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Drugstore operator Rossmann is investing in expanding its estate and modernising existing branches as it seeks to reach its €10bn turnover target.

Expansion and modernisation plans

Rossmann has announced investment of €215m in its store estate, both new openings and modernising existing stores.

The retailer currently operates 3,900 stores across seven markets in Europe.

A total of 175 existing stores will benefit from the revamp this year and the drugstore operator plans to open 200 new stores, both in Germany and internationally.

New store openings will have an increased sales area, c.700 sq. m, compared to existing stores which are on average 580 sq. m, designed to enhance the in-store experience for shoppers.

Challenging market conditions including high rental costs,  Rossmann's assessment  and optimisation of its portfolio will be ongoing.

In reach of €10bn turnover

This activity will help Rossmann reach its target turnover of €9.9bn in 2019, an increase on €9.46bn achieved in 2018.

The retailer has outlined that store investment is particularly relevant for the business, as online accounts for a relatively small proportion of sales.

See inside Rossmann's Cologne flagship

Retail Analysis subscribers can read and download our latest store visit report here.

Superdrug looks to add new beauty products to its range, launches beauty banks and rolls out in-store breast cancer consultations.

Seeking new beauty brands

Superdrug has announced its plans to host it Open House event again this year, which invites new beauty brands to meet the retailer's senior buying team.

The event will take place in May at its head office in Croydon.

The purpose behind the event being its ambition to boost its beauty product portfolio, in line with its priority to 'be the best in everyday accessible beauty'. As part of the event, a chosen beauty brand could receive a support package worth £100,000.

The package will also include a personalised plan co-created by the supplier and Superdrug's marketing team which may include features in DARE Magazine, promotion via Superdrug's social media channels, in-store promotion, CRM, in-store media support for example digital screen POS and launch features on store radio.

Superdrug has stated a particular interest in brands that are halal certified or brands that address eco-concerns. Simon Comins, Superdrug commercial director, comments: "We want to see brands from people that know their customer, care about the planet, are looking to spread the word about their passions and have products that will make us go wow.”

Giving back: Beauty Banks

Superdrug has teamed with Beauty Banks, a non-profit organisation that collects and redistributes personal care items to those in hygiene poverty in the locality of that store.

The retailer has launched Beauty Bank drop points at a selection of its stores.

Shoppers simply need to purchase an item from the wish list displayed on the Bank and deposit it on their way out. Items on the wish list include shampoo, deodorant, soap, toothpaste and razors.

This is a simple but effective strategy to encourage shoppers to give back and make a difference to local communities.

Leading in services: breast cancer consultations

Superdrug has partnered with breast cancer awareness charity CoppaFeel! to launch in-store breast checking consultations.

The launch follows research conducted by Superdrug which found that 82% survey participants didn’t feel comfortable talking about any changes in their breasts.

The move is designed to reduce this level of discomfort and promote awareness amongst young people to improve rates of early diagnosis.

The services were made available on 20th March in 56 of its store health clinics nationwide. The retailer hopes the new service will support over 100,00 women in its first year.

Shoppers are simply required to pre-book an appointment, before heading to the store to speak to a trained nurse about how to carry out examinations and recognise symptoms.

The move aligns with other developments we're seeing in this space, both in the UK and internationally. For example, Boots recently launched in-home health test kits, supporting customers in finding new ways to feel in control of their health and wellbeing.

In a similar move, US-based Walgreens is expanding its service offer, finding new ways to bring shoppers into stores and foster loyalty through services.

 

Want to know more?

Retail Analysis subscribers can read and download our latest insight on Drugstores here.

Rossmann, the German drugstore part owned by A.S. Watson, will begin selling products in South Korea in May, with products shipped directly from Germany.

Direct-to-market model

Rossmann plans to make “full-scale inroads into the domestic health and beauty market” of South Korea. A direct-to-market business model will be adopted, rather than stocking goods in stores. It is not clear when Rossmann will open its physical stores in the country.

The direct market plans to provide stable services to consumers by establishing a faster logistics system and organisation through a direct-market platform linked to its headquarters in Germany, while expanding the range of choices by handling healthcare and lifestyle products needed for all ages, as opposed to existing local drugstores’ focus on beauty products,” reported Korea Bizwire.

The brand’s marketing plan includes quiz events on its social media platforms until the 8th of April, and prizes including Starbucks coupons and Rossman Korea goods for winners.

Watson’s rapid international expansion

Rossmann is 40% owned by A.S. Watson. The company was established in 1972, with 2,100 stores in Germany and 3,930 stores in Europe. The reason why Watson chose its German brand to enter South Korea is because “Korean consumers were a match with the company’s meticulousness and strictness on their products, where both parties value safe, good quality products offered at reasonable prices”, according to Korea Bizwire.

A.S. Watson entered South Korea with its well-known Watson brand before. It sold its stake to convenience store retailer, GS Retail, in 2018. Since then, GS Retail rebranded all Watson stores to ‘Lalavla’. 

The Hong Kong headquartered company is expanding its international network rapidly, currently opening a new store every seven hours and just opened its 15,000th store in Malaysia in March.

Presentations

03/05/2019
An essential summary of trading priorities, latest developments, and other key commercial insights for A.S. Watson.
30/04/2019
Watsons demonstrates how a drugstore can standout from the competition by drawing inspiration from other parts of its global business. Its comprehensive approach to trends in health and beauty makes it stand-out from its competition in both ends of the price-tier spectrum. We visited its flagship store in Istanbul to see how it implements this approach with good ranging and differentiated service.
30/04/2019
We visit German drugstore operator Rossmann's flagship in Cologne and share our highlights, including:  1. An enhanced shopping environment 2. Best-in-class execution of the latest beauty trends 3. Clear segmentation in wellness  4. Stand-out private label ranges
View all presentations

Key presentations

We review A.S. Watson’s retail outlook over the next five years and the key markets to watch, as it continues to expand around the world.

This in-depth guide to China explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

An essential summary of trading priorities, latest developments, and other key commercial insights for A.S. Watson.

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