting the right message to its employees in more than 4,600 stores. Technology certainly helps in this regard, he said. To get the word out, Rite Aid relies on a weekly update it calls, “Field Leader Focus,” to help the stores sort through priorities.
Providing great customer service is ce