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While mobile offers opportunities for all types of retailers, the retail pharmacy category is in a unique position to leverage it to the hilt, Kilcourse says. "It's the classic case study," he says. "Pharmacies have consumer trust, repeat customers, and more information on consumers than other retailers."
To try to keep a step ahead of its competitors, Walgreens is taking a multipronged approach to marketing. Although it had not relied much on search marketing in the past, it launched a year ago a paid search campaign with search marketing firm iProspect that cross-promotes its online and offline offerings.
"We made sweeping changes to our e-commerce site over the last 12 months, so paid search now reflects the new breadth of what we offer–it's about our online pharmacy, our in-store capabilities including photo services, and it's about our expanded range of products and our delivery options," Chawla says.
Walgreens is also paying close attention to how its customers are responding to its changes. Chawla and her team regularly review customer feedback through such means as live chat and social media as well as by using web analytics to understand how shoppers are interacting with the retailer. Within a few months after the new web site design launched last year, for example, Walgreens responded to customer feedback and moved several links from the bottom half of the page to a prominent navigation bar across the top of each page, so that shoppers could easily click to order prescriptions, get information on in-store clinics, use photo services and to return to the home page.
Walgreens is also moving further into text messaging for both customer service and marketing. Walgreens customers have been responding enthusiastically to a service that lets them receive text message alerts when their prescriptions are ready for pickup at a store.
The retailer is planning to continue testing a text-message marketing program that showed early promise in New York City's Time Square. A billboard displayed a code that passersby could text to Walgreens to obtain a discount at the company's store in Times Square. Although still in an early stage, Walgreens expects text messaging integrated with mobile search and display ads to play an important role going forward. "I see us doing much more of that," Chawla says.
Walgreens' multichannel strategy is creating more loyal customers, Chawla says. "We've seen an uptick across all retail channels in visitors and purchases," she says.
There's more to come. And the company credited with introducing malted milkshakes and hot food year-round to its drugstore counters of the past may yet show the way for retail chains to survive in the Internet-enabled multichannel world.