By Allison Collins and Jenny B. Fine on January 28, 2021 || WWD
As consumers come into Walgreens’ doors, there’s opportunity to evolve the beauty department, sources said.
Walgreens Boots Alliance is slated to play an integral part in the U.S. rollout of the coronavirus vaccine, and it’ll be doing so under a new chief executive officer — Rosalind “Roz” Brewer.
With the appointment, Brewer, most recently the chief operating officer of Starbucks and a former Walmart executive, becomes the only Black woman to lead a Fortune 500 company. She takes over from outgoing CEO Stefano Pessina on March 15. Pessina, who is WBA’s largest single shareholder, will become executive chairman.
COVID-19 vaccine distribution — which Walgreens partnered with the Centers for Disease Control and Prevention to play a hand in — is off to a rocky start and is expected to be Brewer’s immediate focus. Beauty, while important to Walgreens’ overall proposition, is expected to fall lower down the priority list.
“Top of mind for her will be the vaccine distribution — that is the focus of everything,” said Lisa Price, founder of Carol’s Daughter. “But at the same time, you will have a captive audience in the store, and how do you help make sure customers get the most out of their trip and make the experience as safe as possible while we get to herd immunity.”
While not the central focus, increased customer traffic is expected to have a positive impact on beauty if Brewer can marshal the forces.
“Certainly as we come out of the pandemic, [beauty] will become a much more important priority for the business,” said Neil Saunders, managing director of retail for GlobalData. Walgreens and other drugstores have to “chew gum and walk at the same time,” he said, meaning that they need to pay attention to the health-care side while managing retail operations.
Saunders said that under Brewer, Walgreens has “a major opportunity” to do more in beauty, especially because of owned brands like No7, Soap & Glory and Liz Earle. But right now, he classified Walgreens’ U.S. beauty offering as “poor” and said that Boots beauty setup in the U.K. has also gone downhill.
“Boots is not as good as it used to be. The store proposition is pretty weak and they’ve not really invested in stores,” Saunders said, singling out the new Boots Covent Garden store as an example of a good and “elegant” setup. “We’re in the middle of a pandemic, so you can excuse them for not doing much at the moment … [but] beauty is in large part about aesthetics, it’s about making people feel good. You can’t make people feel good in a shabby store with bad lighting and tacky fixtures.”
Debbie Perelman, CEO of Revlon, agreed that Brewer has an opportunity to reinvent what beauty looks like in drugstores, and rethink its online-offline approach.
“The retail and beauty industry overall will need to reinvent, reimagine and readjust to consumers’ habits and demands, especially due to how COVID-19 has accelerated many consumer trends,” she said. “This includes the ramp up of online shopping, but also the overall blurring of online and offline channels, how retailers and brands can create engaging environments for the consumers, regardless of where they purchase.
“The largest opportunity is the ability to digitalize and personalize a differentiated beauty experience,” Perelman continued, “thus ensuring a cohesive and engaging experience, wherever consumers choose to shop, online or offline.”
“…you can order online and have it delivered in a day, two days, two hours, depending on where you live. COVID-19 has really accelerated that. That’s what the drugstores now have to recognize — their convenience play is nowhere near enough to build a future around.” — Wendy Liebmann, CEO, WSL
Brewer’s experience bodes well for her success in effecting a transformation, say those who know her. “Her operational talent is probably best in the world — she is that good,” said Steve Stoute, CEO and founder of Translation and UnitedMasters. “She is a best-in-class leader in corporate America who will help deliver Walgreens results and success that will surpass expectations.”
Stoute worked with Brewer when Starbucks founder Howard Schultz tapped him to help the company address the crisis resulting from two Black men being arrested at a Starbucks in Philadelphia in 2018.
“I watched Roz deal with and lead that company in time of real issues,” said Stoute. “She understands the climate. She is in lock-step with the culture. She gets it.”
“Roz Brewer is much more focused on taking a business and growing it through understanding the customer and trying to bolster things operationally — that change in focus is really helpful and that’s why it’s such a good appointment. It’s not only a fresh pair of eyes, but it does signal a big change in approach, which is exactly what is needed,” said Saunders, who characterized Pessina as a leader focused on deals and M&A.
Andrew Stanleick, executive vice president of Coty Americas, agreed. “A proven leader, she no doubt will bring a strong vision to one of our most important mass beauty retailers,” he said, “and will add a perspective that has been sorely underrepresented in the industry and overall business leadership.”
L’Oréal USA CEO Stephane Rinderknech said, “Walgreens is one of L’Oréal’s most strategic business partners and we have long been committed to the growth of the beauty category in the pharmacy channel by meeting the diverse beauty needs and dreams of consumers. We are excited to continue our work of co-creating the future of beauty retail at a time when the pharmacy channel is central in the beauty, health and wellness journey of consumers.”
The ability to drive change and create meaningful differentiation in beauty will be key to Brewer’s success. Her appointment comes at a time when key competitors are bringing meaningful innovation to the retail environment, whether doubling down on wellness, as CVS and Rite-Aid have done, or partnering with third-party retailers, as Target did with Ulta Beauty, to increase its appeal.
Walgreens stores are still based around the idea of convenience, even as online shopping skyrockets, Saunders said. But for beauty at Walgreens to pick up, Brewer and the WBA team will need to think about making the stores a “destination,” Saunders said.
“They’ve always had the advantage of being on the street corner, and that was convenient for a lot of time,” said Wendy Liebmann, CEO of WSL Strategic retail. “Increasingly, that’s not been the case, you can order online and have it delivered in a day, two days, two hours, depending on where you live. COVID-19 has really accelerated that. That’s what the drugstores now have to recognize — their convenience play is nowhere near enough to build a future around.”
That doesn’t necessarily mean Walgreens should be executing a partnership like Target and Ulta Beauty or Sephora and Kohl’s, but it could mean rethinking widespread non-Walgreens distribution for owned beauty brands including No7 and potentially partnering with more niche brands and Black-owned beauty brands going forward, Saunders said. Liebmann suggested the company focus more on “local market personalization” for beauty.
One industry source noted that the retailer is behind its peers in marketing and merchandising Black-owned brands and products that are geared toward a wide variety of hair textures and skin tones. “Walgreens has been working to do better, but there is still much to be done,” said the source, adding that skin care geared toward Black consumers is a real area of opportunity.
“When it comes to Black women in skin care, there needs to be more diversity and development and innovation,” said the source. “That is not being had yet, and it’s critical.”
Walgreens should also rethink beauty’s presentation in stores and online, Saunders said. “When you’ve got beauty products, you can’t present them as commodities,” he added.