Abstract
The paper presents the analysis of business concept applications on the example of a big Canadian company Shoppers Drug Mart. A systematic literature review provides information on retail networks and the peculiarities of their functioning. It also proves the importance of using diverse strategies such as measurement of distribution effectiveness, estimation of network economies, customer segmentation, etc., to manage a retail network efficiently.
Special attention is given to retail formats and specialty services of Shoppers Drug Mart. It is stated that such customer segmentation attracts consumers and contributes to customer satisfaction. Another aspect reviewed in the paper is the impact of the company’s business concept of the functional areas. The paper also suggests ways to maintain the market share of retail networks. Finally, the perspectives of Shoppers Drug Mart in the sustainable development of the business are outlined.
Introduction
Business concepts selected and applied are usually crucial for the development of this or that company. The business dictionary defines the business concept as “an idea or a business that includes basic information such as the service or product, the target demographic, and a unique selling proposition that gives a company an advantage over competitors” (n.d., para.1). In fact, a business concept can be treated as a new product or an innovative approach to human relations management or the company’s marketing in general. Selecting prior concepts is one of the stages passes by a company in the process of its development. When a concept is formulated, it becomes a component of the company’s business plan.
On the whole, the concepts and priorities determine the relations with many stakeholders, which are necessary for long and successful relations between the company, its investors, customers, and other parties involved. As a rule, companies apply mission statements to identify their ideas and attitudes (Anitsal, Anitsal, & Tulay, 2013). They are particularly important for high performing retailers because these companies have many partners and customers who need to be aware of the company’s strategy.
Apart from mission statements, there are numerous ways of attracting customers and investors. Thus, some companies focus on advertising, the development of new products, or the implementation of emerging technologies. However, for big retailers such as Shoppers Drug Mart Corporation, an efficient retail network is a primary concern. The main goal of this network is to make the company and its products and services attractive and available for the customers. However, before evaluating the efficiency of a company’s business concept, the review of similar practices can be useful. Thus, current research aims at investigating the peculiarities of retail networks and the following analysis of such a network of Shoppers Drug Mart Corporation.
Systematic Literary Review
A systematic review of existing studies and their results can become a basis for further research of the company’s business concept (Rousseau, 2012). It will help to evaluate the company’s practices and suggest possible ways for improvement.
Beule, Porl, and Weghe (2014) suggest a model for robustly benchmarking and predicting retail network performance. The authors conduct a study presenting “a modified Huff model,” which considers “spatial competition between stores of the same brand, brand attraction based on actual brand performance and spatially variable substitution” (Beule et al., 2014, p. 1). The study is based on the fact that the role of benchmarks in the assessment of retailers’ operational performance is big since they provide a fair analysis of inner and outer impacts. The researchers analyze approaches to benchmarking and predicting turnover and suggest their own approach to the problem.
Then developed model, which is an improved variant of the Huff model, is tested as compared to the original one (Beule et al., 2014). The authors claim that the new model, which proved to be more efficient than the basic one, can be applied for various purposes (Beule et al., 2014). For example, it can be used for predicting the profitability of new store locations, thus contributing to the stability of the whole retail network.
Lau provides research aimed at measuring the distribution effectiveness of a retail network with the use of data envelopment analysis. On the whole, efficiency is among the main aims of supply chain management. It is crucial for retail companies, the success of which greatly depends on the proper and timely distribution of resources. The author supposes that data envelopment analysis can be applied as “an alternative method to rationalize a retail distribution network through comparison of distribution performance among different stores in the network,” thus providing “greater overall efficiency” (Lau, 2013, p. 2).
The author provides an empirical example of a retail network rationalization. It consists of the consideration of the company’s background, sample selection, the development of the research methodology, and the analysis of the results. The research proved that data envelopment analysis is a reliable method to analyze and compare sales and distribution cost data (Lau, 2013). It demands fewer aggregate data for its operation.
Consequently, the application of such analysis is comparatively easier, and its results are clear and comprehensible. Finally, the author concludes that data envelopment analysis can be used as a flexible and user-friendly method in distribution network rationalization (Lau, 2013). However, the research has some limitations due to the “limited number of stores analyzed and the relatively small set of inputs and outputs used in the analysis” (Lau, 2013, p. 10).
A study by Ellikson, Houghton, and Timmis (2013) provides an estimation of network economies in retail chains. The study estimates the impacts of chain economies, business stealing, and comparative advantages of heterogeneous companies in the discount retail industry. Then researchers provide examples of the so-called “big box” chain stores such as Wal-Mart, Kmart, and Target (Ellikson et al., 2013, p. 170).
One of the problems discussed is the estimation of the number and location of stores in various markets. The research reveals diverse preferences of the mentioned big retailers in locating their shops. Thus, Wal-Mart stores were mainly placed in rural areas, while Kmart and Target preferred more urban locations (Ellikson et al., 2013). This choice was determined by choice of their target customers. The authors conclude the article by the limitations, which include the modeling of entry behavior as “a static game” (Ellikson et al., 2013, p. 188).
Secondly, the researchers were “forced to restrict our structural errors to only allow for a market-level unobservable that is common across all firms (Ellikson et al., 2013, p. 188). Nevertheless, the bias which can be provoked by this omission would define the “direction of finding strong local chain effects” (Ellikson et al., 2013, p. 188).
Kumar et al. provide a comparative analysis of differential consumer responses across supermarkets and specialty stores. The research was conducted in the conditions of a changing retailing industry. Ahlert et al. (qtd. in Kumar, Trivedi, Bezawada, & Sridhar, 2012, p. 561) state that the appearance and functioning of different retail formats can be explained by three major factors, such as “competitive advantages sought by retailers, consumer trends and their purchasing behavior, and changing role of the manufacturing industry.” The researchers state that in the conditions of increasing competition in the retail market, companies should pay attention to consumer shopping behavior and variations in-store formats (Kumar et al., 2012). Such an approach can have a positive impact on the competitive ability of a retailer.
The research is aimed to address the issues of consumers’ responsiveness, their preference in certain store formats, and strategic implications for the retailer. Thus, then researchers suggest a heterogeneous model “of consumer purchase behavior that studies differential response across different store formats” (Kumar et al., 2012, p. 562). The model includes “prices and promotions, store characteristics such as distance and assortment, and external factors such as seasonal effects, while controlling for individual differences or heterogeneity by incorporating random effects” (Kumar et al. 562).
The model is evaluated with the help of some households that do the shopping in stores of two different formats. Moreover, the research focuses on the influence of price and promotion market share and profits. The research revealed a correlation between the choice of a product and store category preference (Kumar et al., 2012). Also, the research revealed the dependence of purchase activity from some external factors such as holidays, for example (Kumar et al., 2012).
On the whole, then research showed the importance of a store format choice for retailers’ success. The attention should be given to the category preference, marketing mix, store format characteristics, and external factors together with cross-category correlation. Managerial implications of the research include “means of defining a positioning strategy for a diverse market characterized by heterogeneous consumer needs and intense competition” (Kumar et al., 2012, p. 568).
The research itself applied a conceptual framework of “heterogeneous consumer shopping behavior across different store formats for similar product categories, to offer a model which includes factors such as store characteristics, marketing variables, category characteristics, and external factors” (Kumar et al., 2012, p. 568). Finally, it should be mentioned that the study contributes to the explanation of dome concerns which are related to big retail formats both in developing and developed countries.
Speaking about retail networks, the role of the supply chain should be mentioned. A study by Sadghiani, Torabi, and Sahebjamnia (2015) suggests a design of a retail supply chain network under operational and disruption risks. The authors introduce the idea that the issue of the supply chain network design demands some strategic decisions (Sadghiani et al., 2015). Thus, the number of facilities, their location, and capacity necessary to provide consumers with goods timely and effectively should be considered by retail companies.
One of the complications here is that the supply chain networks should function for several years, and their efficiency cannot be obvious from the start. Thus, there is a need for assessing operation risks that may appear (Sadghiani et al., 2015). It is necessary to provide a retail network with a reliable supply of goods and thus contribute to customers’ satisfaction. The researchers underline the importance of a transportation network necessary to transfer goods to retail stores from the facilities where they are stored.
The authors suggest a multi-step solution methodology which consists of “possibilistic programming approach” (Sadghiani et al., 2015, p. 102). After the test of the suggested retail supply chain network models, some managerial implications are suggested. They deal with the transport necessary for goods delivery to retail stores and the decisions of companies’ top management on this problem (Sadghiani et al., 2015). Moreover, the provided model is an attempt to “incorporate robustness and resilience measures simultaneously” into the problem of retail supply chain network development (Sadghiani et al., 2015, p. 102). In addition, Sadghiani et al. provide a case study of a well-known retail chain in Tehran (2015).
The chain has twenty-four branches and sells the variety of supplies. The study provides seventeen scenarios of chain development including the possibilities of different natural and other disasters. The case study allows to evaluate the suggested model. On the whole, the model is useful for the assessment of managers’ strategic decisions on the issue of transportation.
Hard discounters make a particular category among retail companies. The research by Cliquet and Guillo (2013) regards the issue of retail network special expansion with the use of the percolation theory to hard discounters. The study focuses on the spatial arrangement of a retail network (Cliquet & Guillo, 2013). This arrangement can be well planned or influenced by some conditions.
The authors review special strategies in retaining which become crucial in the conditions of a contemporary competitive retail marker (Cliquet & Guillo, 2013). For example, the strategies of market penetration or expansion can be used in retailing. The authors compare diffusion and percolation theories as applied to the expansion strategy. As the basis for theory application, hard discount networks in France are used. It is mentioned that their success is determined by the cost control to preserve affordable prices and provide a competitive advantage (Cliquet & Guillo, 2013). This approach attracts customers and contributes to their loyalty.
The authors claim that “the internal marketing, the brand diffusion and the logistical function should be improved with the existence of a percolating cluster. The existence of gaps between isolated clusters should compel retailers to restructure their networks. Locating new outlets or relocating existing stores in order to create a percolating cluster will allow the network to enter the next step of the retailing wheel” (Cliquet & Guillo, 2013, p. 180). However, the strategy of hard discount store network needs careful consideration of customers’ demand in every location to provide a suitable choice of goods.
Another important aspect of business which is particularly necessary for big retailing companies is customer segmentation. According to Rousseau, “Customer segmentation optimizes product and service features to customize against market segments, according to their value and cost” (2012, p. 231). The issue of customer segmentation appears in the context of the customer relationship management (CRM). According to Lamb, Hair, and McDaniel, CRM is a process which “enables companies to prioritize their marketing focus on different customer groups according to each group’s long-term value to the company or supply chain” (2016, p. 222).
When a company identifies its high-value customers, it concentrates on consideration of interests and needs in services and goods of this category. Lamb et al. conclude that the CRM process comprises customer segmentation by value which is followed by the development of customers’ loyal attitude (2016). Lamb et al. also speak of the importance of retailing (2016). The authors define the types of in-store retailers which include department stores, specialty stores, supermarkets, drugstores, convenience, discount, full-line stores and many others (Lamb et al., 2016).
Moreover, then researchers deal with the issue of rise of nonstore retailing which “enables customers to shop without visiting a physical store location” (Lamb et al., 2016, p. 249). Nonstore retailing includes automatic vending, self-service technologies, direct retailing, direct marketing, telemarketing, direct mail, shop-at-home television networks, and online retailing (Lamb et al., 2016). Finally, the authors provide advice on executing a retail marketing strategy.
It comprises several stages. First of all, a target market should be defined. Secondly, the retailing mix should be selected. It means the choice of product, its promotion, the selection of location, calculation of price, and retail store presentation. Finally, the employees should be found and carefully trained. Only dedicated professionals can provide success to the retail location. One of their primary tasks is the organization of an efficient customer service (Lamb et al., 2016).
Customer segmentation is applicable to many business spheres. However, it is more important for retail companies. Thus, Tsai et al. discover customer segmentation issues and strategies for an automobile leadership. The authors claim that customers are considered to be valuable assets for many world companies functioning in the field of service (Tsai, Hu, & Lu, 2013). One of the ways to profitability and preservation of competitive ability is the realization and fulfillment of customers’ desires.
The article by Tsai et al. provides the results of a case study of customer segmentation on the example of a car dealer in Taiwan (Tsai et al., 2013). In this case, the process of customer segmentation is preceded by extraction of information from the car sales database; the automotive services database; basic customer information, and the call center database (Tsai et al., 2013). The research is an attempt to use clustering techniques for customer segmentation as applied to automobile industry. In this case, the records of product sale are less important than records on repair and maintenance services (Tsai et al., 2013).
Thus, this fact should be considered during segmentation to provide the development of services or marketing strategies which satisfy all customer groups. The authors conclude that customer segmentation significant for the high efficiency of CRM (Tsai et al., 2013).
Muller and Haase investigate the issue of customer segmentation in retail facility location planning (2014). The article represents situations in which retail store chains prefer to control the competition on the market. The company’s management in similar situations makes a decision on the location of new facilities to make them comfortable to the customers. A model of customer segmentation presented by the authors enables retailers to develop excellent network of shopping facilities (Muller and Haase, 2014). The approach suggested in the research can be applied to reinforce managerial decisions.
Another approach to customer segmentation is suggested by Fotaki, Spruit, Brinkkemper, & Meijer (2014). They explore big data opportunities and their application in online customer segmentation. It is a useful study because contemporary business competition makes many companies provide also online activity. The researchers consider customer segmentation an integral part of online marketing (Fotaki et al., 2014).
It includes the distribution of customers into definite groups. Customer segmentation is treated as an effective way to manage various customers with diverse purchase priorities. It allows the development of corresponding marketing strategies. Online customers’ segmentation can be provided in accordance with peculiar features which are traced online with the application of particular techniques and algorithms (Fotaki et al., 2014).
Different segmentation types are grounded on diverse customer characteristics collected from some sources. As a rule, customer segmentation types correspond various business goals and tasks taking into account company’s marketing goals (Fotaki et al. 2014). The research unites the aspects of online marketing, customer segmentation, and big data analysis into the Online Customer Segmentation Framework which provides algorithms of tools and techniques application to big databases (Fotaki et al., 2014).
Summarizing the research findings which deal with retail networks and peculiarities of their functioning, it can be concluded that despite many investigations, there is no detailed study dedicated to pharmaceutic retail company. Then major concepts to be considered while developing a retail network are as follows. First of all, it is important to select instruments which can be used to predict the efficiency of the network performance.
For example, a model for robustly benchmarking suggested by Beule et al. (2014) can be applied. Secondly, a measurement of distribution effectiveness of a retail network can be included. Here Lau (2013) suggests data envelopment analysis as a possible method. It is also necessary to provide estimation of network economies in retail chains (Ellikson et al., 2013). It is particularly important for big chain stores. When it comes to big retailers, the meaning of a supply chain is a meaningful component to be considered. It should me mentioned that a supply chain network design often demands strategic decisions from managers (Sadghiani et al., 2015).
A particular place in retailing is given to hard discounters Cliquet and Guillo (2013). Consumers are probably among the most influential factors for retail chain development. Thus, their response to various retail networks should be investigated. One more crucial aspect to investigate regarding retail networks is customer segmentation. It allows companies to consider needs and interests of consumers and thus provide them with necessary goods and services.
In case of customer segmentation, it is necessary to consider the peculiarities of the field of its application. Thus, the principles of segmentation for the automobile dealership and grocery supplies will differ substantially. Another sphere to use customer segmentation is location planning (Muller & Haase, 2014). On the whole, the variety of aspects influencing the functioning of the retail network makes its development and successful management a complicated process. Nevertheless, in case all necessary considerations were made, a retail network will provide long and efficient functioning of a company with constant income.
Company Analysis
Global retailers concentrate on various issues. Thus, according to data of the research conducted by Anitsal et al. (2013), the major concerns include product or service, people, production process, place and price or value. Among the top 100 global retailers, forty-five percent consider people component to be decisive for their business. This component comprises “general stakeholders, or employees (associates), customers and shareholders (investors) (Anitsal et al., 2013, p. 7).
It means that the company’s business concept and mission statement are selected with the consideration of interests of a certain group of people. For Shoppers Drug Mart Corporation (Canada), customer satisfaction is a main goal (Anitsal et al., 2013). Thus, customer value is considered to be the moving force for company’s marketing activities. Shoppers Drug Mart Corporation formulate their goal as follows: “To be the leading drugstore retailer in all communities across Canada by providing superior customer satisfaction beyond expectation, resulting in a hassle free, feel good experience” (as cited in Anitsal et al., 2013, p. 9).
The researchers conclude that most of the global retailers “try to provide satisfaction to their customers” (Anitsal et al, 2013, p. 11). They tend to do mere than expected to attract even more customers or guarantee the improvement of then existing goods or services. The methods the companies use include the following: “being customer-centric, competitive prices, high quality, great selection, superior customer service, convenient location, continuous innovation, desired lifestyle, long-term relationships and customer value” (Anitsal et al., 2013, p. 11).
Shoppers Drug Mart is one of six companies which constitute the Loblaw Family of Companies which are united by a motto “Live Life Well” (Loblaw Companies Limited, 2015, p. 3). Its value proposition “Your Life, Made Easier” mirrors the general company’s guarantee to provide the customers with convenience and wellness (Loblaw Companies Limited, 2015, p. 2). Shoppers Drug Mart is one of the leading retail companies in Canada.
For example, its Beauty Boutique was one of the winners of 31st annual Retail Store of the Year design competition (Wilson, 2014). According to Wilson, “the 4,500-sq.-ft. in-store shop uses sophisticated materials and lighting to create an environment befitting of luxury brands but still approachable to the mass market” (2014, 14) which contributed to its popularity. As of 2012, it was at the top of the list of the leading Canadian brands with the estimated enterprise value of 9,059 million of CAD dollars (Leading 10 Canadian retail brands in 2012, by brand value, 2017).
Its brand value took the second position in the rating with 1,926 million CAD dollars. A year earlier, in 2011, Shoppers Drug Mart had the biggest share market share among the leading retailers in the pharmacy and personal care sector occupying 31.8 percent of the market (Leading retailers in the pharmacy and personal care sector in Canada 2011, by market share, 2017).
Shoppers Drug Mart Corporation is a company comprising “full-service drug stores” in Canada (Our company, n.d.). It has a retail network which includes some retail formats and specialty services. Thus, retail formats include Shoppers Drug Mart, Shoppers Simply Pharmacy, and Murale while Shoppers Home Health Care, Specialty Health Network, and MediSystem Pharmacy belong to specialty services (Retail formats and specialty service, n.d.). All those formats and services have diverse functions to meet the needs of customers.
Thus, Shoppers Drug Mart suggests a broad variety of products for health, beauty and convenience. It has over 1,259 locations throughout Canada. Shoppers Simply Pharmacy includes retail pharmacies which are placed in the buildings of healthcare institutions. Such location allows them to provide customers with necessary medications, professional services and timely advice. Finally, Murale as one of the retail formats makes “an innovate beauty destination for those seeking unparalleled service and access to the world’s best beauty brands” (Retail formats and specialty services, n.d.). Murale is considered a luxury branch focusing on the advanced care and opportunity for high-level expertize and personal approach to service and care.
Specialty services comprise some more specific functions. Thus, Shoppers Home Health Care provides sale and service of “assisted-living devices, medical equipment, home-care products and durable mobility equipment to institutional and retail customers” (Retail formats and specialty services, n.d., par. 4). This service is organized through fifty-six store locations. Another service is Specialty Health Network. it was created to support patient with chronic diseases or acute conditions with complex drug therapy. Finally, MediSystem Pharmacy supplies pharmaceutical goods and innovative services. This service is aimed at the residents and patients in long-term care facilities, retirement communities or organizations that deliver specialized care (Retail formats and specialty services, n.d., par. 6).
In fact, the existence of the company’s various retail formats and specialty services are an example of customer segmentation which is an integral part of work with consumers in a big retain corporation. Customer segmentation is a strategy used by the companies providing the market investigation. It is necessary to single out the particular categories of customers united by some characteristics. It is vital for the company’s functioning since the segmentation provides an advantage of understanding the particular needs and demands of consumers and thus enables their satisfaction. Some companies can try to embrace the needs of the whole market.
However, such approach is not efficient but time-consuming. On the other hand, corporations which select customer segmentation approach, get certain benefits. They can focus on certain target categories. Thus, companies can discover the needs and interests of these categories more carefully which will increase their competitive ability. The segmentation approach suggests the consideration of consumers’ peculiarities and not treating them as all alike personalities. As a rule, customers are sensitive to company’s attitudes and segmentation through addressing their particular features and characteristics is going to attract customers’ attention to the company and its products or services.
The segmentation approach used by Shoppers Drug Mart proves the awareness of the company that the customers have diverse needs. As a result, the company provides services and develops varied retail formats to address different segmentation characteristics such as geographic, demographic, needs segmentation, etc. Geographic segmentation is probably the first one realized by Shoppers Drug Mart Corporation. It is revealed in the number of retail shops throughout the country.
Thus, there is a retail network of 1,259 “associate-owned locations providing a broad range of products and services in health, beauty and convenience” (“Retail Formats and Specialty Services”). Demographic segmentation is implemented in one of the retail formats.
It is Murale which is mainly designed for women since it focuses on skin care and beauty issues. Needs segmentation is addressed by Shoppers Drug Mart trough specialty services. Thus, the company provides medical equipment or home-care appliances at Shoppers Home and Health Care; it suggests pharmacy services for ill people through Specialty Health Network; and provide pharmaceutical goods for individuals who need long-term care in special facilities or retirement communities (Retail formats and specialty services, n.d.).
The advantages of customer segmentation for Shopper Drug Mart include customer attention to the services provided. Moreover, the fact that the company is in leading position in the pharmacy and personal care market of Canada is the proof of the efficiency of the selected business concept and the company strategies.
Influence of the Selected Business Concept on Functional Areas
In any business, the functional arrears are interconnected and interdependent. The changes in one sphere cause alterations in the others. Thus, the diverse retail network of Shopper Drug Mart Corporation has a significant impact on the company’s functional areas. The development of such network is an attempt of company to address various needs of its customers. In fact, the company tries to make its stores together with the whole network comfortable for different categories of population.
It is an efficient approach which favors the increase of customers’ satisfaction. Another field of retail network impact is the company’s marketing. As a big retailer, Shoppers Drug Mart targets different consumer audiences which can be accessed through various channels. Customer focused marketing strategies are considered to be the most effective (Rousseau, 2012). Thus, the retail network developed by Shoppers Drug Mart attempts to meet the needs of diverse populations.
Here belong people concerned about their health or beauty, patients suffering from acute or chronic conditions, residents of long-term health facilities, and so on. The company pays much attention to the exploration of innovative ways to meet the needs of its individual customers as well as the whole healthcare system. To achieve this objective, Shoppers Drug Mart promotes certain empowerment of pharmacists in minor ailments (Shoppers Drug Mart, 2016b, p. 16). It should be mentioned that Shoppers Drug Mart supports the empowerment of pharmacist as the company believes that these healthcare professionals can address minor medical conditions.
This approach provides evident benefits for the patients. First of all, the access to care improves and there is no need to wait for a long time to get doctor’s advice (Shoppers Drug Mart, 2016b, p. 6). According to the survey, 83 percent of respondents reported the ability to start treatment earlier, 79 percent admitted the positive moment of avoiding unnecessary visits to a doctor, and 74 percent focused on convenience of consultation with a pharmacist (Shoppers Drug Mart, 2016b, p. 6).
As for the general benefits for Canadian health care system, they include the reduction of doctors’ office visits because of minor ailments which, according to statistics, comprised 18 percent of all visits to general practitioners (Shoppers Drug Mart, 2016b, p. 9). In the conditions of budgetary pressures observed in the contemporary health care, this contribution to the efficient use of resources is useful.
This marketing strategy also has a significant impact on the company’s business operations. Shoppers Drug Mart as one of the biggest retailers in pharmacy and personal care (Leading retailers in the pharmacy and personal care sector in Canada 2011, by market share, 2017), attempts to create a retail network that has stores and units in all communities throughout the country. The primary goal of the company is to achieve maximal outreach of population.
The development of a broad retail network has substantial impact on company’s finance distribution. Due to the existing approach, there is a necessity of heavy investments in the establishment of new locations and the development of numerous alliances (Retail formats and specialty services, n.d.). Moreover, the human resources management is also affected by the selected business concept. The development of a big retail network and innovative strategies of the company demand much attention to staff training as well as proper reimbursement of employees (Shoppers Drug Mart, 2016b, p. 4).
The Role of Retail Format and Specialty Services in Attracting Customers
Shoppers Drug Mart Corporation has developed an extensive network of retail formats and services offered to customers. In conditions of competitive marked, it can become a significant advantage. The wide range of company products which include beauty, health, and convenience services, the company can reach a wider audience of customers with diverse interests and priorities. In addition, the opportunity to buy all the necessary goods in one store is appealing to customers and contributes to their loyalty. On the other hand, a variety of retail formats which is convenient for the customers allows the company to satisfy the needs of the majority of local populations.
For instance, Shoppers Simply Pharmacy units are located in medical buildings and clinics. Thus, they enable customers to buy the necessary pharmaceutical products immediately after a doctor’s consultation or get other professional services and advice (Retail formats and specialty services, n.d.). Murale stores, in their turn, provide satisfaction of the beauty needs of customers. They suggest advice and services related to the progressive skin care and beauty.
Finally, the Shoppers Drug Marts as a core drug store retailer in Canada provides 1,259 locations throughout the country. Such broad distribution enables the customers from any location to access a pharmacy shop for service in health, beauty and convenience not far from their office or house (Retail formats and specialty services, n.d.).
What is more, the variety of specialty services provided by Shoppers Drug Mart attracts more customers suffering from chronic diseases and conditions. For example, Shoppers Home Health Care provide assisted-living devices and equipment to suit a diversity of needs. It has more than 50 store locations to provide access to a wider consumer audience. Specialty Health Network, which is another specialty service suggested by Shoppers Drug Mart, provides support for complex drug therapy for patients. Finally, MediSystem Pharmacy takes care of the needs of patients living in long-term care facilities (Retail formats and specialty services, n.d.).
In addition to Pharmacist Interventions in Minor Ailments, Shoppers Drug Mart suggest Pharmacist Interventions in Medication Adherence provided in Sustainable Solutions Report (Shoppers Drug Mart (a). This intervention addresses the issue of taking the medications as prescribed which appeared to be a problem. The research revealed the fact that about 50 percent of Canadians with various chronic diseases “are not adherent to their medications” (Shoppers Drug Mart, 2016a, p. 4).
What is more, 69 percent of hospitalizations connected with medication have non-adherence as a primary reason (Shoppers Drug Mart, 2016a, p. 6). It is evident that health complications which are the result of non-adherence should be treated within a hospital. Such hospitalizations cost health care budget the amount of 7-9 billion dollars annually (Shoppers Drug Mart, 2016a). The company supposes that pharmacists as medication experts contact hundreds of thousands patients every day and thus they can be helpful in adhering patients to medications they need (Shoppers Drug Mart, 2016a). Such intervention is likely to have a positive influence on patients’ health and stimulate their responsible attitude to the process of treatment.
The service suggested by Shoppers Drug Mart includes new prescription call-backs and refill reminders. It is reported that “the phone counseling interventions also reduced the risk of all-cause mortality from 18% to 11%” (Shoppers Drug Mart, 2016a, p. 12).
Since the needs of patients are different, the company employees provide personal consultations to solve the problem of medication adherence. For example, a pharmacist can provide a consultation on the side effects of this or that medication which worry the patient. A pharmacist can assist with medicine prescription through contacting a physician in case a personal meeting with a patient is not possible. moreover, Shoppers Drug Mart is currently developing “new methods of renewing prescriptions for patients” to simplify staying adherent to their medications (Shoppers Drug Mart, 2016a, p. 17).
Thus, in 2016, the company was planning to introduce a new digital adherence platform. There is additional service for patients who have to take many medications during the day. A pharmacist can organize the necessary medications in compliance packs. It helps patients to avoid mistakes in taking the prescribed medicine which can be dangerous for their health (Shoppers Drug Mart, 2016a).
Shoppers Drug Mart conducted a research on the influence of compliance packs on cardiovascular disease patients’ adherence to treatment. The primary research revealed the statistics that about 25 percent of Canadians newly diagnosed with hypertension are not able to fill their prescription (Shoppers Drug Mart, 2016a). However, the study proved then increase in adherence rate from 84% to 94% among hypertension patients after a half-year application of compliance packs. It is a positive tendency because 22.7% of Canadian citizens older than 20 are diagnosed with hypertension (Shoppers Drug Mart, 2016a).
Thus, medication adherence problems of Canadian citizens can be addressed by the services provided by Shoppers Drug Mart. They include medication reviews, patient follow-up phone calls, assessment, adaptation and renewal of prescriptions, and provision of compliance packs/
On the whole, the variety of products and services offered by the company, the diversity of store formats, and the convenience of locations make Shoppers Drug Mart an attractive provider of health and beauty products and services in Canada.
Maintaining the Market Share
The market share is one of the factors which proves the success of the company and the correct choice of a business concept. In case with Shopper Drug Mart Corporation, its significant decision to follow the superstore format was decisive in capturing a significant market share. Thus, as of 2011, then market share of the company was 31.8% which provided a leading position in the pharmacy and personal care sector in Canada (Leading retailers in the pharmacy and personal care sector in Canada 2011, by market share, 2017).
Superstores are multi-functional stores that suggest a wide range of products instead of focusing on a single specific segment of the market. For example, Shoppers Drug Marts’ customers can purchase products in beauty, health, and convenience in one shop. It satisfies a diversity of customers’ needs which in its turn improves the ability of the company to maintain a leading position in the pharmacy and personal care market which is among the most competitive ones (Warnica, 2013, para. 5).
The variety of goods which can be purchased in the same store is attractive for customers since it allows people considering different options and choosing the product that fits their needs best of all. Offering various categories of products in one shop has one more advantage. It eliminates the need to visit several different shops in order to purchase all the necessities and thus saves the time. That is why the majority of customers prefer to shop at superstores to many small shops.
One more specific feature that helps the company to maintain the leading positions in the market share is the high availability of Shoppers Drug Mart stores. There are more than 1250 stores located across the country which guarantees the access to the stores to customers in any locations. As a result, these features make shopping at Shoppers Drug Mart stores more convenient to consumers. In influences the development of their loyalty which also has a positive impact on the preservation of company’s market share.
Conclusions
On the whole, it can be concluded that Shoppers Drug Mart has an efficient retail network. The proper selection of a business concept and outline of priorities took the company to the leading positions in the market. The application of customer segmentation approach enabled Shoppers Drug Mart Corporation to study their target audience and thus satisfy the needs of diverse Canadian population. The company is a national leader in pharmacology with a retail network of more than a thousand locations throughout the country. The company’s attention to different formats and provision of specialty services attracts more customers.
The variety in retail network and diversity of products and services has a significant influence on other functional areas of the company. This impact should be considered in case the changes in the retail network are necessary because the company is a single organism with interconnected and interrelated components. One of the aspects which should be carefully considered by the company is the investment issue. A company with such a huge retail network needs to invest heavily in the development of a diverse and efficient network.
Another aspect to consider is the human resources. Since the company is developing and expanding, it needs to focus on the development of the staff to meet the needs of the growing network of retail locations. Moreover, the innovations introduced by the company such as pharmacist interventions in minor ailment or medication adherence also demand well-trained professionals. These interventions contribute not only to the company’s image on the market and popularity.
They have a positive impact on the country economics because they reduce the number of unnecessary visits to a doctor and in general improve the health condition of the nation. On the whole, Shoppers Drug Mart Corporation has perspectives for sustainable development of the business. The company can consider cooperation with leading grocery retailer, for example, to strengthen its position both in the national and international markets.
Moreover, Shoppers Drug Mart should pay even more attention to the issue of customer segmentation because the market today is very flexible. That is why it is important to trace the emerging trends not only to stay efficient and maintain the leading positions, but to enhance the business and provide its steady development in the conditions of competitive market.
Appendix
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