How Walgreens is Transforming the Traditional Drug Store
As a 112-year-old brand steeped in a traditional brick-and-mortar history, Walgreens isn't what you would consider a digital pioneer. Yet the drug store chain has been forced to evolve its business to remain relevant for today's digital-savvy consumers. The transition has admittedly been a slow process, but it's taking shape.
In a keynote presentation yesterday at the Shop.org Annual Summit in Chicago, Walgreens’ President and CEO Greg Wasson detailed how the company is embracing digital throughout its organization, from its e-commerce site to 10 mobile apps to its retail stores.
With the brand mantra of happy and healthy made easy in mind, Walgreens has identified three focus areas for its ongoing digital transformation: create a wellness experience; transitioning the traditional community pharmacy; and creating an unprecedented global platform. The final one is quite a sea change for Walgreens, Wasson said. Walgreens’ strategy for decades was to find the best corners for its brick-and-mortar stores. While that's still part of the company's plans today, fostering digital innovation has joined it as an overarching goal.
In 2009, Walgreens scaled back its new store openings from 8 percent to 9 percent increases year-over-year to two percent to three percent increases. The move freed up capital, bandwidth and resources that's enabled Walgreens to make digital innovation a priority. To help in its efforts to create a global platform, Walgreens entered into a strategic partnership with Alliance Boots, the largest drug store chain in the U.K. In addition, Walgreens partnered with pharmaceutical drug company AmerisourceBergen here in the U.S.
With its acquisition of drugstore.com in 2011, Walgreens now operates five e-commerce sites — Walgreens.com, drugstore.com, Beauty.com, VisionDirect.com and DuaneReade.com (which Walgreens acquired in 2010). The drugstore.com acquisition helped Walgreens to not only gain 60,000 more SKUs, but also seasoned e-commerce professionals and an extensive distribution network. Now with 8,000 distribution centers across the country, Walgreens is able to offer same-day delivery for many online purchases.