New era in mass retail dawns

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George Riedl, once Walgreen’s head merchant, has signed on with Walmart to run that retailer’s health care services. Thus, 2015, from a personnel standpoint, ends as it began, with jobs and career changes once deemed unthinkable.George Riedl, once Walgreens’ head merchant, has signed on with Walmart to run that retailer’s health care services. Thus, 2015, from a personnel standpoint, ends as it began, with jobs and career changes once deemed unthinkable.

As astonishing as the individual shifts is the realization that the lines that once separated retail trade classes have ceased to exist. Put another way, an ­employee once deemed essential to a drug chain has become equally critical to a discount ­retailer.

First, about Riedl’s move to Walmart, it can only be viewed as a hugely positive transaction. Few retail executives are as knowledgeable about pharmacy as the former Walgreens staffer, and his knowledge, experience, reputation and sensitivity to retail health care can only benefit America’s largest retailer.

Further, he brings to Walmart a list of skills and priorities that retailer might have been missing in the past, so preoccupied has it been with the more visible product categories that have catapulted it to the top of the retailing tree.

So credit Walmart for reaching beyond its traditional boundaries to hire a man from another industry. And credit Riedl for understanding that Walmart is offering a unique opportunity, and having the sensitivity to grab it.

Beyond this melding of Riedl and Walmart is the idea that mass retailing has become a singular business segment, no longer separated by what kinds of products and categories a retailer features, promotes or sells. Rather, mass retailing must now be defined by its customers, those people who shop a store rather than a product or category.

It no longer matters where a customer shops for a prescription drug — or for any other product category. What matters is her faith in the retailer selling that category. In other words, a good mass retailer can sell ­anything.

As an aside, it is noteworthy that Walmart has apparently increased its commitment to health care at the moment when archrival Target has chosen to reduce its commitment to that category by selling its prescription drug business to the CVS/pharmacy drug chain. Are they both right in their decision? The answer will come, if not at once then at last.
Finally, or maybe not, will this personnel crossover, hardly at an end, level the mass retailing playing field? Are Walgreens and Walmart, despite their obvious differences, more equal than they’ve been?

Will a customer, not finding what she wants at Walgreens, cross the street and shop at Walmart? Or Target? Or Kroger? Is Walmart’s value emphasis more powerful than Walgreens’ reputation as a leader in health care? Will a grocery orientation continue to pull in shoppers to buy other products? Or will a retailer like Walmart, with apparently newfound strength in pharmacy, siphon off prescription drug customers from longtime leaders like Walgreens and CVS?

These answers, when they come, will change the face of mass retailing in America. And they might begin coming very quickly.

Lastly, what organizations will represent the new mass retailing community going forward?

Until now, the National Association of Chain Drug Stores has appeared to possess the greatest combination of strengths — and the most committed membership. Most other trade associations appear too committed to one retail segment, at the expense of the others.

To maintain its momentum, however, NACDS will have to make some adjustments. For example, should the membership criterion of operating pharmacies remain as a condition of membership?

Dropping that condition would certainly bring the association more members. But would it hurt NACDS in other, more subtle ways?

Similarly, other retail associations have restrictive requirements that hold down membership. Should these be eliminated? Or reduced?

Would it matter? Probably. Would the associations care? Possibly.

One era of mass retailing is over. Another is about to begin. Shortly, this new alignment will begin to recast the retailing ­community. Stay tuned.


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