An English Brand in New York Health and Beauty Stalwart Boots Has Set the US Market Firmly in Its Sights

FEATURES ONLINE BIG STORY Visit the website to read more practical features BOOTS retail-week.com An English brand in New York Health and beauty stalwart Boots has set the US market firmly in its sights. As the roll-out of its products across Walgreens stores in New York gathers pace, Tiffany Holland pays a visit ritain's biggest health and will get to 150 stores on the island by beauty retailer, Boots, wants the end of August. to change the face of beauty in The expansion in New York comes the US as it sets its sights on after Boots launched its No7 offer in a Bsmoothing out wrinkles across the Walgreens store in Hollywood, Califor• city that never sleeps, New York. nia, in 2012. Boots then extended it last After dominating the UK's high streets year to Phoenix, Arizona, where it began in health and beauty, Boots is seeking to selling the full offer in 60 Walgreens conquer the US, backed by its merger stores and a more select range in a fur• partner, drugstore giant Walgreens. ther 189 shops. It also has a presence in Boots' US plans stem from the "BEING BRITISH Boston, Washington and Chicago. ground-breaking 2012 deal in which IS HUGE HERE. But it is not the first time Boots has Walgreens bought a 45% stake in entered the US. It has been selling Alliance Boots with the intention of IT'S QUITE products through 1,770 Target stores merging next year to become a pharma• BIZARRE" since 2007, which helped Boots gener• ceuticals powerhouse. Gordon Farquhar, Boots ate $100m (£60.2m) in US sales last Speaking extensively for the first year. The Walgreens and Duane Reade time about the US operation since the stores complement the existing offer, deal was struck, Boots US managing says Farquhar. director Gordon Farquhar is heading a And it's not only Boots' No7 cosmet• huge piece of work that is set to change ics brand that is on sale. Boots has the way US shoppers buy beauty. exported its Botanies, Extracts and "Ornella [Barra, Alliance Boots chief Expert brands, hair care brand Mark executive of the pharmaceutical Hill, spa bath range Champneys and wholesale division] asked 'can you anti-ageing range Protect and Perfect. come here and transform beauty in the In total the offer comprises 450 SKUs. US?'," Farquhar remembers, unfazed. Farquhar says Boots' products retail Farquhar has worked across Boots in the US at a slightly lower price than for most of his career. In 2006 he took a in the UK to stay competitive, but it is role at the Co-operative Group but not simply the offer that will make returned in 2009 as managing director American shoppers buy the products. at Boots International. Service is key and Boots aims to Since becoming Boots USA boss last place a beauty adviser in almost every year Farquhar has been getting to grips location to offer customers advice - an with American life. innovation in US drugstores. "It's very much mass-play or pre• "By and large in the US shoppers go boundaries of how they look without mium-play in the US. We can create to a department store, they sit in a chair scaring them [away]. the bridge between mass and pre• and [have a makeover] or they go to a "Accessibility is a strong part of the mium," he says. drugstore and help themselves. There's offer, with great quality products at Farquhar is based in New York, no additional advice. There are only affordable prices and the look and feel where the retailer is rolling out its offer pre-packs so you can't test them," Far• of a department store." across Walgreens stores through its quhar explains. "The Boots offer is in eponymous and Duane Reade fascias, of contrast to the experience a customer Modern stores which there are 260 in Manhattan alone. might have in make-up stores Sephora Alliance Boots executive chairman At present Boots retails products in and Mac [in the US]. Stefano Pessina says Boots' US perfor• 15 stores in Manhattan but it is opening "The Boots offer is for customers mance is "not bad" so far. He observes at a rate of eight stores per week and who want to look good. We stretch the that it is crucial to get the Boots offer 18 Retail Week April 11,2014 www.retail-week.com Jacqueline Gold on the new retail BIG STORY zombies Comment, p25 BOOTS Farquhar says the reaction in New women's skincare brand with a men's York has been positive. But Boots has range. But here we can start over." had to ensure it is hitting the right note Boots has also had to tinker with the with US shoppers. It has done that by packaging. Because all its moisturisers not assuming the market is the same as include sunscreen, which is classified the UK, and Farquhar says one of the as a drug in the US, different informa• biggest challenges has been to identify tion has to be printed on the products. the nuances of American consumers versus their British counterparts. British identity "We've found that since 2008 there Boots has also had to be aware of Amer• has been a real change in the way peo• ican spelling. Careful not to lose its ple shop [beauty] brands in the US. It is British identity, the retailer has kept the same as the way they shop fashion British spelling on its packaging but on now," he says. "It's like on Fifth Ave• point-of-sale material it is changed nue. You will see Chanel but you will from 'colour' to 'color' and from 'mois- also see Zara and Joe Fresh, so now turiser' to 'moisturizer', for example. they mix it all up. "It is part of our heritage and being "The same goes for beauty. It's about British is huge here. It's quite bizarre," having the opportunity to buy top-tier Farquhar says, explaining that the Jubi• but also have some mass lines," he says. lee and the London Olympics in 2012, That represents an opportunity for Prince William and Kate Middleton's Boots - although this way of buying wedding and the birth of royal baby beauty is entrenched in the UK, it is George have created a buzz around still a growing trend in the US, Farqu• Britishness. har notes. "We'll never play that overt British Additionally, Farquhar sees an thing because we want to be an opportunity to replicate Boots' UK suc• international brand. Our roots are in cess with its 'indulgent bathing' cate• Britain but our appeal has to be interna• into more modern stores. "The most The tie-up with drugstore gory through its exclusive tie-up with tional," Farquhar says. "If you are too important thing is that the Boots brand giant Walgreens has given spa brand Champneys. "A lot of brands British, you get put into a box that you is very well-received. With the flagship Boots a powerful ally in its do big bottles here. Now you have a dif• can't control." stores in cities like New York they quest to become a force ferent feel that you wouldn't usually Boots' UK heritage is particularly are better prepared [for Boots' offer]," in US retail get in a drugstore," he explains. strong and its Nottingham base is cru• he says. Boots has found a big opportunity in cial to its success. Farquhar says Boots New York's Walgreens and Duane men's skincare, which is an under- is a unique proposition to US analysts Reade stores have a much more pre• catered-for market in the US. Last year because of its vertically integrated mium feel - light, bright and well- it rolled out its No7 Men range to all of model. Boots develops and manufac• spaced stores, compared with rival Walgreens' 6,000 stores. Farquhar says: tures its own products at its Notting• CVS's somewhat lacklustre interiors "Now No7 can be positioned as skin- ham facility, BCM manufacturing. and infamous grey carpets. care irrespective of sex. In the UK it is a "BCM is FDA-approved. And you www.retail-week.com April 11, 2014 Retail Week 19 FEATURES ONLINE BIG STORY Visit the website to read more practical features BOOTS retail-week.com erful. Boots products were featured on the TV show Dr Phil recently, which reached four million viewers. Reality TV star Sharon Osbourne also helped when she recently went off-script and told US viewers that the Protect and Protect serum was like "gold dust" when it launched in the UK. Farquhar expects his transformation of US beauty to take five to 10 years. Brand awareness will be primarily driven by steady openings in more Walgreens stores. So if Boots is rolling out across the US, what about Walgreens' impact on Boots UK? Pessina says Walgreens' food offer will influence Boots stores in the UK. "Thev have a much wider range of food and we will analyse whether we can Boots' own brands can be found in Walgreens. It is also targeting the men's skincare market in the US sell some of this food in Boots. But the market is different and food is not a can see the penny drop among the US tingham base in the US just yet. "We "THE MOST very high margin category." analysts when they hear this," Farqu- would never like to lose the control of IMPORTANT Duane Reade and Walgreens stores har says.

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