Shoppers Drug Mart, Canada-wide Store Analysis & New Concept Store Development.
Shoppers Drug Mart is one of Canada’s largest retail chains with nearly 1,000 stores. Last year Talbot Consultants International Inc. was retained to conduct a detailed analysis of all their existing stores and to provide recommendations for the optimisation of existing store operations as well as to provide input into the development of their new “next generation” store concept including the introduction of a significant cosmetics department and a convenience food department. At this point we have completed four phases as follows:-
Phase 1:- Data Gathering & Integration
This initial phase commenced with a one day workshop with senior Shoppers Drug Mart executive staff and the in-house analysts to obtain a through understanding of their current “in-house” methodologies and their most recent “out-house” consultant studies so as to avoid any duplication of effort and ensure a “seamless” transition to our assignment. Among the data reviewed & delivered were:
- Shoppers Drug Mart store database.
- Sales by store major department (i.e. Scripts, Cosmetics & Front Store).
- Sales by store by Convenience sub-department.
- SKUs by major department & sub-department.
- Raw CSP data (including “at home” sales).
- The relevant CSP categories for major department potential.
- The relevant CSP categories for Convenience potential.
- The relevant CSP categories for “core” potential.
- The relevant CSP categories for “other” potential.
- Health Watch data by Province (except Quebec).
- National RX potential by Province.
- Optimum card customer data by store.
- Doctor location database.
- Hospital location database.
- Major competitor database (including department stores & supermarkets with pharmacy).
- Relevant site variables by store (i.e. traffic counts, parking, adjacencies, selling space, opening hours etc.).
- Integration & utilization of our Neighbourhood LifeCycles™.
- Shoppers Drug hardware & software requirements.
Phase 2:- Presentation GIS:- Acquisition, Customization & Implementation
In Phase 2 we were required to acquire & customize five copies of MapPoint that could be utilized by Shoppers Drug staff "in-house" with minimum "out-house" involvement by us. Our Phase 2 tasking therefore was to acquire the five copies of the MapPoint software, carry-out the required customization (i.e. mapping all Shoppers Drug Mart Stores and all relevant competitors, including department stores & supermarkets with pharmacy, Canada-wide) and conduct the "in-house" training process. The objective was that Shoppers would have a “user friendly” presentation GIS (both software & database) that could be utilized by their staff with minimal training and/or input by us.
Phase 3:- Chain Wide Market Potential Analysis
In this phase we utilized the data gathered in the first two phases to conduct a market potential analysis of each of the three major departments (i.e. Scripts, Cosmetics & Front Store and, where applicable, the Convenience sub-department of Front Store) for all stores chain-wide. The resultant template was provided in MapInfo format for all DAs in Canada. Our methodology was based upon the following data :-
a. Health Watch Data (counts and dollars by Province) .
b. Age Groupings.
c. National RX potential by Province.
a. CSP Cosmetics potential.
b. Shoppers Drug Mart Cosmetics sales dollars by store and by DA.
3. Front Store
a. CSP potential for Front Store & Convenience.
b. CSP potential for “core” & “other”.
c. Shoppers Drug Mart Front Store sales by Front Store & Convenience (sales dollars by store & DA).
d. Shoppers Drug Mart Front Store sales by “core” & “other” (sales dollars by store and DA).
Phase 4:- Pre & Post New Format Stores Trade Area Analysis
In Phase 4 we were tasked to conduct a GIS based analysis of the trade areas of the thirty-five new format Shoppers Drug Mart stores across Canada and compare them with each of the former old format stores so that the impact of the new formats could be quantified. In each case we were required to analyse the three major departments (i.e. Front Store, Cosmetics & Scripts). This project was conducted in three tasks for both the new format and old format stores as follows:-
Task 1: Distance Decay Curve
Task 2: Drive Times Analysis
Task 3: Trade Area Demographics (i.e. population, income & ages).
As a result of our recommendations Shoppers Drug has become one of Canada’s most successful retail chains with a recently reported profit increase of more than 22%.