We meet on the outskirts of Alliance Boots’ sprawling Nottingham HQ, where Andy Ferguson is being buoyant about the heritage of Boots.
He senses great things about the future of Boots Opticians, which is currently rebranding the long-established Dollond & Aitchison chain. However, he was, in his previous role, head of D&A when the merger deal – which effectively signaled the death knell for the long-held Dollond retail name – was finalised. It was a moment, he says, which did cause him to pause.
“The change of the name was emotional,” he tells me, “and in many ways it was more emotional for me.
“The branding decision for me was very tough as it was ‘on my watch’ and that brand’s been there for 260 years.”
Nevertheless, there are no regrets for the likeable Scot, who started out in grocery retailing with the previous boss of D&A, Russell Hardy, at Safeways.
I’ve met several Boots Opticians managing directors, but Mr Ferguson is probably the one who is the most excited about the Boots name and heritage, despite having to drop optics’ oldest retail name in favour of the famed pharmacy brand.
On closer inspection, perhaps he has good reason to be excited. The Alliance Boots group is a giant, which, in Boots’ 160th year, has worldwide plans (one of them is to invest in changing the bulk of D&A’s branches to Boots Opticians by this time next year).
For Mr Ferguson, Boots’ brand strengths for its optical chain are much closer to home.
“The Boots brand has been around for 160 years, and the brands we’re competing with are Specsavers, Tesco, and Asda,” he says, pointing to Boots’ healthcare experience.
“It [Boots] has got far more power than either Tesco or Asda for it has 160 years of heritage, trust and everything that goes with the brand. And so,” he grins, “what a great brand to use for an optics business.”
In its opticians business Alliance Boots “saw a tremendous potential” to grow the Boots Opticians brand, he says, and wanted to try and find a way of creating enough size to be a real competitor to Specsavers.
Therefore, the ambition is to “get behind the brand”, and start to harness the benefits of being part of the overall Boots health portfolio, where potential remains to be tapped he claims.
For Mr Ferguson, this potential includes the ten local GPs that have chosen to locate their services in Boots outlets, and 1,000 outlets which have been converted to ‘your local Boots pharmacy’ insignia.
“So we’ve got pharmacy, doctors surgeries and optics,” he comments, “and this is starting to build something very unique in retail, and Boots, because of its sheer spread and number of stores throughout the UK, is ideally positioned to offer convenient healthcare in the High Street.
“Clinicians who work for Boots are working in a group where health-related discussions between the patient and pharmacist and other professional staff take place all the time,” he says, “this is different to any other optical retailer in the UK, and one they can only dream about.”
With its ties to the NHS through its pharmacy services, he reveals that Alliance Boots is giving the optical chain resources that at D&A “we could only have imagined in terms of availability of people who have the expertise, the contacts and the ability to take the business forward”.
This emphasis is leading to extending the wider health messages that his team of optical professionals are given.
“We’re working with optometrists and explaining to them about the importance of the frequent replacement prescription service that operates within the Boots business, and the opportunity to do check-ups,” he says.
“So we’ve been training our optometrists on those sort of things, and working with our pharmacists and explaining to them the positive benefits of pro-active healthcare, including having an eye examination every couple of years. Also, producing leaflets for them so when they’re working with their patients there is an opportunity to speak to them about an eye test, especially if someone presents with a condition.
“These are unique things, and here is an opportunity to work in business on something truly different, which our competitors can’t replicate.”
Enough of the opportunities of being part of Alliance Boots. I move back to D&A again, and press him on what is to happen.
Mr Ferguson admits there has been little news since the merger was announced and then completed in the spring, but said that was because he and his colleagues had been so busy preparing the ground for the new 600+ store chain to work properly.
A single retail support structure was put into action from May – “day one of the merger” – with regional managers dealing with two dozen or so outlets, and their staff, or ‘people’ as Mr Ferguson terms them.
“The process started of engaging the people locally, and making sure that they began to feel like one team immediately, was where we started,” Mr Ferguson remembers, “it was that and not worrying, say, about changing the fascias. We started with the people.
“The new regional manager might have been a Boots person, or a ex D&A guy, it didn’t really matter, they had to get to know each other’s businesses, they had to get to know all the staff they were responsible for from day one.
“This, of course made for those people from Boots looking at D&A’s processes to say ‘I like that’, or vice-versa, and suddenly you have a best-of-both momentum.”
This cherry-picking of the best of the previously unrelated companies is, obviously, something Mr Ferguson is well-positioned to speak on, having worked for both. In shaping the new business he claims the philosophy is “if the best-of-both works, we’ll take that, if it’s not good enough we’ll create better than both”.
“Boots are very strong on pre-screening,” he thinks, “whereas D&A was less strong in that area, but very strong in the patient choosing glasses, so the Styleyes system and digital image capture were important and huge strengths.
“Looking at product, D&A was strong with lenses, did lots of work over the years with Nikon, at the higher quality end of the lens business; Boots less strong on that, but very strong on frames, particularly in own-brand because we source direct via a 90-odd strong brand team in Hong Kong that works for the Boots UK business, and that we use them to source product and quality control.”
The list continues, and Mr Ferguson concludes: “Wherever we turn one of the business’s weakness is the other business’s strengths – where we want to take a quantum leap on something clearly we will build from the strengths.”
Intriguingly, for Boots Opticians’ future direction, Mr Ferguson states that from consumer research the company has carried out – which has compared and contrasted the patient’s experience from both businesses – “we understand and see the way to locating a very differentiated proportion for Boots going forward”.
Part of that process has seen ten rebranded stores around the country so far. When I point out if Boots are going to rebrand the lot by 2011 that will mean the need to alter around 30 a month, he claims this figure “won’t be far off the mark”.
One thing he is certain on is the ability for Boots Opticians to grow.
“Long-term, we can see more outlets, definitely,” he says, “you can see, again using the resources of the business, where are the areas where we can grow, and I think there are opportunities to grow still.
“We have 690 outlets right now, and there are opportunities to put new practices down on a free-standing basis, starting from scratch, but also to take space in larger Boots stores where we have not, for some reason, had an optical practice.”
Our chat over, Mr Ferguson departs into the depths of Alliance Boots’ massive Nottingham HQ, no doubt to plot more developments in the coming to an end of his old business, and the birth of a new one.