Geographic expansion, omnichannel retailing key tenets to Alliance Boots growth strategy
ZUG, Switzerland — With the announcement of Alliance Boots’ year-end results Thursday morning, the future of what a finalized Walgreens/Alliance Boots merger might look like materialized to a greater degree.
"In February 2015, the six months window when Walgreens can exercise its option to merge with Alliance Boots begins," said Stefano Pessina, executive chairman Alliance Boots. The two companies’ joint strategy of "creating the first global pharmacy-led health and wellbeing enterprise" will hinge on continued geographic expansion into emerging markets coupled with a constantly-evolving outlook on what it means to be an international omnichannel retailer.
Alliance Boots reported annual revenues of $39.2 billion for the year ended March 31, representing an increase of 4.3%. It’s a considerable increase, the company reported — especially when you factor in the still-challenged marketplace and the preparations the company has been making toward it’s likely merger with Walgreens in February.
"During the last 12 months a great deal of our management time has been dedicated to our Walgreens partnership, [including] our joint synergy program, our preparation for our merger and in dealing with the very heavy burden of complex reporting requirements," Pessina said. "Notwithstanding this, we have put considerable resources and energy into accelerating our international expansion, primarily M&A in emerging markets such as the transaction we announced last week in Mexico and Chile," he said.
Regarding Alliance Boots’ wholesale division, the future is about expanding international partnerships, Pessina said. "Being global is important in many business sectors," he said. "This is why we had the vision and courage to enter into our transformational partnership with Walgreens and our ground-breaking joint agreement with AmerisourceBergen. This is why we ourselves are continuing to expand geographically in large developing markets in Latin America and Asia."
"We are at the point in our cycle where we are reinventing our business model," Pessina added. "For Alliance Boots this translates into accelerating our rapidly-evolving health-and-beauty omnichannel offering in an integrated way with even more differentiated products and services tailored to meed the rapidly-evolving customer behaviors and expectations in terms of choice, convenience or service."
Like Walgreens, Alliance Boots is very much focused on delivering an omnichannel retail experience. "As an omnichannel retailer we are increasingly integrating Boots.com into our core Boots product and service offer, bringing greater levels of accessibility and convenience for our customers," commented George Fairweather, Alliance Boots group finance director. "As a result, Boots.com revenue increased year-over-year by about 30%," he said. "59% of orders were collected in-store — that’s a year-on-year increase of 14 percentage points, our pick-up by 2 p.m. tomorrow service, which now operates from over 2,300 Boots stores across the U.K., being particularly popular."
Regarding the progress in merging Walgreens and Alliance Boots, total synergies to date are ahead of target, Pessina said, with an 18.5% rise in underlying attributable profit. "While still at an early stage, we were pleased with the overall progress of the program," he said. “Our strategy of creating the first global pharmacy-led health and wellbeing enterprise in partnership with Walgreens is, I believe, widely recognised as being the right way forward. This is evidenced by the realignment of our industry that is starting to quickly take place, as competitors seek to follow our lead," Pessina stated. “Being global is increasingly important in many business sectors including our own. The steps taken by the Group over the last two years, most notably our transformational partnership with Walgreens, our joint agreement with AmerisourceBergen, our geographical expansion in Latin America and Asia and all the work we have done to develop our brands are enabling the Group to continue on its path to becoming the clear world leader in both retail pharmacy and pharmaceutical wholesaling."
The global healthcare delivery race continues, with Google, Amazon, Apple, Walmart and other Stealthcare companies not far behind. Ron Hammerle, Chairman Health Resources, Ltd. Tampa, Florida
Consumers seek brands with a mission
Authentic. Cause-related. Good for you. That’s what many of today’s shoppers — especially the 77 million millennials throughout the country — want in the products they buy, and beauty is no exception. This has given rise to an array of beauty brands that promise to do much more than enhance one’s physical appearance.
According to data from the NPD Group, the natural personal care market has experienced double-digit growth since 2008, and has seen a compound annual growth rate of 11.3% over the last five years. It is projected to post an increase of 9.2% to reach $46 billion in 2018.
“Although growth numbers have settled, many factors — including a focus on new natural ingredients, the opening of new channels of distribution and a consumer movement demanding greater transparency in labeling — are stimulating the industry. Moreover, marketers are offering products designed for specific demographic groups like men and babies, thereby opening up greater opportunities,” said Carrie Mellage, VP of Kline’s Consumer Products practice, when releasing the data.
Looking to appeal to these shoppers, several beauty brands have entered the spotlight, such as Out of Africa, which contributes 15 cents with each purchase of its natural formulations to help provide education to women and children in West Africa. There’s also Sundial’s SheaMoisture, which offers bath and body, hair care, men’s and children’s products made with certified-organic and ethically sourced ingredients. SheaMoisture ethically sources its shea butter from seven women’s co-ops in Northern Ghana and works directly with the women to pay above market prices for their shea butter.
No comments found
Report: Hy-Vee embarks on aggressive growth plan
SPRINGFIELD, Ill. — The new Hy-Vee new store in Springfield, Ill., which marks the grocer’s 238th store in eight Midwestern states, is part of an aggressive growth plan, according to a local news report.
Hy-Vee chairman, president and CEO Randy Edeker told the State Journal-Register that the $20.8 million investment in the new Springfield location, which includes a pharmacy, is part of an aggressive growth plan that involves opening new stores, updating existing locations and branching out into new markets.
By the end of its fiscal year in September, Hy-Vee will have opened four new stores, including the Springfield store, expanded or remodeled 10 stores, relocated two and opened 16 convenience stores, the article states.
Furthermore, the company plans to open a new store is planned for Bloomington in the fiscal year that begins Oct. 1, and land has been purchased for a second store in Peoria, the article states. The company also just announced plans to expanding into the Minneapolis market
No comments found