Walgreens doubles down on 'flagship' neighborhood pharmacies

Walgreens, which has had a fairly tumultuous year following a dispute with Express Scripts over allowing dispensing of prescriptions originating through the latter’s network, is continuing its attention-getting transformation of neighborhood pharmacies into “America’s first choice for health and daily living,” as the company’s press releases put it. In November, it opened what it calls a “flagship” store at the corner of Hollywood and Vine in Los Angeles; that was preceded by the opening of a store in the Bucktown/Wicker Park neighborhood of Chicago. That location (see photos) is eye-catching for being tucked into a landmark 1919 neoclassical bank building; the “Vitamin Vault,” in the bank’s actual vault, has product displays in the walls of security boxes of the vault. It also provides “hand-rolled sushi and sashimi,” “on-the-go meal options,” a bakery, and a LOOK Boutique beauty department. The pharmacy section features iPad-equipped customer stations, consultation rooms and an express checkout kiosk.

The Los Angeles store has a similar layout (apart from the bank features), and is the first US presentation of No7, a skincare brand from the UK. Walgreens announced a strategic relationship with Alliance Boots, a leading retailer and drug distributor in the UK, earlier in 2012; that brand of beauty products was one of the items noted by market analysis at the time. No7 will join what Walgreens calls “prestige and niche cosmetic, skincare and haircare brands not typically found in drugstores.”

How will all of this affect the dispensing of pharmaceutical products? It’s hard to say as yet—it’s still early in the game. Walgreens’ fiscal 2012 revenue just about matched its 2011 revenue (which is to say, it was flat); the effects of the since-resolved Express Scripts dispute were felt in lower in-pharmacy sales; and the availability of more generic products affects all retail pharmacies’ operations. At the same time, Walgreens has announced an ownership stake in a specialty pharmacy (Cystic Fibrosis Foundation Pharmacy LLC), and has been building out both its specialty-pharmacy network and its Take Care in-store health clinics. The blending of “health,” “wellness” and “beauty,” as concepts that draw the attention of consumers, will be an interesting experiment in pharmaceutical marketing.