Walgreens' mobile program connects with Boomers and millennials alike



Walgreens (NASDAQ:WBA) has catapulted itself from its reputation as a staid drugstore chain with a down-home image to being the world's second-largest retailer. And now it has a digital presence worthy of the ranking, partly because its app is the third-most popular retail app to date.

Consultants and vendors pay homage to the fact that Walgreens' former CEO Greg Wasson led the charge and pushed the company toward this goal.

What was once Walgreen's "e-commerce" division is now "digital and marketing," and the team continues to look for new features that will leverage mobile's ability to drive in-store sales, according to Joe Rago, Walgreens' director of digital and marketing. "There's an element of constantly looking," Rago told FierceMobileRetail.

Walgreens' initial push into mobile revolved around pharmacy, a logical area of focus for the drugstore chain. And what was previously a web-centric program translated quickly to mobile, giving customers the ability to manage prescriptions, get refills and even receive notifications when their orders are ready.

There is one mobile prescription placed every second and more than half of online refill requests come from the app, according to the Cadient Group, a digital marketing agency focused solely on healthcare.

It then progressed to offering discounts and offers such as paperless coupons. Shoppers can now clip items from Walgreens' weekly ad and save offers to their Balance Rewards card.

The rewards program is another recent addition to Walgreens and one area in which the retailer lagged behind its biggest competitor, CVS/pharmacy. The newly developed program is, of course, integrated into mobile.

There is currentlly an iBeacon pilot in 10 Walgreens-owned Duane Reade stores. "We continue to learn from that and are evaluating that pilot," Rago said. "There are challenges around how to roll that out to the chain."

"So far, Walgreens is the first pharmacy chain to adopt the Apple iBeacon, and it's just a pilot program right now, but it's very promising for what it can do for customers, for the pharmacy, and for brands themselves," said Chris Mycek, chief customer officer at the Cadient Group. "It's a win-win-win all the way around when you use something like that in iBeacon."

Beacons could also help the chain make more loyal shoppers out of a traditionally non-core demographic: millennials.

Walgreens shoppers tend to skew older—as we age, our heathcare needs grow. Besting the competition in terms of mobile programs is one way Walgreens can grow sales with this younger and healthier mobile-savvy demographic, and build loyalty that will pay off when these shoppers age.

"Millennials are very open to sharing data, more than anyone over 34 [years old]," said Chris Mycek, chief customer officer at the Cadient Group. "For them, DR and Walgreens will become their preferred place for pharmacy."

"Mobile gives a pharmacy chain the ability to optimize and increase average order size, and increase the loyalty base with the 'young invisibles,' as the Affordable Care Act referred to them," Mycek said. Acting now to establish the group's loyalty with a better shopping experience—one more suited to millennial mobile use and dependency—can carry a retailer into their prime selling years.

It also places Walgreens not just at the corner of happy and healthy, as its marketing message states, but at the crossroads of a changing health care system where in-store clinics are proliferating and insurers are steering patients to more cost-effective, convienent locations.

Walgreens is even experimenting with virtual office visits through its app.

Behind the scenes, there are questions surrounding Walgreens' new CEO's level of commitment to digital investment. As an international retailer, Walgreens Boots Alliance operates more than 11,000 stores in 25 countries and more than 8,200 stores in the United States. A retailer of that size will often turn its attention to trimming costs and consolidating business units.

That would be a mistake, given that Walgreens has already beaten the odds for larger retailers that often lag in nimble upstarts when it comes to adopting new technology, according to a recent study by the Apigee Institute. In a survey of 1,000 smartphone users in the United States and the U.K., when compared to companies such as Amazon, Facebook and Google—businesses that were founded in the digital age—large retailers are behind when it comes to meeting shoppers' digital expectations.

"I would challenge retailers to think about the horizon,"said Bryan Kirschner of the Apigee Institute. "It is challenging for companies in any industry to think digitally. But why would you turn your back on it [when] somebody [else] in your industry is not going to turn their back?"

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