Walgreens thinks big with multichannel plans
WHAT IT MEANS AND WHY IT’S IMPORTANT — Almost two-thirds of consumers live within 3 miles of a Walgreens. For the rest of America, Walgreens is using its multichannel strategy to get even closer. The deal with Drugstore.com considerably accelerates the chain’s plans.
(THE NEWS: Walgreens boosts online presence with Drugstore.com acquisition. For the full story, click here.)
To be sure, driving e-commerce solutions has been a critical part of Walgreens’ plan for some time now. A major overhaul of the company’s website at Walgreens.com more than a year ago has fed massive spikes in traffic — up 50% in the last two years, SVP e-commerce Sona Chawla explained to investors at the company’s annual analyst day in November 2010. More than a half-million people visit Walgreens.com each day.
Combined with some of the other important investments it has made, including ordering online and picking up at the store and its mobile applications, Walgreens can serve the customer on her terms. And with more than 85% of Americans carrying mobile phones with them wherever they go, basically Walgreens can be wherever the customer is, virtually speaking, and that “is having a multibillion-dollar impact on our business,” Chawla said.
How? Well, online retail sales certainly continue to grow, but there’s more than one way to skin a cat online. “What’s also growing is what is called Web-influenced retail sales,” Chawla noted. “The Web [will] influence half of all retail spending in 2012, and if you look out to 2014, it’s 53%.”
It’s building fast — especially for Walgreens.
”Our customers are already telling us they multichannel,” she explained. “When we do our surveys, almost half of our site visitors say their next action is to go to Walgreens. Last year when we did the survey, it was 40%; now it’s 50%.”
It is an area in which Walgreens clearly is a leader among retailers because Walgreens has enabled its website to tie into its store inventory systems to enable customers to check product availability at their local store. Only 22% of retailers who were pursuing a similar multichannel approach had this capability, Chawla said in November.
Back in November, Walgreens had just introduced a mobile application that enables customers to scan the bar code on their prescription label to order a refill in a matter of seconds. According to the company, during its recently reported second-quarter earnings period, half of all refills that come in from a mobile device are using the refill by scan feature (as opposed to using the regular mobile app).
Make no mistake: Walgreens isn’t doing this to be like the annoying guy who always has the latest gadget just to piss people off. (“You mean you DON’T have the new 10G iPhone?!”) There’s a lot of money in the multichannel consumer. “We did a recent study of our customers, and we found that customers who use multiple channels are three times more valuable than customers who use a single channel,” Chawla said at the November analyst meeting.
Factor in the more than 3 million loyal Drugstore.com customers, and the more than 60,000 new products that now are part of the Walgreens online mix, and you get a sense of just how big last week’s acquisition could be for Walgreens. It’s huge.
Dollar General keeps growing
GOODLETTSVILLE, Tenn. — Dollar General maintained its momentum in 2010 by achieving record sales, profits and expansion; and it’s looking like 2011 will bring more of the same. Last year, Dollar General opened 600 new stores and remodeled or relocated another 504 units to end its fiscal year on Jan. 28 with 9,372 stores. The additional square footage combined with a 4.9% same-store sales increase enabled the company to grow total sales by 10.5% to roughly $13 billion.
Those sales were profitable too, with margin rates expanding and expenses declining. Full-year earnings nearly doubled to $628 million, or $1.82 per share, from the prior year’s $339 million or $1.04 per share. The company’s operating margin increased to 9.8% of sales compared with 8.1% the prior year, while expenses accounted for 22.3% of sales, compared with 23.2% the prior year.
Dollar General chairman and CEO Rick Dreiling noted the company had a great 2010 and that give it a tremendous foundation for continued growth.
“Our track record of executing our key initiatives over the past three years gives me confidence that the Dollar General team can successfully execute our 2011 goals,” Dreiling said. “We are off to a strong start in 2011. Even in a challenging macroeconomic environment, we expect to deliver strong financial performance in 2011, including top line growth of 11% to 13% and same store sales growth of 3% to 5%.”
American Greetings presents a birthday card ‘Surprise’ for kids
CLEVELAND — American Greetings is making kids’ birthday cards extra special with its Surprise Inside line.
Each Surprise Inside card features a surprise gift pouch that the child can open to reveal a small toy that coordinates with the card’s theme, the company said. A sticker reveals to the sender what the secret gift will be.
"We know that moms love to surprise their kids with something new, and so we’re always working to get the most exciting and innovative products on the market right into her hands in the places she’s already shopping," said Carol Miller, executive director of new product concepts at American Greetings. "Surprise Inside really brings the birthday wishes in the card to life and gives the child a fun memento of the occasion."
Surprise Inside greeting cards are available at participating drug chains, grocery stores and mass retailers nationwide, as well as in American Greetings and Carlton Cards retail stores.