Walgreens, which owns over 8,600 U.S. locations, is shuttering more than 50 in August alone as part of a master plan to close 1,200 stores in three years. Higher costs fuel this contraction. Decreasing prescription reimbursements and heightened competition from e-commerce and big-box retailers, including Amazon and Walmart.
For beauty consumers, the closure of Beauty Brands and other similar establishments means more than just a loss of planned, convenient stops on a beauty outing; it also represents a change in how the beauty market operates, as well as the way beauty products are sold and marketed. Higher costs threaten the traditional drug store beauty department.
The Strategy Behind Walgreens’ Closure
Walgreens CEO Tim Wentworth called the closures a “strategic transformation” to cut costs and improve profits in a tough retail pharmacy sector. Even though Walgreens’ sales increased, it had $3 billion in net losses last year. This evidence shows that sales are not a sustainable business in general.
By closing underperforming locations, Walgreens can allocate more resources to the better-performing stores and online. To beauty shoppers, shopping at brick-and-mortar locations with all product categories will mean less comprehensive product assortment and more time spent shopping with e-commerce or specialty beauty retail.
Local Communities and Access To Beauty
Walgreens stores frequently provide convenience beauty access to urban and suburban communities, and lower and middle-income consumers more often than others. When closed stores disrupt access to beauty abodes, particularly where limited beauty retailers exist, people describe these as “beauty deserts.”
” Indeed, in beauty deserts, consumers may find it more difficult to purchase affordable, quality products in neighborhood beauty spaces. Each closure deepens inequities in beauty product access and may negatively impact some communities that have come to rely on Walgreens for their beauty essentials.
Evolution Of Internet Beauty Shopping and Its Consequences
In line with a tide of internet beauty shopping, rivals like Amazon and direct-to-consumer companies fuel store shutdowns. Walgreens’ weakening visibility is an indication that it’s going to move quickly online.
The downside to purchasing beauty products online is the loss of sensory experience: swatching color, feeling texture, and smelling scent could all lead to buyer’s remorse or lower satisfaction levels. Also, not everyone is capable and willing to utilize trustworthy internet connections or have faith in the internet equally.
Price Sensitivity and Consumer Pushback
Walgreens consumers expressed disappointment over pricing increases, which caused store shutdowns. Inflation and cost constraints have driven up prices for beauty products, causing consumers to shift their shopping behaviors.
Price sensitivity may drive consumers to continue to shop at discount retailers and e-commerce sites rather than Walgreens. Beauty consumers are likely to continue searching for more value brands, or private labels, which could pressure Walgreens and their suppliers to have innovative and new ways of thinking about pricing.
The closings validate a marketplace condition where convenience alone cannot overcome consumer pushback against high prices, leading to reconsideration of the pricing and promotion of beauty products.
Second-Order Impacts On Retailers and Beauty Brands
Walgreens’ store closures are causing beauty brands to reconsider their distribution strategies. Those brands that heavily depend on Walgreens’s pride in shelf space now lose critical visibility, which can lead to reduced sales and brand loyalty.
It could lead to collaborative relationships with specialty beauty stores, department stores, or e-commerce stores. Niche or smaller brands might have a challenge being visible without the breadth of Walgreens’ awareness.
In contrast, upheaval allows agile brands to change course quickly. Retailers must find new in-store experiences or digital engagement to encourage beauty consumers to keep moving away from Walgreens’ physical store model.
Historical Parallels and Lessons From Retail Pharmacy Decline
The Walgreens store closings follow earlier retail transitions, including the fall of the traditional department store in the early 2000s. Like those retailers, Walgreens faces disruption by e-commerce and consumer behavior change.
Retail chains have previously become obsolete when they fail to keep up with electronic trends and changing consumer expectations. Beauty shoppers, for example, will risk losing their familiar, convenient shopping locations and the illusion of a disjointed retail shopping experience.
The Walgreens experience should show retailers the need to be constantly nimble or, more importantly, innovative, or else they will suffer profound loss in market presence.
Psychological Effect On Beauty Shoppers
A Walgreens location regularly visited by loyal beauty shoppers is closed, and the shopper feels frustrated and apprehensive over the disruption to the convenience and routine. This experience shakes consumers’ confidence, and confidence can lead to brand switching or a cut in spending.
More deeply, on the psychological level, losing a known place of beauty diminishes the discovery and indulgent behaviors of shopping in person.
Brands and retailers need to leverage the emotional properties of beauty, providing for seamless switchovers, like transferring prescribed products and personalized online support, to help guarantee consumer retention, not just amid closures.
Unexpected Mashups: Walgreens Store Closings and the Convergence of Health & Beauty
Walgreens’ diminishing brick-and-mortar presence could stir up the convergence of the health and beauty categories in new ways.
Pharmacies connect health and beauty product offerings seamlessly; however, store closures could drive beauty shoppers to health and beauty hybrid stores or health-centric e-commerce platforms.
This convergence leads to a future of product innovation where formulations focus on beauty attributes and health value, appealing to increasingly health-conscious consumers.
What Beauty Shoppers Must Do Next
Walgreens’ store closures are a pivot for beauty shoppers, the end of ubiquitous drugstore beauty sections. Consumers must be creative by seeking new distribution channels online, specialty beauty retailers, and new health-beauty hybrid formats.
Brands and retailers must innovate on price, experience, and digital engagement to capture fluid demand. Whereas closures disrupt convenience and accessibility, they also open opportunities for more bespoke, personal beauty experiences.
The future of beauty shopping will have less to do with proximity and more to do with combined digital and physical touchpoints, with which all participants must be agile.
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