Shoppers Drug Mart Forges a Distinct Digital Future

In late 2017, three years after grocery giant Loblaw acquired pharmacy chain Shoppers Drug Mart (SDM), the two retailers announced they were merging two uber-popular rewards programs into one entity and calling it PC Optimum. Shortly after, SDM announced it would let customers redeem their points for online beauty purchases.

The launch came at 9 AM on a Saturday as Steve Hollingsworth, SDM’s senior director of e-commerce, was chasing his kids across a Treetop trekking aerial park. He stopped to check the hourly updates coming in from the launch.

“I nearly fell over when I saw the results,” Hollingsworth remembers. 

In that one hour between 9 and 10 AM on a chilly Saturday in late 2017, SDM’s customer engagement grew over 1,000%. The unprecedented gain underlined the value loyalty plays in the retail industry and further cemented the importance of Loblaw’s investment into digital rewards. Not only that—the launch also became a massive awareness boost for SDM’s online presence and set the pharmacy chain on a path to become a true e-commerce player. 

“It really just reinforced the value that loyalty plays,” says Hollingsworth. “Some things are hard to learn, and some things are easy to learn, you know?”

Need to Know

• In early October, Shoppers Drug Mart debuted a brand-new digital e-commerce experience. The new site builds off existing operations that focused on digital pharmacy and luxury beauty offerings.
• New e-commerce categories include Baby & Child, Electronics, Seasonal, and Food & Home. Moving forward, the retailer will continue to add new SKUs to the site.
• Shoppers Drug Mart is leaning heavily into its loyalty program, PC Optimum, to engage customers and drive sales. Initial promotions including 20x points events and $50 worth of rewards on orders over $150. Customers can also redeem points for purchases online.
• The PC Optimum rewards program has over 18 million members, representing nearly two-thirds of every adult in Canada. 
• The new site follows the spring 2020 relaunch of Shoppers Drug Mart native mobile apps.

New, but familiar

Now, three years after that initial online loyalty launch, SDM has taken all of its learnings from the massive success of PC Optimum and the digital growth of parent company Loblaw to build a completely new online platform.

Earlier this month, the retailer debuted several new categories of online shopping, as well as an updated e-commerce experience. Those new e-commerce categories were also integrated into SDM’s mobile app, which also relaunched earlier this spring with eCommerce and order-ahead prescription filling capabilities.

Consumers are now able to shop through beauty.shoppersdrugmart.ca to see the modern version of the retailer’s online presence, including sections devoted to personal care, health, electronics, and baby/children. These sections are brand new, joining a pre-existing beauty and digital pharmacy e-commerce offerings. The expanded categories feature prominently on both the app as well as the web platform and together represent SDM’s key digital offerings.

These new categories and refreshed e-commerce presence may come five years after the initial rollout of SDM’s online Beauty Boutique, but don’t confuse that with inactivity. The retailer holds an intriguing spot in the market, so e-commerce rollout needed to be precise and purposeful. 

SDM’s brick-and-mortar locations are a combination of one-stop-shop and luxury—think Champs-Élysées meets New York City bodega. They offer high-end cosmetics and beauty supplies side-by-side with household staples, all under one roof. Prior to this new online launch, consumers visited SDM’s website to browse brands like Gucci, Tom Ford, and Giorgio Armani. Hollingsworth’s main task was to make sure customers could still locate the luxury goods they wanted, while also surfacing new SKUs such as a Nintendo Switch or even diapers. 

“Shoppers Drug Mart really is an interesting brand,” says Hollingsworth. “How many other retailers play in the high-end luxury beauty in addition to the personal care and pharmacy realm? To merge them online, first and foremost, it was about bringing that SDM value proposition to the digital space and making those categories accessible.”

“We’re building value propositions that reflect the convention and capabilities of digital retail operations.”

Steve Hollingsworth, senior director of e-commerce, Shoppers Drug Mart.

For Hollingsworth and Loblaw Digital, the innovation hub he and his team call home, the most essential part of SDM’s online expansion came down to ensuring customers could find what they were looking for, fast. 

“We need to deliver convenience in a way that is simple for customers to navigate,” he says. “It needs to be intuitive, with easy-to-find products, and always working. Once you get past the core experience, we can get to thinking about how individual customers use the digital ecosystem.”

Fulfillment and customer centricity

With a new online commerce platform comes all of the logistics involved in a normal rollout. SDM parent Loblaw has already nailed digital fulfillment, but this new shopping experience would take a bit of a new approach, mixed with learnings from Loblaw’s billion-dollar digital platform. 

Fulfillment for SDM’s new online categories happens from a central distribution center. Hollingsworth and his team did, however, consider a new eCommerce fulfillment trend: using SDM’s extensive physical locations for distribution. In this case, the adaptability of the brick-and-mortar experience makes this strategy tricky to navigate.

Not all physical SDMs are created equal—some have sprawling fresh produce sections, while some act as essential pharmacists on the first floors of hospitals. Some have racks of electronics, while others sit in malls serving a different clientele. With this in mind, central distribution was the answer. 

“Everything we do focuses on the customer. What works for them, and where can we improve,” says Hollingsworth. “Certain brands are carried in every store because of space limitations and other factors. So how do we make that assortment available in a way that can reach every Canadian coast to coast? We needed some way to be able to do that. It’s important to be picky and zero in on what’s not optimal.”

The degree to which SDM will pull in groceries into the mix remains to be seen. Loblaw offers a leading online grocery option highlighted by micro-fulfillment and click-and-collect features which could be considered.

For Hollingsworth, the answer goes back to customer experience, and understanding customers’ current behavior in stores, unlocked by loyalty data. The PC Optimum rewards program has over 18 million members, representing nearly two-thirds of every adult in Canada. 

“Loyalty, in a word, is immense in terms of the engagement it creates for customers.”

Steve Hollingsworth

“We start with customers,’ says Hollingsworth. “They shop the SDM banner and the grocery banner. We understand that through loyalty data. For us, the question is how do we make that as easy and simple as possible. Whether or not that’s experiences that include both SDM and Loblaw, or its one integrated experience, I think it’s on us to figure out how to make that as simple as possible. We’re building value props that reflect the convention and capabilities of digital retail operations.”

The future of Shoppers Drug Mart

Moving forward, SDM is focused on researching how customers interact with the new digital experience and iterating on the ways it surfaces products, features loyalty, and incorporates personalization. The latter two offer the most room for growth—Hollingsworth says, “loyalty, in a word, is immense in terms of the engagement it creates for customers.” As customers continue to shop and gather points with PC Optimum, SDM can understand purchase habits and tailor products and promotions, and digital experiences. 

“One of the best things about digital is to put things out there and learn and adapt quickly,” says Hollingsworth. “The reality is, once we launch, that’s when the real learning starts. This is another huge milestone and a huge step forward in terms of value propositions, but we view this as the starting line. Now we go and put this out into the world and understand how to continually get better.”