Inside This Issue - News
Mahlman will build on London Drugs’ strengths
July 7th, 2014
by Alasdair McKichan
VANCOUVER, British Columbia – In a survey conducted by Ipsos Reid North America for BCBusiness magazine, British Columbia residents voted London Drugs the clear winner in a poll conducted early this year to find the province’s most loved brand. British Columbia is the province where London Drugs was founded and where it has its highest concentration of stores, but it is likely the company would also score high in customers’ ranking in the three other western Canadian provinces in which it does business were similar surveys conducted in them.
Interviewed recently here, close to the London Drugs headquarters in suburban Richmond, Clint Mahlman gives most of the credit for the company’s high status with the consumer to the relationship its people have with its customers and the company policies that have encouraged and facilitated that relationship.
Mahlman was appointed to lead the chain with the title of executive vice president and chief operating officer in February, succeeding London Drugs’ long-serving chief executive officer, Wynne Powell. There will be no need for Mahlman to take time to acclimatize himself to his new responsibilities — he assumes them after 30 years’ service with the company, beginning as a part-time stock clerk while he studied at British Columbia Institute of Technology.
Mahlman’s progress through the management ranks has given him an all-round view of the company’s retail functions and how these mesh with the professional pharmacy part of the business. He has served in management as store manager, district manager, vice president of human resources and distribution and vice president of operations and distribution, and in 2010 was appointed vice president and chief operating officer before assuming his present role this year.
“The majority of our customers visit our stores once a week,” says Mahlman.
These customers come from every demographic in the populations who live in areas with reasonable access to a London Drugs store, but Mahlman singles out three sectors that are particularly attracted to the company. In the first group fall older consumers with above-average income and a relatively high level of education and whose children are grown and are away from home. Members of this group are time impoverished, and they take advantage of the full shopping experience that the company can offer.
The young demographic make up the second group of heavy, regular shoppers. They are starting out in their careers, they do not yet have children and they find the company’s technological offerings particularly attractive.
The third group of very loyal shoppers are young families. They find London Drugs satisfies not only their needs for all the health and household commodities such a new family requires but also find attractive the company’s support for sustainable products and its policies and actions in support of a clean environment. They shop for wellness products with particular attributes such as those that are gluten free or chocolate with ingredients supplied on a fair trade basis. They also shop for technology based products and they like the unique and novel items the chain searches out and brings to market.
Store customers and those not within reach of a London Drugs outlet also shop from the company’s ever more popular website.
The company’s unusually large stores and the unusual lineup of categories, which includes computers, audio, small appliances, smartphones and tablets, photographic equipment — all carried not just with token representation but with deep selection — make it unique not just in Canada but probably in North America for a company that is primarily described as a “drug store.”
However unorthodox the merchandise mix, customers have not just become accustomed to it, they welcome it, according to Mahlman. London Drugs plunged into the electronics world when it was in its infancy and, as it blossomed, so did the company. The chain has benefitted from the development of the home office that has become so much of a commonplace in recent years.
Mahlman says that when customers hear or read about a new product they tend to turn to London Drugs in the expectation of finding it there. The company’s buyers do not just go out to acquire merchandise that has become popular; their creed is to go after products that they forecast will become popular.
London Drugs responds attentively to a variety of market segments; particularly in the lower mainland of British Columbia there are large populations of immigrants from South Asia and Southeast Asia. Customers from those ethnic groups often favor cosmetics and nail products in nontraditional, brighter colors. Environmentally conscious consumers find that London Drugs encourages their attitudes and preferences by offering products with natural ingredients and generally gives prominence to sustainable brands.
Service departments, led by the pharmacy, are the chain’s chief strength. The company has welcomed the new powers that are being given to pharmacists, according to Mahlman. Its professionals are taking full advantage of the opportunity that the new government attitudes to allowing pharmacists to play a larger part in health care delivery represents.
Mahlman records with pride that, in Alberta, where the extension of powers has gone furthest, two of its pharmacy managers have become the top pharmacist prescribers in the province.
London Drugs pharmacists have a long history of running educational clinics for patients in disease state management and in establishing credibility with local doctors through these efforts and in individual patient counseling, says Mahlman. Aiming at assisting its pharmacists to maximize their time with patients, the company has both been installing automated dispensing equipment wherever volume justifies it and employing registered technicians to assist pharmacists with the more routine part of their functions.
London Drugs stores often incorporate a Canada Post station. Other services less commonly offered in a pharmacy are automotive, travel and home insurance. They are traffic builders as well as being both profit centers in themselves and providing customers with convenience.
The three outlets in the company’s 78-store chain built since 2012 incorporate the new design ideas developed that year. Two more of the new model outlets are in development. The company is pleased with the performance of the new design, says Mahlman. The format permits good visibility for customers, enabling them to navigate easily through the store, and it incorporates learning centers used for customer information purposes in relation to both the pharmacy and consumer products.
No new store openings are planned for the current year. The retailer is instead concentrating on renovations and upgrades to established stores.
To date, London Drugs has not expanded beyond the four western provinces. It is constantly being asked, notes Mahlman, if it is not contemplating a move into Ontario, Canada’s largest market. Mahlman says he has little doubt that the company could succeed in Ontario.
He refers to the fact that Ontario customers already rank as the third-largest provincial customer group in its e-commerce business. However, it is not simply a case of putting up stores in a new market. The outlets have to be serviced, and that implies a need for a supporting distribution capability that has to be developed in tandem with stores.
London Drugs has been proud of its green credentials for many years. Sustainability has always been a hallmark of the company, says Mahlman. “Partly this is a result of the owning family’s values in taking care of the customer and being a responsible contributor to society. But it is not just all about ‘green.’ It reflects the concept of thrifty living, of making good use of resources.”
London Drugs offers its customers environmentally sensitive choices — unbleached and unscented paper products; computers built with fewer toxins; and food and cosmetics products with organic ingredients. It runs a “Bring Back the Pack” campaign encouraging customers to return to the stores all the packaging from their products — including Styrofoam. The drug chain also encourages shoppers to return their unused pharmaceuticals and over-the-counter medicines and diabetes supplies, including needles.
The company uses all the usual types of media, but recently it has been paying particular attention to social media, of which it was an early adopter. Mahlman says it is a useful way of talking to both customers and employees. But he is even more enthusiastic about the capability of this communication medium to perform as a listening tool.
London Drugs has made good use of that capability as it attempts to make sure its actions and policies are in tune with the expectations of its public. In communicating back and forth this way, Mahlman offers a piece of advice the company has learned through experience: Customers have high expectations about the speed of response. It pays to have the organization that allows immediate or very fast response.