Walgreens' Joe Rago talks building an app for 8,000 stores

When Joe Rago joined Walgreens (NASDAQ:WBA) as mobile product manager in 2011, the drugstore chain had launched its first app six months prior. M-commerce and mobile marketing were fairly new for the retailer.

Today, Rago is director of digital marketing for Walgreens' Mobile Innovation program and its 8,200 Walgreens and Duane Reade locations. With the company's 2014 Alliance Boots merger, Walgreens is the second largest retailer in the world after Walmart. Now it's working on creating a mobile presence worthy of that ranking.

FierceMobileRetail: Walgreens didn't have a loyalty program and didn't have an app until relatively recently, what were your early priorities here in developing one?

Joe Rago: A lot of it is around the context of going where our customers are going, whether it be migrating to the native app with our iPhone and Android app or expanding that into different native app platforms. As the customer goes, we go. We are keeping an eye on where the customers are going and where we'd be able to give them the experience they want to have with Walgreens whenever, wherever, and however they want to be interacting with us.

FierceMobileRetail: In terms of where your customers want you to be versus where you think you should be, what did you learn there?

Joe Rago: There's an element of constantly looking at what's happening [with] technology. But there's also some element of making sure that things are somewhat stable. You want to be able to move fast, but you [don't] want to move too prematurely. You can see some parallels with how Apple handles certain technologies, where they're kind of waiting for things to be in a pretty good adoption or potential adoption rate to then offer it up to the masses.

You want to be able to keep that balance between getting out there early, but not being too early. Then it's [about] utilizing those technologies to best assist the Walgreens customer when they want a certain interaction or function with our brand.

FierceMobileRetail: Is pharmacy the top use for your app?

Joe Rago: Definitely. There are strong parallels between [app use] and the store, between our pharmacy business and app use. The first truly unique mobile app feature that we did was Refill by Scan, which launched in late 2010. That was really one of the first features that took a reimagined view of doing a prescription refill. Prior to that, it was calling in the prescription to the pharmacy, going in physically and saying 'I need a refill.' Using our website or mobile Web to login to an account to request a refill and the ability to scan the bar code on a Walgreens prescription bottle or box label, get it submitted and processed for a refill request took seconds versus minutes. This was definitely one of the features that really helped drive the early days of our native application strategy.

We took similar approaches with photo and the feature that launched in the Walgreens app in Winter/Spring of 2012. We looked at a previous interaction point, like printing a photo, just like we did with refilling a prescription. How do you get that interaction down to the minimum amount of steps and make it as fast and efficient a process as possible? We've seen great success with that photo feature.

QuickPrints was a feature in our own app. That was built from the ground up to [make it available] to third party mobile developers. There are tens of thousands of photo applications in the U.S. market, and our idea was to tie-in with the applications that either existing Walgreens or non-Walgreens customers might be using, and give to them an opportunity to print photos to Walgreens from those other third party applications. That was one of the first external-facing programs that leveraged some of our own app's initiatives, as well.

FierceMobileRetail: And what are you doing to help grow front of the store sales and interactivity with the consumer in those departments?

Joe Rago: That's the most recent expansion of focus within our own application. We had a very well-timed launch with our Balanced Rewards loyalty program in September of 2012. It was very well choreographed between all facets of the rollout. It was also well-timed with when Apple launched Passbook in iOS 6.

That's not a direct tie-in with the in-store shopping experience, but kind of our first foray into how customers would be using the app in the store.

In the last year, it's been more around our in-store mode features. So, if you have the option enabled in the Walgreens or Duane Reade application and you go into one of our stores, or get proximity close to one of our stores, there will be a different in-store shopping experience that will highlight the key features of the app you would want to use while in the store. We have your balanced rewards bar code at the top of the screen, we have in-store-centric functions like product locator and maps, and we're going to  continue to evolve the in-store experience of our app, in addition to the out of store.

If you look at the Walgreens mobile journey, it started with how we interact with Walgreens customers when they're outside of the store; when they're at home or at work. With a lot of the in-store mode-centric features, it's how we really interact with them while they're in the store. And then, with our third-party developer program, it's how we interact with Walgreens' customers or potential Walgreens' customers who are not even in our own application, but are in other applications. That's the journey I've seen us go down in the last three years or so.

FierceMobileRetail: Now, the features you mentioned, the in-store interactivity, where is that in its development?

Joe Rago: That's been live for about a year. It continues to evolve as a feature set. As we roll out new features and functionalities that have an in-store component, we will continue to evolve that in-store mode experience.

One of the key programs is our paperless coupons initiative. Shoppers can clip an offer or coupon to their Balanced Rewards card from either the website, the native app, or the mobile website. Then they simply scan their balanced rewards card, and any products in their basket that they have applicable coupons for, and that discount would be deducted.

That's a central part of the in-store mode. It shows up like a coupon ticker, [and serves as a] reminder to pick up that product while the coupon's still valid.

FierceMobileRetail: Walgreens has been testing beacons at Duane Reade stores. Will you be leveraging any learnings from that test to more stores?
Joe Rago: We're still evaluating that pilot program. One of the difficulties with any large retailer is making sure that you're learning from your pilots and continue to expand those. It's a lot easier to test something out in the 10 stores than 8,000 plus.

We also have to consider a lot of the [other] technologies. We have a great user base with iOS and Android apps, so it's [about] technology to complement both of those user populations. The iBeacon is an Apple-centric term, but the concept of beacons is across the platforms, so how do you find something that could cater to both those growing audiences?

FierceMobileRetail: Are you seeing any generational difference in terms of reaching your shoppers via an app versus a website or mobile Web?

Joe Rago: Anecdotally, we see a pretty good distribution in who's using our applications. We see a high percentage of folks older on the age chain that are using the Walgreens mobile app and using the most recent version with Balanced Rewards or the prescription components. On the flip side, we see younger users being drawn to some of the photo-centric features around printing photos.

We're seeing continued growth across all areas of the app as the U.S. population of potential smartphone users continues to grow. We're continuing to try and work close with our peers across both the digital marketing division as well as in-stores to drive the value of the Walgreens mobile app. [We'll] continue trying to leverage both our digital footprint as well as our in-store footprint, because with any large brick and mortar retailer, you can't underestimate the value of that physical footprint. As much as digital continues to grow, both Web and mobile, that in-store traffic, in-store interaction is still paramount to everything we're going to try and do.