Boots digitizes the future of its retail sector

Category: Europe Fintech Payments
Posted by Lea Hogg

British high-street retailer Boots has announced its intention to close 300 stores across the United Kingdom within the next year, despite reporting stronger sales in the latest quarter. This strategic move will primarily affect stores located in close proximity to other sites, resulting in a reduction of Boots’ stores from 2,200 to 1,900.

Despite the store closures, Boots has assured its workforce that there are no planned redundancies. Instead, the company aims to redeploy the affected workers.

Digitization is revolutionizing retail

For Boots, digitization is revolutionizing the retail sector, with fintech playing a pivotal role in driving this transformation. The surge in fintech adoption is largely fuelled by the growing emphasis on cybersecurity in the face of increased e-commerce activity and associated security threats. Fintech solutions are enhancing online identity authentication and enabling financial institutions to combat fraud and money laundering effectively.

This means that through innovative and cutting-edge payments systems, Boots will take the opportunity to use borderless payments and eliminate intermediaries. Cross-border transactions will be faster, secure, and cost-effective. 

Boots has been enhancing the global shopping experience, while fintech services such are streamlining cross-border transfers. Furthermore, fintech is driving hyper-personalization in retail, simplifying payment processes, and delivering tailored experiences.

In the future, digitization and fintech will eliminate barriers to fast, cross-border transactions. This evolution is reshaping Boots’ retail businesses by  establishing an efficient e-commerce ecosystem.

Increase in online retail

Earlier this week, Boots revealed a surge in online shoppers and a growing preference for own-brand labels, both of which have contributed to the company’s increased sales during the latest quarter. Boots’ own product ranges have experienced remarkable popularity, reflecting consumers’ pursuit of value. Meanwhile, Walgreens Boots Alliance (WBA), the company’s US owner, disclosed a significant decline in net quarterly profit due to decreased demand for COVID-19 vaccines and testing.

Over the three months ending in May, Boots observed a notable 13.4 percent rise in retail sales compared to the same period last year. The increase was primarily driven by a surge in online shoppers, with sales on the digital platform soaring by 25 percent during the latest reporting period.

Boots highlighted the exceptional performance of its “Everyday” essentials label, which includes 60 toiletries and personal care products priced below £1.50. This range experienced a remarkable volume growth of 40 percent, indicating an increased number of products sold. The company attributed this trend to consumers’ preference for more affordable options amid economic constraints.

Boots reported an increase in the frequency of customer visits, signifying a shift in consumer behaviour compared to other major personal care retailers such as Unilever, which have seen sales growth driven by higher prices rather than increased purchasing. Notably, beauty products, particularly skincare items, emerged as best sellers during the latest period, with sales experiencing an 18 percent year-on-year increase.

Sales growth in pharmaceuticals

The company’s pharmacy division witnessed a sales growth of 5.7 percent  propelled by the demand for hay fever products and over-the-counter medication, including the successful launch of its erectile dysfunction range, Eroxon.

Notably, WBA, the parent company of Boots, abandoned its plans to sell the UK retailer last year after considering several takeover proposals, one of which valued the company at approximately £5 billion. The Walgreens merger deal in 2014 had valued Boots at around £9 billion at the time.

Seb James, the managing director of Boots UK and ROI, expressed satisfaction with the company’s performance and the growing number of customers choosing to shop at Boots. He attributed their success to their focus on offering customers the best in healthcare and beauty, as well as their unwavering commitment to providing exceptional value. James particularly praised the popularity of Boots’ own brands, including the outstanding performance of No7.

 

Related content:

Former advertising executive is Twitter’s new CEO

AIBC Insight: Impact of fintech on Commercial Real Estate

Abu Dhabi Securities Exchange welcomes first listing from UAE

Stop Press ! Find out more about AIBC Asia Summit