Brooks, CVS embrace transition with pharmacy focus

Drug Store News,  Sept 13, 2004  by Tony Lisanti

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The transition of the Eckerd stores into Brooks and CVS is under way. And the recent National Association of Chain Drug Stores Pharmacy & Technology Conference in San Diego underscored the most critical factor in the process and ultimately the success of both conversions.

First and foremost, the most critical factor is the pharmacy. When J.C. Penney announced its desire to sell the Eckerd chain, several aspects of the retailer's operations began to suffer. From various internal issues among employees related to uncertainty about the future to customer service to out-of-stocks and other operational challenges, customers were lured to other chains, and the core pharmacy customer franchise began to decline.

Now, as the metamorphosis is under way, both Brooks and CVS have identified pharmacy as the primary area they will focus on first as they begin to re-establish trust among existing customers and as they also begin to reach out to former customers to bring them back to that specific Eckerd store location that they once perceived as convenient and valuable.

For example, Brooks already has implemented one subtle but significant change to Eckerd in an effort to reaffirm the brand's strength, the strategic focus and customer connection. Gone are the clever Eckerd tag lines in favor of the simple addition of one word: pharmacy. So in all circulars and store signage, the chain now will be referred to as "Eckerd Pharmacy."

In fact, as the conversion of Eckerd stores shifts into full throttle this fall, there are several other factors--in addition to the focus on pharmacy--that will be critical to the success of CVS and Brooks. And you will read about those factors more extensively and exclusively as Drug Store News takes the leadership role with two special issues that will analyze the strategies of both Brooks and CVS as they incorporate Eckerd with their respective companies. Among the critical factors are:

* Culture. Both CVS and Brooks, although diametrical in size, have strong cultures based on the philosophies, of leadership that their executives believe in. Therefore, the transition is less about a company creating a new culture and is more about communicating and transferring the values of existing cultures to the former Eckerd family. And all indications are that the Eckerd personnel not only will welcome, but will embrace the Brooks and CVS cultures quickly as they look to be, once again, part of a viable growth organization and regain the pride they had during the heyday of Eckerd.

* People. The creation of an infrastructure to handle the addition of Eckerd stores is critical to the transition. And the process of reorganizing headquarters, field and store personnel is well under way at both chains.

* Operations. Both Brooks and CVS have been recognized as efficient operators focused on high instock levels. Because of its size and national network, it might be a more seamless process for CVS to convert and assimilate information technology systems and distribution. For Brooks, on the other hand, the assimilation of Eckerd systems will be a longer and more complicated process that will leverage and integrate the best of the Eckerd process with the best of the Brooks system.

* Value. While much of the emphasis will be on the aforementioned factors, both Brooks and CVS also must continue to deliver the value message to the Eckerd customers in order to retain them. As they fight for market share, both chains must communicate their respective messages quickly and directly to maximize the so-called upside both chains envisioned when they handed over billions Of dollars for the Eckerd stores.

In those upcoming special issues, Drug Store News will provide comprehensive analysis, insight and details about these chains and how the Eckerd deal is impacting the chain drug industry in what is clearly the biggest development of the decade.

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