E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
The retail chain works to tie its e-commerce technology closer.
Drugstore chain Walgreen Co. is on a mission to revamp its digital infrastructure so that it can centrally manage and easily share data among all its selling channels, including web sites, mobile sites and apps. and in-store point-of-sale systems, says Jason Fei, director of architecture, e-commerce. That will allow Walgreen to better serve its customers, whether they are among the 1.7 million per day who visit one of its web sites (50% of whom arrive via a mobile device), the 6 million who walk into a Walgreens retail store each day or the one per second who refill medicine by scanning their prescriptions’ bar codes with their smartphones, Fei says.
“Because we have so many doors into our properties, we don’t get 10 times more money to support each division,” he told attendees at Oracle Corp.’s Oracle Retail CrossTalk conference in Chicago this week. “We need a one-commerce-anywhere platform,” he said, that is, one platform that will allow Walgreen to build a feature once and push it out to any digital channel, be it a mobile app, a web site or an in-store digital sign.
Oracle’s ATG Web Commerce platform has that capability, Fei says, and the retailer is working to use it as the base for all of its digital applications. That would represent a shift from the situation today, he says, as Walgreen now uses three separate groups of technology applications—each with a separate development team, business leadership and base of software code. That’s because the retailer has been acquiring competitors, such as web-only retailer Drugstore.com, each with its own e-commerce technologies. The retailer isn’t done making acquisitions—even now, it’s in the process of buying a European company that is running on IBM’s WebSphere Commerce platform, he says.
Walgreen is No. 36 in the 2013 Internet Retailer Top 500 Guide.
A centrally managed platform on Oracle ATG will be able to push individual software modules, such as ones for customer reviews, fraud management or payment processing, out to any digital channel, Fei says. That would free Walgreen’s developers from having to rebuild each feature for every new digital site or app it creates.
Walgreen will have to overhaul its own home-grown technology infrastructure, too, in order to achieve build-once, deploy-anywhere capabilities, Fei says. For 15 years, the retail chain has taken a “web-centric” approach to e-commerce, he says, wherein “everything other than browsers are afterthoughts.” That includes features of any mobile web sites, apps or web-connected store systems like a sales register that pulls in customer loyalty data. Until recently Walgreens built them all as ad hoc extensions after Walgreen had first designed a web site version, he says.
The core of Walgreen’s strategy is to use digital channels to drive customers into stores, Fei says. Walgreen has 10 mobile apps and mobile sites, he says, in addition to many e-commerce sites, including Walgreens.com, DuaneReade.com, Drugstore.com and Beauty.com. 35% of customers that use the Walgreen mobile app use it while they’re in stores to check the status of prescription orders, read about products and reviews, browse the store’s inventory or look up where a product is on the shelf, he says. “Every time we build a project now, it must be mobile-first,” he says.
All of Walgreen’s web sites must be built with responsive web design techniques to accommodate that need, too, Fei says. Responsive design allows a web site to detect the screen size of the device a consumer is using to browse. Then the site automatically adjusts the display to load and arrange content on each web page appropriately, for instance, arranging products in a vertical list on a smartphone but in a horizontal array on a laptop. Ultimately, a module-based, unified digital platform will allow Walgreen to build features that trump other retailers on convenience and usability, Fei says. “We’re not just in this to compete, we’re in this to win,” he says.