In the wake of CVS Health announcing its plans to acquire insurer Aetna for roughly $69 billion, aiming to safeguard against challenges in retail and health care, Walgreens is taking a different approach to grow, starting at the front of its stores.
The Illinois-based drugstore chain announced Monday a rebranding strategy aimed at educating consumers on Walgreens' long-standing history, and stepping up efforts to target a younger demographic, particularly females.
Earlier this year, Walgreens said it would acquire roughly 1,900 stores from the Rite Aid nameplate, which are still being transferred over. Initially, Walgreens tried to outright buy the chain in 2015, and has since scaled back the number of stores in the purchasing agreement when met with regulatory scrutiny.
"This comes back to having [pharmacy] professional and experts within our stores," Walgreens Chief Marketing Officer Adam Holyk told CNBC about the Rite Aid deal. "Customers like knowing there's someone there to help them when they need it."
Even as internet giant Amazon threatens to enter the drug industry, having already held preliminary talks with generic drug makers about potentially entering the space, Walgreens is pouring money into its own store renovations and now a reinvented marketing campaign.
The company will add a new tagline to its logo: "Trusted Since 1901." Meantime, Walgreens is modernizing its business, showing off an updated mobile app, a strong loyalty program, and a website where shoppers can buy online and pick up in store.
"We are pharmacist led, in the services we provide, [but] we do view the retail aspect as important," Holyk said. "The question for Walgreens becomes: 'How can we translate our brand into the other products we sell today?'"
The company said its repositioning intends to reach two demographics of female shoppers — millennials and Gen X – to make Walgreens their "preferred pharmacy of choice."
Walgreens has already brought in more "appropriate" brands for younger shoppers, with a big emphasis on its beauty aisles, according to Holyk.
Walgreens has revamped the aisles where it sells CoverGirl and Maybelline cosmetics, among other brands, in more than 1,000 stores. Though the company didn't offer a timeline on future remodels, the process is ongoing.
Roughly 3,000 beauty specialists have been hired to offer product expertise, aiming to make its stores more of a go-to destination for makeup.
In acquiring European drugstore chain Alliance Boots roughly three years ago, Walgreens was able to bring more higher-end beauty labels to its shelves. Now, the company is mixing up even more of that merchandise today, where there's money to be made off millennials.