The Shopper’s Drug Mart Business Model

I am actually old enough to remember the original Koffler’s Drug Store in Toronto that later became part of the Shopper’s Drug Mart history.  And who could forget their phone number, 444-4444.  This means of course that I’m also old enough to remember when integrity in business mattered and when the customer could count on good service.

The present Shopper’s Drug Mart marketing model looks like this:

1. Decide that out of all the SKUs (individual product line items) you carry, a third of them are going to be on sale every three weeks.  This means environmentally that your flyers will be responsible for the killing of many trees, and that your product images in the advertising will be so small that people will go blind trying to read them.  It also renders your “regular” prices meaningless.
2. If it’s a truly good deal, make sure none of your stores receive enough product to last even the first few hours.  But do remember to keep a few cartons back for staff, personal friends, and customers who start screaming audibly.  (Funny how they’re always able to turn up something when you keep asking.)  The SDM where we live has been chronically out of stock of their specials for twenty years now, this is not a new strategy.
   
3. If you have a deal that’s something like, 2-For-$5.00, but the individual price is $2.99; make sure you only have one unit left on display at a time.  The customer will think they got the “last one” before realizing they’re being charged a higher sale price than the $2.50 the above price would suggest.
4. Purchase an expensive array of point-of-sale terminals and electronic payment terminals, but make sure only one cashier is on duty at a time.  Not only does it save you money, but the long lineup makes (some) people think there’s a buying frenzy going on.
5. Be totally indifferent, totally monolithic, too big to care.

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