Walgreens is pursuing digital in a “deliberate and strategic way,” according to its CEO.
“Sometimes I feel like a B-52 bomber where I’m clearing a path to a 112-year-old brick-and-mortar business,” Greg Wasson confessed to a packed room of retail brands and marketers today at the Shop.org summit in Chicago. “Digital wasn’t something Walgreens was born with. I’ve tried to remove roadblocks and doubts in the organization to get there.”
He added, “We’ve built it organically and through our acquisition of Drugstore.com. We’ve staffed up in mobile engineering, analytics and user experience and design.”
Walgreens has 8,000 stores in 50 states and more than 350 health clinics in drug stores in 20 markets. The company employs 240,000 and counts 45 million customers who walk through its physical store doors each week and another 14 million who access it online and on mobile per week.
Wasson was previously president and COO. After his 2009 appointment to the top spot, he said, “We as a management team really stepped back and evaluated our strategy,” he said. About $840 million was spent to fund new store openings with additional funds appropriated to develop innovative retail concepts in-house.
The company bought Duane Reade for $1.1 billion in 2010 followed by Drugstore.com (along with properties Beauty.com, SkinStore.com and VisionDirect.com) for $429 million in 2011. It has since inked a deal with global beauty distribution network Alliance Boots.
The company now has 10 iOS, Android and Windows apps that connect consumers to weekly ads, rewards, coupons and “refill by scan” prescription apps. At present, 40% of Walgreens’ web traffic comes from smartphones while tablets account for about 10%. Fifty percent of Walgreens users that have downloaded its apps use the apps from within the store environment.
According to Wasson, Walgreens pharmacies fill more than one prescription every minute from a mobile app. A “Transfer By Scan” app allows consumers to bring in prescriptions from other drug stores “and we notify patients via email and text through ‘Refill Reminders’ that their prescription will be ready at their local store within an hour. Walgreens has also been active on the rewards and loyalty front, becoming one of the first brands to offer scannable coupons for users who checked in on Foursquare, as well as integrating its loyalty rewards with Apple Passbook to surface in-app coupons to redeem at the register in-store.
More important than the loyalty utility is the “data we collect that allows us to tailor pricing and promotions in-store all the way down to the local level,” Wasson said, adding that “we are mindful of privacy.”
“You don’t stay around for 112 years unless you give people what they want when they want it,” Wasson said. “It can be tempting to let the innovation drive the bus. But, we want to use digital to accelerate who [we] are.”
More importantly, it’s tapping multiple sources of data to get a better picture of the Walgreens consumer. “Our median mobile customer is a 45-year-old woman,” Wasson pointed out. “Our median desktop customer is 52-year-old woman. But, for Refill by Scan, we have regular customers who are over 100 years old.” There is no “one” Walgreens customer and understanding that data, Wasson said, will help the organization in its future marketing efforts.
