June 16, 2011, 1:12 PM

IRCE 2011 Report: Walgreens wins over multichannel shoppers

Walgreen gets 25% of online prescription orders from mobile devices, IRCE speaker says.

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Walgreens customers who shop across the retail chain’s multiple channels, including mobile, web and stores, are three times more valuable than those who shop in only one channel, Walgreen Co. president of e-commerce Sona Chawla said today in a keynote address at the Internet Retailer Conference & Exhibition 2011 in San Diego.

Chawla, who was named president of e-commerce at the retail chain earlier this year, said the company’s many efforts to let customers shop as they please—including the ability to purchase products, reorder a prescription within 30 seconds through a scanning feature on mobile phones, check local store inventory on mobile devices, view digital advertising circulars and communicate with pharmacists through live chat on Walgreens.com—were showing remarkable results in developing strong multichannel relationships with customers.

Walgreens surveys have found, for example, that 50% of the 1 million daily visitors to one of the retailer’s e-commerce sites say their next shopping action would be to go to a Walgreens store and that 82% of customers who have communicated with pharmacists via live chat say they are likely to refill their prescriptions again with Walgreens. “We’re excited because this is a way to really gain customer share of wallet and keep customers with Walgreens,” Chawla said.

The retailer isn’t slowing down with its ongoing drive to engage shoppers, she added. To provide still another option to refill prescriptions, Walgreens is launching a pilot that will give consumers the option to refill a prescription by responding to a text alert that a refill is due. More than 2 million customers, meanwhile, already subscribe to Walgreens text alerts and the number of subscribers is growing rapidly, Chawla said.

Walgreens has a mobile commerce site and has developed mobile apps for several mobile devices, including the iPhone, iPad, BlackBerry, and devices that run on the Android and Windows Phone 7 operating systems. Walgreens shoppers can use the devices to check local store inventory—Walgreens operates more than 7,700 stores in the U.S.—as well as order online for either home delivery or in-store pickup. Shoppers can pick up online orders from stores in many cases within an hour, Chawla said.

Walgreens also plans to open later this year a new distribution center designed to work with automated robots from Kiva Systems Inc. The robotic system, which is designed to make warehouses operate faster and more efficiently, will support Walgreens’ plan to ship on the same day any online orders received by 6 p.m.

Developing a multichannel strategy has been helped by strong involvement from Walgreens’ 250,000 U.S. employees, Chawla said. “It’s exciting to see how they are embracing these new technologies,” she said. For example, the company receives frequent e-mails from district and store managers on ways to better engage shoppers in the local community level. Individual stores have run “technology days” to educate shoppers on the several ways they can shop and communicate with Walgreens, including mobile and live chat, for example, and others have worked on Twitter and Facebook campaigns at the local store level.

While building its multichannel strategy, Walgreens is also expanding its online presence. With its recent acquisition of Drugstore.com, for example, it now has five e-commerce sites that offer beauty and wellness products such as cosmetics and spa products: Walgreens.com for a general range of products; Drugstore.com for hard-to-find items; Beauty.com for items under a “prestige” category; SkinStore.com for more scientific cosmetics designed to treat skin problems; and Spalook.com for spa and well-being products. “We’re deepening our product assortment online,” Chawla said. “42% are exclusive to the web.”

“We’re leveraging all channels to serve our customers,” Chawla said. “Our best customers refer to us as My Walgreens. And we want to be ‘My Walgreens’ to everyone in America.”

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