Alliance Boots is alive and kicking

Alliance Boots has joined the elite group of just three UK retailers to break the £1bn profit mark – but what is it that sets the companies apart?

Alliance Boots reported this week that its profit was up 12.7% to £1.07bn for the last trading year. The figure puts it shoulder to shoulder with Tesco and Marks & Spencer as the only retailers in the UK to hit the £1bn mark.

It’s no surprise then that these three retailers share a strong and consistent approach to marketing.

M&S has long been renowned for its top quality marketing and television advertising campaigns. Its “food porn” ads gained almost cult status among consumers and marketers alike. When M&S announced it was canning the campaign and replacing it with the “Just because” ads voiced by Caroline Quentin, it caused quite a stir, and the jury is still out on the new campaign.

Tesco has a strong reputation of clever and effective marketing, most notably in the past 12 months through its loyalty push and the Clubcard Double Points initiative.

Both these retailers have been able to adapt quickly and successfully to changing consumer behaviour and produce marketing strategies and campaigns that hit the right note with how the consumer is feeling. Something that is reflected in their financial results.

How does Boots compare in the marketing stakes?

It launched the “Here come the girls” campaign last year which has been received well by consumers and gives the health and beauty retailer an advertising platform that can be adapted seasonally while maintaining a consistent and recognisable message.

It’s also got one of the most widely used and highly regarded retail loyalty schemes in the country, The Boots Advantage Card.

Stefano Pessina, executive chairman of Alliance Boots, also said in the full year trading statement that the chain was looking to further “accelerate” its business in the UK and elsewhere through strategic partnerships.

This is something Boots has already dabbled in and last week announced a deal with Procter & Gamble to distribute its own brand Boots Laboratory skincare range in Italy.

It also partnered with Diet Coke and Nails Inc as part of a cross-promotional deal, and aligned itself with the upcoming release of Sex in the City 2.

The chain also says its profit was boosted by the roll out of its “your local” Boots pharmacy stores and the introduction of the No7 Protect & Perfect Intense Beauty Serum range proving that its own brand ranges are highly regarded competitors of branded products.

Boots behaves in a similar way to one of the Big Four supermarkets. It has a popular and well used loyalty scheme and offers cardholders regular targeted offers, a customer magazine and promotions such as double points at various times throughout the year.

It has a recognisable ad campaign that it can adapt to fit in with the seasons and calendar events, and it’s trying new store formats showing it is adapting to the changes in consumer behaviour and the demands of its shoppers.

Much like Tesco et al moved in to convenience retail, Boots has opened standalone, local pharmacies and has partnered with Waitrose in a deal which sees both retailers selling each other’s products in store.

If it continues down the same track, Boots can only strengthen its position at home and internationally.

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