Richmond, BC-based London Drugs continues to expand its footprint in Canada with the recent opening of a new large storefront at Southgate Centre in Edmonton.
And it continues to invest in the largest capital initiatives in the company’s history starting two years ago for multi-million dollar, multi-year projects which will redefine London Drugs’ future.
The brand will have 80 stores from BC to Manitoba by the end of this fiscal year, said Clint Mahlman, President and Chief Operating Officer of London Drugs.
He said one more store will be added in southeast Calgary in the Shawnessy area.
“We’ve been focusing on some of our major initiatives and some relocations. So we haven’t been focusing or opening a lot of brand new net locations,” added Mahlman. “The COVID recession showed that a lot of locations, a lot of retailers that were over-extended, ended up having to close a bunch of stores as well.
“We’ve never been a company that was about having a lot of stores in every corner. We’re not a convenience location. We’re more of a destination location.
“It’s been a long philosophy about having a lot of stores. We know that there’s retailers that are very convenience driven. We know that there’s retailers that are destination. We tend to fall somewhere in between the two locations. You’re not going to find a London Drugs in every corner like say a Shoppers or a 7-Eleven. That’s not our model. Partly because we carry very different inventory than say Shoppers or a traditional drug store, most notably our technology inventory. Because we generally have a bigger store footprint and the fact that we’re also a very successful ecommerce player, it’s not really for us about store count. We’re a private family enterprise so it’s not about store count or those kinds of things.”
Mahlman said London Drugs has been investing in the largest capital initiatives in the company’s history starting two years ago for several multi-million dollar, multi-year projects. The Galileo project is replacing most of the company’s major systems from finance through to stores to the distribution centre and customer engagement. Ultimately it’s to enable more automation, artificial intelligence, all with an eye to better customer experience. The Da Vinci initiative is about defining what will the customer expect from a store in 2035 and allow them to live their very best lives. The company has done a ton of research in the market about what that means, speaking with customers about what they will need in the future from a physical location.
According to the company, the Galileo Initiative is much more than IT system upgrades and replacement of old processes. It’s reformatting how it will interact with its customer in the future in all aspects. This initiative will focus the company on the customer more intensely than ever in its 75-year history, making them the centre of all that the retailer thinks of, focuses on, and builds processes around.
“One of the key lessons from the pandemic has been that our inefficient processes which over-rely on more labour hours to move processes along and to deal with the unplanned swings in volume, really hurt the company. Any processes in the company that do not add a value to what the customer ultimately seeks and is willing to shop with us over another company for, must be simplified or removed to bring all our resources to the customer benefit,” said London Drugs.
The company said Project North Star will cover the replacement and streamlining of technology and processes from the point of contact with the customer, merchandising, marketing, and through the back office of accounting.
Project Compass will cover how it deals with managing the physical supply chain flow of goods from the point of acquisition to the customers’ hands in-store and to their home. That entails modernizing and monetizing its systems used in the distribution centre and how it currently warehouses and distributes product.
Project New Horizon will be the project to refocus its LD Extras program, re-imagine what it can be, and replace the background technology, moving to find a better way to interact with the customer more intelligently at every point of contact.
Project Corona Borealis is a project implementing intelligent automation where the company can before other systems can be integrated.
The Da Vinci Initiative will help the company define the many questions about its store design for the future: What is the future of retail? How does London Drugs create a more consumer-centric experience? What role will sustainable innovations play in the retail experiences of tomorrow? How can its retail environment transform habits for the better? How can London Drugs be at the forefront of intersection of health, wellness and technology, health innovation and health literacy for the next decades? How can it create a wow experience that customers won’t stop talking about? How does it become the centre of the community and neighbourhood it serves?
“Both of those are very exciting and redefining the future for London Drugs. We do have a couple stores that we will be relocating within the same neighbourhoods but for right now our goal is to ensure that we have these renewed efficiencies and capabilities that come from these two big initiatives before we go on any major expansion plans,” said Mahlman.
Mahlman said the retail industry is going through a period where external events drive innovation and it’s causing retailers to think about how they capture the customer.
“That’s always been true whether it’s been a recession, whether it’s been a collapse of sales through COVID, or expansion of sales through COVID, or boom/bust economies. Retailers have always had to adapt to times like this. I think this is what makes retail such an exciting industry,” he said.
“I think what makes now such an interesting time for retail is that the customer has gone through a lot these past couple of years and they’re nervous. They’re nervous about the health of the economy, the uncertainty about whether COVID will return with more restrictions this fall, their personal budgets are stretched due to inflation and government cost increases.
“And consumers, it’s causing them, as they always have, to reassess what’s the best value for them personally and their household in any particular category. Right now, retailers that are keeping very close to their customer – we have a philosophy of trying to solve our customers’ problems before they know they have them – and retailers that are trying to make customers’ lives less complicated, by doing that, companies like us through these big initiatives investing and enabling technologies, whether it’s a lower cost of operation or living up to the potential of more personalized experiences, they’ll continue to do well in the long run.”
He said the COVID impact showed that those retailers that couldn’t move on a dime are most vulnerable.
“We saw some outstanding retailers that were lauded in the press about how great they were and how they responded but if they either weren’t financially built to weather a storm or couldn’t turn on a dime to focus on the immediate needs of the customer, you’re vulnerable,” added Mahlman.
“For us at London Drugs that’s why we’ve always focused on the very long-term and it’s one of the benefits of being a privately held family company. Our focus has always been trust, brand love – we won again British Columbia’s most loved brand and that’s of any industry not just retail. We also have a uniqueness that we focus on being our vendor’s best retailer . . . We’ve always believed that it’s not about the amount of doors that you open . . . but if you work really strongly and collaboratively with vendors and show that together that you really do care about the customer and the customer sees how you treat their community, how you treat your people as an employer, how you treat the environment and how you treat them as a customer, in times like this those things come back with customer loyalty.”
London Drugs began in 1945 with a small 1,000-square-foot community drug store on Main Street in Vancouver.
