Put the customer first and the rest will follow. That principle has guided Walgreens as it revamped its retail offering over the past 18 months.
Certainly, industrywide, the big story of 2020 and 2021 has been pharmacies’ ability to scale up COVID-19 testing until late 2020, when they began administering millions of COVID-19 vaccine doses. At Walgreens, the company is not satisfied to just be helping lead the charge of immunization. It has, over the last year and a half, transformed its retail offering to include a host of capabilities and initiatives that are positioning the company for the future.
In the early days of the pandemic, while stocking necessary personal protective equipment and rolling out same-day delivery through Postmates (and subsequently growing its stable of third-party delivery partners), Walgreens debuted drive-thru, curbside and in-store pickup capabilities. The retailer built new features into its mobile app and website, and unveiled its revamped loyalty program — myWalgreens.
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Alongside its strengthened omnichannel infrastructure, Walgreens is working to build a constantly relevant assortment throughout the store — from health and wellness to beauty, seasonal and fresh. The company also has debuted a store credit card and a bank account product as it looks to grow its financial services capabilities.
For all these reasons and more, Drug Store News has named Walgreens its 2021 Retailer of the Year. In exclusive interviews with DSN, executives from Walgreens — which currently operates more than 9,000 stores in all 50 states — outlined the growth that the company has seen since COVID-19 surged onto the scene, and how its pandemic-era efforts have positioned it well in retail and prepared the company for future growth.
Identifying strong partners
Though Walgreens has many strengths as a retailer, one of the areas it has excelled in recent years has been its ability to choose partners that help bring new services and capabilities to its customer base.
From its work with third-party delivery companies and its growing union with VillageMD, building primary care clinics at Walgreens stores, to the Adobe and Microsoft partnership that supports its myWalgreens capabilities, the retailer works with partners that can help achieve its goals quickly.
“We work with top-tier service providers, whom we believe can help us enhance the customer or patient experience and ultimately provide ways to improve the health of communities,” said Walgreens president John Standley. “Leveraging this collaboration model allows our teams to test and try new initiatives and approaches, scale services quickly to meet changing customer needs, coordinate care amongst healthcare providers, and learn and grow from one another.”
Standley noted that the company’s partners “are household names who have distinguished reputations and expertise in their areas of business.”
“When we were doing that, a large consideration was how do we really continue to lead in convenience and be able to deliver products as quickly and efficiently, and as safely as we can for our customers,” said Stefanie Kruse, Walgreens vice president and general manager of digital commerce and omnichannel. “Our partnership approach really revolves around ‘What is the patient and customer need, and how would a partner help us meet that and achieve it faster than we could just by doing it on our own?’”
Working with Adobe and Microsoft has created the backend capabilities to strengthen the company’s digital and omnichannel build-out, according to Alyssa Raine, Walgreens group vice president of customer marketing platforms.
“It’s completely changed how we are working, and without question how we will work moving into the future,” she said. “As you look at customer experience, we are focused on our owned channels — whether that be in store, app, email, etc. — and Adobe and Microsoft have allowed us to move parts of our data to the cloud and then be able to leverage them to orchestrate holistic customer experiences versus them being siloed.”
In addition, the VillageMD partnership that has seen dozens of Village Medical at Walgreens locations open is part of strengthening the retailer as a healthcare destination.
“We believe that primary care provided by board-certified physicians that is anchored in pharmacy and enabled by digital tools will help transform the delivery of health care,” Standley said. “In today’s complex healthcare environment, this coordinated care model is more important than ever. By combining the expertise of both the physician and pharmacist together, patients may benefit from a seamless experience that saves them time and money, and helps to better their overall health and well-being.”
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Standley’s acknowledgment that myWalgreens enables insights that can personalize the shopping experience gets at the heart of the effort, as Alyssa Raine, Walgreens group vice president of customer marketing platforms, describes it.
“We launched myWalgreens not as a loyalty cash program, but really as a customer engagement platform,” Raine said. “It’s not just about loyalty points, but it’s really about how can we help people improve their health outcomes and how can we do that in a way that is very inclusive, since we serve over 9,000 micro-communities that have diverse needs.” She noted that the ability to tailor a digital experience to the individual shopper is something that strengthens the company’s relationship with patients.
“As soon as we offer more personalized experiences in any of our owned channels, we see that the engagement with our customer increases considerably,” Raine said. “We’re increasingly focused on how we can be building out these personalized touchpoints and experiences for our customers because it works. People know that you understand them better, that you’re taking care of their needs, and that you see them for the person they are and you value that.”
Delivering on Health Needs
Even the most robust digital and omnichannel capabilities are only as good as a retailer’s actual product offerings — which have had to evolve across the store as consumer behavior changed over the course of the pandemic.
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We always put our customers first and continue to listen to their needs as we work closely with our suppliers and owned brand to pivot offerings across categories,” said Kirk Hanselman, interim chief merchandising officer. “In the early days of the pandemic, our teams moved quickly to ensure our customers had the necessary masks, hand sanitizers, acetaminophen, thermometers and cleaning suppliers they needed. We also realized families would gravitate towards family-focused activities like games and puzzles, so the team quickly leaned in that direction and that’s an area we continue to push towards. From a health-and-wellness perspective, we moved quickly on immunity and, more recently, during the spring and summer, on COVID OTC testing.”
The company’s new digital infrastructure has played a key role in helping identify and deliver on consumer needs, Hanselman noted.
“Our omnichannel approach is an increasingly important part of our merchandising strategy,” he said. “We’re leveraging MyWalgreens as the central touchpoint with our customers, and we’ve developed strategies to allow for seamless shopping experiences.”
Robert Tompkins, group vice president and general merchandise manager for health and wellness, said one of the biggest trends he is seeing is proactive efforts on the part of consumers to stay healthy — and a broader opening of minds to try new things in various health categories.
“It actually is a really unique time in that folks are willing to try new things to support their immunity, to support their desire to get a good night’s sleep, to deal with the stress that they’re experiencing,” he said. “We’re seeing a lot of willingness to test and trial, which I think is a great opportunity both for us and for our innovative supplier partners.”
The preparedness mindset that drove trips in the early days of the pandemic is sticking around and is becoming particularly important among patients with chronic conditions who understand that tracking and managing their conditions will mean less frequent doctor visits and less potential exposure to COVID-19.
“Health testing really is an area that people are interested in — understanding their pulse ox levels, their blood glucose and blood pressure levels,” he said. “Obviously, we’ve seen adoption of in-home COVID tests, and I think that’s kind of opening a lot of customers’ minds to the availability of at-home health testing in a broader sense. Maybe they hadn’t done a home test before. Now they have and it’s really opened their eyes to this great ability to self-monitor your health through a lot of the products that we sell.”
Walgreens’ owned brands also play a key role in health and wellness by bringing innovative products that can deliver on customer needs and value. Andrea Collaro, Walgreens senior director of brand management and product development for private label health and wellness, said the current retail environment and shoppers’ focus on value is fruitful soil for its owned brands.