Duane Reade Focusses on Service and Convenience — With a Healthy Dash of Style

(NEW YORK) – As retailers trudge on towards what looks to be an only slightly improved holiday shopping season over last year, there are some who have ignored the usual retail benchmarks and instead have focussed on recalibrating their offer and retail experience.

The biggest winners have been the convenience and so-called dollar stores. Walgreens Co. posted a 4.9% growth in comparable-store sales for the month of October 2009. Comparable store front-end sales increased 4.7% for the month. Meanwhile discount convenience stores like Dollar General began an aggressive expansion plan and recent IPO offer. Dollar General operates about 8,700 stores in 35 states, most in small towns with an emphasis on low-income neighborhoods. The company plans to open about 600 new stores next year and remodel or relocate another 500.

But all eyes are on New York-based Duane Reade which recently opened a new retail concept in Herald Square that draws heavily from specialty retail stores. The two-storey, 24-hour store is zoned with sections such as “Apartment Living” that is customized to the needs of the everyday New Yorker: cleaning supplies, lightbulbs, even convenient meals. Frozen foods and grab-and-go meals include Duane Reade’s own “DE-lish”.

Duane Reade’s new “LOOK Boutique” on the second floor

But it’s the store’s second floor that manages to offer an intriguing alternative to shopping in crowded department stores, with a high-design beauty and health department. The “LOOK Boutique” is similiar in concept to European drugstores and includes such Euro-chic brands such as La Roche-Posay and Vichy, along with the more traditional U.S. mainstays of Maybelline and Cover Girl. The difference is in Duane Reade’s use of individual makeup stations and tips-and-tricks information signage.

In their effort to remain 100% New York-centric, the store’s walls are covered with “50 Things We Love About New York.” This is a brand that listens to its customers and rigorously focuses first on service and convenience, and then invites them to linger with discovery zones. But fast on their heels is CVS and Walgreen’s each ready to use their national strength and clobber anyone in their path — R.I.P. Long’s Drugs.

Convenience retail has no place to go but up, but other retailers could take a page from how they make service and convenience a priority, with style a subtext to the customer experience. What could clothing retailers learn from this? Plenty. Stay tuned for my next post on the subject.

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