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Shoppers Drug Mart hops on technology bandwagon

Shoppers Drug Mart Corp. president and CEO Domenic Pilla speaks during the annual general meeting of shareholders in Toronto May 10, 2012.

MIKE CASSESE/MIKE CASSESE/REUTERS

Domenic Pilla is taking Shoppers Drug Mart Corp. into the future, one digital lipstick at a time.

The new chief executive officer oversaw the recent launch of the drugstore retailer's first e-commerce initiative with the rollout of an online shopping site for its high-end Murale beauty chain. It comes at a time when the country's largest drugstore merchant is feeling growing pressures of provincial drug reforms, which are squeezing the bottom line and forcing pharmacies to look for new revenue sources.

As Mr. Pilla embraces the new reality of an austere pharmacy age, he's looking for ways to bolster the business. Slow to pick up on e-commerce, Shoppers and other Canadian retailers today increasingly are adding online selling to their websites, worried about being overtaken by larger, deep-pocketed foreign rivals.

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Shoppers also faces competition from domestic players such as the Bay, which is ramping up its cybershopping capabilities, including for its high-margin beauty items. Last year, Wal-Mart Canada Corp. raised the ante by rolling out its first major online selling effort, while Amazon.ca is racing to add more product categories to its site.

Mr. Pilla is betting on technology for everything from speeding up the filling of prescriptions at the pharmacy counter to tracking customers' purchases and strengthening the company's buying processes, ensuring it's stocked up on high-demand items.

In social media, Shoppers is active on Facebook and Twitter, while having launched a BlackBerry app recently after rolling out one for iPhones in 2010.

Now it's handing cosmeticians iPads in 10 stores in a bid to respond faster to customers – and sell them more.

"Think of the genius bar at an Apple store – that could give you a hint about what we're talking about," Mr. Pilla said in an interview on Thursday after the annual meeting.

He said later that if the iPad test is successful, Shoppers will expand the initiative to other sections of the stores to help keep better tabs on its best customers' buying preferences if they opt into the program.

Its so-called "clientelling system" gives the retailer the ability to use data from its customer Optimum loyalty program to track their purchase history, if the customer agrees to the plan, spokeswoman Tammy Smitham said later. "This program would allow us to provide our customers with more product and event information focused specifically on their preferences and needs."

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Still, Shoppers has to come to grips with the challenge that a strong e-commerce site may mean for its core business model. It counts on drawing consumers into its stores for their prescriptions – or another item – and then enticing them to buy other products, ranging from food to cosmetics and even smart phones while there.

It also bets on luring customers with its extended hours and convenient locations at some 1,260 stores. Ms. Smitham said that Shoppers' average customer spends 20 minutes in one of its outlets. "They come for one thing and they stay for more."

But the current e-commerce test is an evolution rather than a revolution for Shoppers because it already provides free delivery in more than half of its stores, she said.

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More

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