Duane Reade at 40 Wall Street. (Photo via Shao-yu Liu.)

It’s not every weekend that Kerri Gristina, a schoolteacher living in the Bronx, manages to round up her three daughters and load them into the car for a Manhattan outing. When she does, she’ll take them to a Broadway play, to a museum or just to frolic around Central Park. But no matter what else they do that day, the busy mom always manages to carve out some time for one special stop along the way.

“They have natural options, organic options,” Ms. Gristina, who writes a blog called Raising Three Savvy Ladies, told The New York Observer of her favorite place to buy beauty products in NYC. “It’s like a designer store. Maybe it costs more, but having more variety is worth it.”

No, it’s not the Laura Mercier or Bobbi Brown counter at Bergdorf’s. Ms. Gristina’s guilty primping pleasure is Duane Reade.

Seriously.

“I can’t always go to a Sephora with three kids,” she said, praising the chain store’s LOOK Boutiques, where quickie makeovers are provided for free by professionals. “At Duane Reade, I can still get a mom moment—a me-time moment.”

And Ms. Gristina isn’t the only one singing hymns at the altar of the mega-chain. “I have been in NYC less than a month and they recognize me when I go there. It’s like Cheers. It’s awesome,” reads one recent Yelp review. “A girl I dated once called Duane Reade her secret lover for all that he provided for her,” another enthusiast wrote about the franchise’s 42nd Street location. “At first a joke, I started to get jealous after a while.”

“They really are like a literal urban oasis,” said Mary Elizabeth Williams, a culture writer at Salon who has spent the past two years battling stage IV melanoma. “They have this neutral quality of an airport lounge,” she told The Observer. “When you’re in a real crisis moment of your life, the mundane becomes the most important.”

Duane Reade at 40 Wall Street. (Photo via Shao-yu Liu.)

But Duane Reade has done more than just master the mundane. This is a drugstore whose flagships offer everything from sushi and fro-yo stations to juice bars and in-store nail and hair salons. If you need assistance, you can ask a hologram floor greeter. Or you can help yourself at the digital makeup counter, where, via a computerized snapshot of your face, you can see what new products would look like without ever having to use a tester.

The 40 Wall Street location in particular, which opened in 2011, resembles a futuristic shopping mall or an underground Japanese city more than a place to pick up prescriptions. The reaction to a chain store opening in a landmark location could have gone either way, but this ribbon-cutting proved an unmitigated success: customers loved it, the store won a prestigious design award, and the critics were raving. The New Yorker and Women’s Wear Daily both gave the store high marks, but really, the litmus test was the fact that such publications wrote about the opening of a franchise drug store in the first place.

The party thrown for the opening of the 40 Wall Street flagship—attended by bloggers, journalists (The Observer included), design students and busy attorneys alike—wasn’t just a game-changer. It was a mood-changer.

Duane Reade's juice bar. (Shao-yu Lin.)

If ever there was a store in need of a makeover, it was Duane Reade. The problems the franchise faced—both before and after it was acquired by Walgreens in 2010 from Oak Hill Capital Partners—have been well documented. Former CEO Anthony Cuti and CFO William Tenant were sentenced to three years in prison for fraudulently misrepresenting the companies finances. The pharmacies were ranked dead last in customer satisfaction, according to J.D. Power and Associates, and the stores frequently received low health grades. (Duane Reade was once forced to pay $200,000 out in civil court for peddling drugs and products past their expiration date.)

The blog I Hate Duane Reade, founded in 2007, served as a mouthpiece for customers and employees who had complaints about the mega-chain—and they had many. The combination of photos of the understocked, overcrowded stores and relatable tales of misery made the site a viral hit, garnering mentions in The New York Times, Gawker, USA Today and The Wall Street Journal. It was the quintessence of what was wrong under the old regime.

The most damning bit of criticism came from Martha Plimpton in a 2007 New York magazine interview. Asked what she hated most about the city, she replied: “The dead-eyed pharmacy people at Duane Reade ... It’s always a journey into the heart of darkness.”

The founder of IHDR (who wished to remain anonymous) told The Observer that the idea came while sitting with friends and comparing horror stories about the drugstore. “[We] realized that we all had the same issues. We wondered if everyone else felt the same way. Turns out they did.”

Duane Reade at 40 Wall Street. (Photo via Shao-yu Liu.)

The Walgreens buyout had an immediate effect, curbing the criticism. IHDR published its penultimate post in February 2010. And four months after the purchase, Walgreens boasted in a quarterly meeting that sales were up, with Duane Reade contributing 2.8 percent to the total increase.

Still, altering the essence-du-Duane took more than a quick-fix change of ownership. It’s been a long road back to Gotham’s good graces for the store that boasts the most sales per square foot in the industry.
While still under the aegis of Oak Hill Capital Partners, Duane Reade began its facelift, courtesy of the strategic branding firm CBX. The mission: redesign its stores and rehabilitate its personal brand. No easy task.

(Photo via Shao-yu Liu.)

Joe Bona, president of the retail division at CBX, worked closely on the in-store redesigns and in-house brands. “People need to still walk in and recognize that it’s a Duane Reade,” he said of the new and improved stores. In other words, it was all about atmosphere. Or as the franchise’s revamped slogan put it, “New York Living Made Easy.”

“One of things we know through research,” Mr. Bona said, “is that when you create a wider aisle, [customers] feel less pressured and they tend to linger a bit longer.”

And relaxation is a key theme at the new Duane Reade: a luxury that hints at the store’s new upscale aspirations. After all, as any New Yorker knows, time equals money. So if you have time to meander and browse instead of rushing to the express lane, you must have minutes—and therefore cash—to burn.

When Ms. Williams ducks into her favorite Duane Reade location, right next to Sloan-Kettering, where she receives cancer treatment, for example, she is always amazed to see how many customers just seem to be loitering. “At least 50 percent of the people are just hanging out,” she marveled.

“I guess that’s what’s in it for me too,” she added. “I need to regroup.”

Ms. Williams’s reaction to Duane Reade is no accident: through wider aisles and warmer fluorescent lighting, landscape windows and perfumeries, Duane Reade represents the latest triumph of psychographics, a research field specifically tailored to the psychological states of customers in retail environments.

The nail bar. (Photo via Shao-yu Liu.)

Dr. Archana Kumar, an assistant professor in the department of marketing at Montclair State University, might be described as a psychographicist. In a phone call with The Observer, she broke down this almost-subliminal messaging.

“Blue, green and violet are calming colors,” she said, explaining that to create a “calming effect,” a store like Duane Reade would have to change its color palette from “agitating” colors, like red, to warmer ones that are “associated with feelings of peacefulness and happiness.”

Is it any coincidence that Dr. Kumar’s calming colors are the exact three that Duane Reade happened to choose for its redesign? Probably not.

Other subtle changes have been effective as well. By designing and promoting the Duane Reade food-and-beverage brand DR Delish as a more expensive alternative to its other off-label brand, Cityscape, for example, CBX was able to convince customers that the store’s self-made tiers correspond to product quality. It sacrificed one label to the hordes of coupon-clippers so that DR Delish might fare better against the big-name brands.

But here’s the weird thing: sales of both DR Delish and Cityscape doubled between 2009 and 2011. People, it seemed, were ready to pledge allegiance not only to Duane Reade as a store, but to its products as well—and across all price points.

Some of Duane Reade’s newfound fans may also be attributed to the store’s vastly improved social media presence. On Ms. Gristina’s blog, she’s penned such lyrical posts about the Walgreens-owned chain that you might believe she was being paid by the company.

Duane Reade at 40 Wall Street. (Photo via Shao-yu Liu.)

In fact, she attempted to become one of the store’s 10 “VIP NYC Bloggers”—a contest whose winners would receive $200 a month in store credit in exchange for blogging, tweeting and Facebooking their love for the store.

While some might read this contest as part of a cynical branding attempt by a faceless corporate entity, Duane Reade seems to be investing a huge amount of time and considerable effort to draw in digital consumers, most of whom are happy to receive the love and give it back.

Last year, the Duane Reade Twitter feed—which often promotes local events like readings at Housing Works—surpassed even its parent company’s by skyrocketing from 15,000 to 390,000-plus followers in seven months, making it the most popular drugstore on Twitter. (Pretty impressive when you consider that Duane Reade only has stores in the New York City area.)

(Photo via Shao-yu Liu.)

There have been celebrity endorsements too, like when Glee actor Cory Monteith, who is based in L.A., tweeted “Yeah, I actually started following @DuaneReade. so what? what if I need a heads up on everyday products I need.” That comment has been retweeted more than 350 times.

As silly as this all might sound, these efforts have translated into revenue: when the store put forth another Internet-based contest last year as part of its “Show Us Some Leg” campaign, sales of Duane Reade-brand hosiery jumped 40 percent.

Still, none of this Web 2.0 magic would work if people had a negative impression of the stores themselves. But the rehabilitation is working, and once again Duane Reade feels like an integral part of the city. What’s more, individual store locations have taken to embracing the character of different NYC neighborhoods.

At the Soho location (on Spring Street, another repurposed former bank), for instance, you can find obscure art and fashion magazines. The Times Square location sells a ton of “I Love New York” memorabilia. Wall Street has its shoe-shine parlor and nail salon. And in Brooklyn, as much as they fought it, hipsters have found the growler bar and walk-in beer fridge in Williamsburg a highly persuasive reason to shop at a chain.

As Ms. Williams put it, “Duane Reade provides a safeness: If you’re picking up your cancer medication while someone else is picking up tampons and there’s a guy picking up a six pack, it’s like this great big circle of life.”

And that’s something you can’t put a price on.

Courtesy Getty Images

Over the summer, Steve Stoute, the CEO of the brand-marketing firm Translation, went to Wimbledon with his friend and business partner, the rapper Jay-Z, to cheer on Rafael Nadal during the Spaniard’s fourth-round battle with Juan Martín Del Potro. With the match tied in the third set, BBC cameras spotted them. “The man is still here,” said BBC tennis analyst Boris Becker in his heavy German accent. “The Jigga Man, that’s what they call him—Shawn Carter.”

Where most viewers saw a star-sighting. Mr. Stoute saw a “tanning moment.”

Mr. Stoute, in his recent book The Tanning of America: How Hip-Hop Created a Culture That Rewrote the Rules of the New Economy (2011, Gotham Books), defined “tanning” as “the catalytic force majeure that went beyond musical boundaries and into the psyche of young America.” That’s a pretty thick slice of marketing-speak, but the gist of it is simple: hip-hop has radically changed culture and corporate America.

And Mr. Stoute has had a central role in the transformation.

“That wouldn’t have happened 10 years ago,” Mr. Stoute said of Becker’s acknowledgment of Jay-Z. “Prince William was there that day, and for Jay-Z to get recognized at that setting, yeah, it’s a tanning moment.”

Around the turn of the millennium, Mr. Stoute, then a successful record company executive, made a gutsy career change. He left his lofty position as president of urban music at Interscope/Geffen/A&M Records and dove into advertising and marketing. He is now the go-to guy for Fortune 500 companies chasing the youth and urban markets. Mr. Stoute paired Allen Iverson with the gritty rapper Jadakiss for a beloved Reebok commercial; he got Justin Timberlake to record a McDonald’s jingle; and he tapped Jay-Z for a Hewlett-Packard campaign. (Before Mr. Stoute’s involvement, HP had been circling Robert Redford and Drew Barrymore.)

Translation’s specialty is “collaborative strategic consulting,” but Mr. Stoute sees his role in somewhat simpler terms.

“I just try to tell the consumer truth,” he told The Observer.

It should be noted, however, that consumer truth isn’t always the same as gospel truth. That Justin Timberlake jingle, for instance, was originally released as a song. Only after the world was humming “I’m Lovin’ It” did McDonald’s introduce its new tagline, with JT as its spokesman.

It’s been an effective strategy. In November 2008, Mr. Stoute was inducted into the American Advertising Federation’s Hall of Achievement. And according to Ad Age, Translation, which operates under its parent company Interpublic, pulled in $9 million in revenue in 2010.

On a recent Tuesday afternoon, Mr. Stoute was sitting on a couch in his Times Square corner office. Although he known as a bit of a dandy, on this occasion he was clad in gym clothes—a black V-neck T layered over a white V-neck, gray athletic shorts, black ankle socks and no shoes. The wall was plastered with photographs of Mr. Stoute with his many famous friends, and framed photos of icons such as Sidney Poitier and Muhammad Ali.

Mr. Stoute began the conversation with one of his favorite “tanning moments”: The story of how Jimmy Iovine landed a Rolling Stone cover for Dr. Dre and Snoop Doggy Dogg in 1993. “That was Jimmy Iovine walking in and saying, ‘Jann, these guys are rock stars. They are Mick and Keith,’” Mr. Stoute said. “It takes a guy like Jimmy Iovine—he had so much rock ’n’ roll credibility from U2 and producing Patti Smith. Who else is gonna do that? Russell Simmons? They weren’t going to listen to him.”

Mr. Stoute would like to see more magazines adapt the way Rolling Stone did. “All those magazines are fucked up like that. Vogue is the same way. It’s all those people that come from the old school and believe that [hip-hop] wasn’t sustainable, so therefore they don’t want to buy into it and they push back on it. Vogue did the exact same thing. Anna Wintour now hangs out at Kanye’s shows and hangs out with Pharrell and hangs out with Puffy. She does all that shit now. Meanwhile, there is a lack of African-Americans who have graced that cover. Now, all of a sudden, it’s Beyoncé, it’s Rihanna. Now, she’s sitting with Nicki Minaj [at the Carolina Herrera Spring 2012 show].

“She’s tanning because she has to,” he continued. “She has to. She’s gonna put Blake Lively on the cover again?”

Mr. Stoute, 41, was born in Queens Village, the son of Trinidadian immigrants. His father was a marine engineer; mom was a nurse. He spent his formative years grinding away at after-school jobs—he shoveled snow, erected tents at flea markets, delivered the New York Daily News and Newsday, sung Christmas carols and hawked fire extinguishers—but dreamed of being a professional football player. He was a starting running back at Holy Cross High School in Brooklyn, but began hunting for a backup plan after separating his shoulder. His father suggested becoming an auto mechanic. Mr. Stoute remembers his father’s reasoning: “It’s a craft that they can’t take away from you,” he said.

Instead, he bounced around five colleges and began working in real estate, signing homeowners up for mortgages—this was back in the early 1990s, well before the boom and eventual bust. He then left the mortgage market after realizing he could earn more in the music industry. It wasn’t about his love for the music, he said, unabashedly. “No, it was opportunity,” he said. “[Hip-hop] was blowing up. In ’91, ’92, the arrow was pointing in one direction.”

Through mutual acquaintances, Mr. Stoute hooked up with comedy rappers Kid N’ Play and quickly became the duo’s road manager. But his big break occurred in the mid-1990s, when he started managing the rapper Nas. Under Mr. Stoute’s guidance, the Queensbridge emcee adapted a more commercial, radio-friendly sound. The strategy worked. His 1996 album It Was Written was certified double-platinum, but finding the right balance between art and commerce proved challenging. “Managing Nas taught me a lot about respecting artists,” Mr. Stoute said. “You got a crash course in that because you were dealing with a guy who, money didn’t matter to him. Nor did success. He could have been in The Cider House Rules—he didn’t want to do it.” Mr. Stoute shook his head. “Brands were calling—he didn’t show up for some shoots. Nas wrote songs on the Men in Black soundtrack. He could have wrote the whole album for Will Smith but he didn’t want to show up to the studio to write records for Will Smith.”

Men in Black was a huge hit. The movie grossed $587 million worldwide and the soundtrack, which Mr. Stoute executive produced, was certified triple platinum. He was more impressed, however, by the success of a product placement—sales of Ray-Ban sunglasses shot up 500 percent after being promoted in the film.

By the late 1990s, with the advent of file-sharing and mp3s about to turn the music industry on its head, Mr. Stoute decided to change careers. In 1999, he partnered with renowned adman Peter Arnell—best known for the iconic DKNY campaign—to form the marketing company PASS. (The company couldn’t obtain certification as a minority-owned business and in 2002 was sold to a Hispanic agency, Cultura; Mr. Stoute remained chairman until 2003.)

Mr. Stoute was a quickly adapted to this new world. “Steve Stoute has the best instincts creatively and strategically on pop culture, marketing and youth of anybody I’ve ever met,” Mr. Arnell told Adage.com. (Mr. Arnell’s own instincts were more questionable; he was the force behind the disastrous 2009 Tropicana redesign.)

“Steve is an open person,” former Reebok CEO Paul Fireman told The Observer. “He sees himself on a long journey on which he keeps meeting people and building strategic pieces along the way.”

“He’s curious about everything,” added Vanity Fair editor in chief Graydon Carter, a friend who wrote the foreword to Mr. Stoute’s book. “He’d ask about your clothes. He’d ask about what you’re doing. He set about making himself into something and, God knows, he did it.”

Steve Stoute has strong opinions on branding. He was offended, for example, by what he considered the ham-handedness of Kodak’s recent campaign featuring Rihanna and a slew of other musicians.

“Marketing? You call that marketing?” Mr. Stoute asked. “You’re trying to skip the entire process and just hire some celebrities to save your ass. That’s the epitome of ridiculous. Marketing? Kodak?” He was nearly shouting. The commercials, he said, didn’t convey the function of the product. “Can you imagine how stupid that is? What am I gonna do with a Kodak? It’s not a smart phone. If I don’t tell you why you need it, why would you buy it? Because Rihanna and Pitbull said so? Yeah, congratulations.”

The Kodak campaign was “of limited duration,” according to a company spokesperson and was only for the So Kodak line. “Our data showed that it was effective in raising brand and product awareness among the target audience.” It also won an Addy Award, "so obviously some difference of opinion out there," the spokesperson added.

He can be just as brutal with potential clients. Back when he first partnered with Reebok, he told Paul Fireman flatly that the company couldn’t compete with Nike by marketing their shoes as superior for athletes.

“I think most people, especially when they are interviewing, tend to not be as forthright as I would like,” Mr. Fireman said. “Most of them think that by telling you what you’re doing wrong they’re going to insult you. Steve pointed out our disconnect from the consumer. He is very blunt but not rude. You’re either going to accept it or you’re not. I thought it was refreshing.”

Mr. Stoute is most proud of having pioneered the practice of surreptitiously embedding marketing messages into the pop cultural products. He followed up the successful McDonald’s-Timberlake switcheroo with a similar deal involving Wrigley’s and Chris Brown. After Mr. Brown’s song “Forever” became a hit, it was revealed that the familiar lyric “Double your pleasure” was no coincidence—the song was a gum jingle. Before radio stations, deejays or average listeners knew they were all offering free advertising time—and mindspace—to a major corporation, the song was embedded in the culture.

Mr. Stoute was a bit perplexed by the anger the stunt engendered. “If you got upset because it was really a brand message intertwined with the song you loved, if that bothered you, shame on you for getting that emotional about something you loved anyway,” he said. “I didn’t understand that. Gawker and all those guys were writing stuff about me. Say anything you want, but its brilliant, it’s absolutely brilliant. It’s stunning. It’s so smart. You actually made a song and in the song, it said, ‘Double your pleasure/double your fun.’ And that worked. And then we came back with a commercial behind it and when it was revealed, it was a home run.”

Mr. Stoute then looked at his phone. It was almost 6 p.m. “I gotta get ready to get out of here,” he said. He had tickets that night for The Mountaintop with Samuel L. Jackson and Angela Bassett.

“If you thought the song was sponsored by a brand,” he added, “you would not have been open-minded about how the song made you feel. All I did was remove that filter.”

New York Pride (via CafePress)

For anyone who lives in the city, the iconic "I Love New York" logo usually brings to mind millions of tourists streaming into Times Square like so many locusts descending on a neon crop field. There are entire stores in the city dedicated to selling products featuring the image of a heart where the l-word should be. (For a visual example, look at the image to your left.)

But the "I Love New York" brand is more than just a cheesy tourist item: it's a state-owned logo that made $1.83 million dollars in licensing fees this year alone. Which when you think about it, is really creepy. You don't usually go into stores like Macy's or Saks and expect your money to be going right back into the state government's biggie bank, but that's exactly what has been happening ever since New York began selling the trademark in 1994 to everyone from high-end couture lines to novelty shops. The state is even launching its own brand of "I Love New York" scene with perfume company Bond No. 9.

"I Love New York" is even making New York rich when it's sold out of state (or country). Samira Ali from CMG Worldwide, the state's licensing agent, told The New York Daily News, "We are huge in Japan. That is our second-largest market."

We're all for bolstering New York's tourism industry (which is where all the millions from the licensing deals are going), but it's a little Big Brother-y to have the state making deals with fashion lines and suing anyone who tries to use the "I Heart _" trademark without forking over dough. Especially since the logo was given to the state as a freebie by graphic designer Milton Glaser in 1975, and he's never seen one red cent off royalties for the iconic image.