What if you could give your customer his order before he was done giving it to you? Well, that idea is what built the drug store Walgreens. When a nearby customer would call in a non-prescription order using the newly developed telephone, Charles Walgreen would repeat the caller’s name, address and order so his assistant could hear it, and write down the address and the order.
Then Charles would engage the customer in idle chit-chat while the assistant would grab the order off the shelf and race to the customer’s home. While Charles was still on the phone his assistant would deliver the order, often before the customer was even off the phone with Charles. Word soon spread about the exceptionally fast service Walgreen’s pharmacy delivered. These stunts and other innovations propelled Walgreens from a small Chicago pharmacy into a 24.6 billion dollar, 3,520 store business.
Carbonated water was used in the pharmacy business in the early 1900s. Many pharmacies bottled the soda water with added flavoring as a health aide. Charles saw another opportunity. Why not add a soda fountain and a bar and tables where people could sit? It was a hit. So he then added ice cream and sundaes to his offerings, which also turned out to be a hit. But serving ice cream was not enough. It didn’t create enough differentiation from other pharmacies, so Charles developed a private label premium ice cream that contained more butterfat, creating a higher quality product offering. While sales soared in the summer, as fall turned into winter the demand for ice cream began to wain.
Charles, the consummate tinkerer, examined the situation and added hot soup, sandwiches, and desserts, and sales rose again. When summer returned he again examined the situation. With the help of his fountain manager, he developed the milkshake, which turned into yet another hit. In the following years, he added a perfume bar so women could sample perfumes before they bought them. This was another first which turned out to be successful. Then he added a cigar and pipe tobacco bar for men.
Knowing that customers wanted to save money, but also knowing that running too many sales made you look cheap, he reached out to other local pharmacies and created the Valet Club. Through the Valet Club, the pharmacies could collectively negotiate lower prices from suppliers. For example, a Gillette razor that usually sold for $1.00 sold at Walgreens for only $.69 because of the volume purchasing power of the Valet Club members. Charles Walgreen was a constant innovator who was never happy with the status quo. He kept his mind open so he could spot new ideas.
How can you think more like Charles Walgreen and expand your product or service offerings to stay ahead of the competition?
