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02/03/2021

Private Label Week day 3 keynote: Walgreens out to ‘supercharge’ owned brands

David Salazar
Managing Editor
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Walgreens is looking to “supercharge” its owned brand healthcare portfolio amid a retail environment transformed by the pandemic, aiming to differentiate itself based on listening to consumer needs and building strong supplier partnerships. That was the message Andrea Collaro, senior director of owned brands health and wellness at Walgreens, brought to her keynote for day 3 of PLMA’s Private Label Week. 

Collaro — a 30-year Walgreens veteran who began her career as a pharmacist — outlined macro changes brought about by the pandemic and the store brand-specific changes the this environment has created. Customers putting more focus on relationships with retailers and demanding more from stores with regard to pricing, quality and assortment while also being unafraid to switch from retailers who don’t deliver. 

A critical area store brands come into play is the desire for value, which now has been paired with COVID-19 accelerating consumer interest in preventive care for themselves and their families. At the same time, the early days of the pandemic brought a lasting trend — more shoppers trying owned brands. 

“A lot of those shoppers that bought owned brand for the first time have stuck with owned brand, which is fantastic, and they’re repeating their purchases on owned brand,” Collaro said. She also outlined how some trends that emerged during the Great Recession are beginning to show up in the current COVID-driven recessionary environment. The good news: in areas where price gaps existed between national and private label brands, private label often is favored, she said. 

Within the drug chain’s healthcare owned brands strategy, the company is focused on differentiation of its owned brands, having strong supplier partnerships, she said, noting, “We can’t do this without supplier partners that have the same objectives we do,” she said.

In order to differentiate its own brand portfolio, Collaro said Walgreens is putting emphasis on value, national brand equivalents and elevating its owned brand equity. On value, she said the company routinely reviews metrics to ensure its assortment is meeting consumers’ value needs.

“It is so critical that we have the best of the best on the national brand equivalents. It is the bulk of the business and there are areas like big Rx-to-OTC switches that offer a ton of value for our shoppers.”
Andrea Collaro, Walgreens senior director of owned brands health and wellness

National brand equivalents, she said, are a particularly important part of the company’s approach — and one where it has been succeeding, being the first to market with store brand version of big Rx-to-OTC switches Voltaren and Pataday last year.

“It is so critical that we have the best of the best on the national brand equivalents. It is the bulk of the business and there are areas like big Rx-to-OTC switches that offer a ton of value for our shoppers,” she said. “We’re constantly evaluating our products to ensure that we’re delivering products that are equivalent or even better and by curating that assortment, we are also able to deliver a strong value alternative for our shoppers.”

Being equivalent and slightly better than the national brand is a critical component of differentiation as well, noting that there are areas where Walgreens’ private brands go beyond what the national brand offers. 

“A lot of times we’ll look at our national brand equivalents and elevate them to ‘national brand better’ offerings that might include things like product format differentiation or enhancements within the attributes that make it better than the national brand,” she said. “That is a very important part of what we do.”

In terms of elevating Walgreen’s brand equity, Collaro noted that Walgreens has leveraged its strength in healthcare to bring unique offerings to market that respond to consumer desire. She noted that early in the pandemic, the company worked with a supplier to be first to market with a pulse oximeter that also has a respiratory rate monitoring function. “

“We’re constantly looking at ways we can build out that differentiation and by doing that we generate customer loyalty,” she said. “We are on a mission to make sure that we’re continuing to elevate our brand equity through product differentiation that is customer-led.”

Ultimately, keeping the customer in mind is critical, and it was the centerpiece of her message to suppliers.

“As you think about your product portfolios and what you have today, do you have any customer-led innovation in the healthcare space, unique offerings or ideas?” she said. “I talk to suppliers all the time about products they’re thinking about bringing to market, then we’ll have a conversation about whether or not it makes sense and what the market looks like. I’d ask that you go back and look at your product assortments in the healthcare space today."