Advantage Pharmacy and Chemist Discount Centre presents former CEO of Kmart; Guy Russo Applying retail strategies to the community pharmacy sector.
Guy Russo is credited with one of Australia’s greatest business turnarounds, taking Wesfarmers’ ugly duckling, Kmart, from the bottom of the discount chain store ladder, to the most popular and profitable retail department store business in Australia today.
At APP2020, Guy Russo will present in the main arena offering in-depth insights, narratives and examples of how he transformed Kmart into today’s iconic brand.
Russo will also be joined by Steven Kastrinakis, CEO of Advantage Group in a Q&A to determine how he suggests this best practice and insights can be applied to the community pharmacy sector.
1/ Guy tell us a little about your background?
I started my career at McDonald’s corporation and worked there for 33 years. I began in operations and eventually become Chief Executive Officer at McDonald’s Australia and then President of McDonald’s Greater China from 2005 to 2007.
In 2008, I commenced my journey at Wesfarmers in the role of Managing Director of Kmart. I was appointed Chief Executive Officer of the Department Stores division (Kmart Limited/Target Limited) in February 2016.
I’m currently a Senior Advisor to Wesfarmers Limited and was recently appointed Chairman of Guzman y Gomez premium fast casual Mexican restaurants. I’m also a passionate President of global non-profit, OneSky, for orphaned and at-risk children.
2/ You will be speaking about applying retail strategies to the community pharmacy sector. Please provide a sneak preview about three key points you will be making?
Love your customers. Build a great culture. Plan your strategy and then execute.
When I first joined Kmart, we had a $4 billion annual turnover with zero profit. The brand had been basically running with no profit for a decade and was on the verge of bankruptcy.
There were many tactics that I used to turn the brand around.
With an expert team around me we looked at international brands who were playing well in a similar space to Kmart. We specifically homed in on Primark in Europe and Walmart in the US. What they were doing was selling the basics at really low prices. They were also buying in volume.
Our strategy was to simplify. When I started at Kmart we had 125,000 different products. We set about removing products that weren’t basics. Then we sold them at the lowest possible price. Low prices were going to be our competitive advantage.
We put customers at the heart of what we were doing.
I would tell staff, if someone walks in, smile at them and see if there’s a way we can help them.
While I could have called in external consultants when something wasn’t working, it was my preference to hear direct feedback instead.
My team knew what was wrong. Our customers, suppliers and stakeholders had some of the best solutions for the problems we were encountering. I listened.
I believe these core principals will be very relevant to community pharmacy in 2020 and beyond.
3/ How will retailing change in the next 5 years?
No one can accurately predict what will be happening in retail in the next five to ten years. However, what I do know is that those businesses that innovate, stay close with their customers and their people, manage their balance sheet, and strive for excellence in all areas will do very well.
For nearly 35 years I worked at the world’s largest franchise network, McDonalds. Every franchisee comes into the business very enthusiastically. My advice to franchisees is be where your customers are.
Nothing can be run by remote control.
Work on the floor.
Don’t shy away from the basics of your business. Whether you’re a franchisee or franchisor if you steer away from the basics and what you’re good at, you’ll start to get into trouble.
And most importantly ensure you’re turning over a healthy profit. Making sure the economics of every standalone unit, shop or store’s profitability, is core to successful franchises.
Often, a mistake I’ve seen in franchising is owners of individual franchises getting the seven-year itch. Either parties, or both, at some point in the franchise life cycle believe they don’t need each other. That’s the only time I’ve seen something go wrong. The people who suffer in this example are the people we’ve employed to serve the customers and the customers themselves.
4/ What is your message to pharmacists re their priority tasks?
Unlike the businesses I’ve worked in, people actually need a pharmacy’s products and services! However, my basics still apply. Keep your product lines simple. If your business model is to keep prices low, keep them low. Focus on your customers and their needs. Listen to what the experts around you are telling you; your team, your customers, your suppliers and stakeholders.
I believe a big part of our success with Kmart was by creating a great company culture. Culture is at the heart and soul of any retailer that can consistently outperform the competition. It also motivates employees to do the right thing, not just the easy thing, and always with customers at front and centre.