Walgreens Boots Alliance Doubles Down on Digital Transformation and Health Care Services
Walgreens Boots Alliance (WBA) is prioritizing the digitization of its business and adding health care services to its stores, as consumer behavior evolves from the COVID-19 pandemic.
“We're now accelerating our plans and we'll be further increasing our investment in digital initiatives in the coming months,” Alex Gourlay, co-COO & president, Walgreens Boots Alliance, said during the drugstore retailer’s recent earnings call. “The pandemic has of course significantly increased demand for omnichannel products and more convenient services.”
Boosting its services, Walgreens and last-mile logistics platform DoorDash just announced a collaboration to offer on-demand delivery to customers in select cities with plans to expand to markets throughout the country. Customers in the Chicago, Atlanta and Denver areas can now order on-demand delivery from Walgreens through the DoorDash app and website. By the end of summer 2020, Walgreens and DoorDash plan to offer more than 5,000 items for delivery on the DoorDash platform, and will expand the service to other major markets starting with Cincinnati, Cleveland, Minneapolis, Oklahoma City, Phoenix, Sacramento and Seattle.
“Our collaboration with DoorDash is the latest example of our ongoing focus on enhancing our customer experience with new convenient, accessible and safe shopping and delivery options,” said Stefanie Kruse, vice president, digital commerce and omnichannel at Walgreens. “We continue to offer additional ways to get essential retail products into the hands of customers at their door stoop or wherever and whenever is most convenient for them.”
In addition to the new partnership, customers can order in advance online and pickup orders at 7,300 drive through windows without leaving the safety of their car, Gourlay said.
Walgreens.com digital sales were up 23% in its Q3 2020 versus prior year,. Total digitally initiated sales were also up around 23% and mobile app traffic was up over 200%.
Boots UK significantly boosted its Boots.com capabilities, investing in micro-fulfillment centers and hybrid stores and more than doubling capacity, which helped drive a 78% increase in Boots.com sales in the quarter, compared with the same quarter a year ago, with continued strong performance in June.
The company is also seeing encouraging response from customers to its digital marketing initiatives, with the ongoing roll-out of mass personalization boosting Walgreens retail sales by 95 basis points in the third quarter.
WBA revealed a strategic partnership with Microsoft and Adobe earlier this month to launch a world-class modern technology and customer data resource, which will form the basis of a new customer engagement platform.
“This will further transform our already successfully retail mass personalization activities, allowing us to create a personal experience for each individual customer and pharmacy healthcare wellness annually,” Gourlay said.
In addition, the drugstore retailer plans to open between 500 and 700 full-service “Village Medical at Walgreens” in more than 30 U.S. markets within the next five years. These full-service doctor offices, co-located at Walgreens stores, will provide comprehensive primary care services and will focus on developing relationships with patients to manage their long-term conditions.
“Once we've completed his initial role out we intend to build several hundred more clinics in at least 20 additional US markets,” Gourlay said. “Very importantly beyond the physical locations we'll be developing home-based monitoring and telemedicine services leveraging VillageMD integrated data and technology and our own fine care platform.”
WBA is investing $1 million of debt and equity in the partnership over the next three years, including a $250 million equity investment. On completion of this investment, WBA expects its ownership interest of approximately 30% in VillageMD.