Cooler Screens, a company that sells digital advertising space on refrigerator door screens, is reportedly involved in a legal dispute with Walgreens.
The dispute arose after Walgreens installed Cooler Screens’ technology, which replaces traditional cooler doors with digital screens that play targeted ads, The Wall Street Journal (WSJ) reported Monday (Oct. 2). Cooler Screens is now suing Walgreens, claiming the pharmacy chain obstructed a nationwide rollout of the technology and demanded its removal from stores.
Reached for comment by PYMNTS, Cooler Screens said in an emailed statement: “Walgreens is trying to deflect attention from its poor retail performance by falsely blaming others for its problems and poor stock performance.”
In a statement emailed to PYMNTS, Walgreens said: “We always strive to provide the best possible customer experience, and we terminated our contract with Cooler Screens earlier this year due to their failure to meet contractual obligations. We look forward to the court deciding our claims.”
Walgreens initially tested the “smart” cooler screens in 2018 to generate ad revenue from the shopping behavior data it collects from customers, according to the WSJ report. The screens, which embed sensors and digital screens into cooler doors, were designed to play targeted ads to shoppers as they walked past.
However, Walgreens said in court documents that technical issues plagued the technology, making it difficult for customers to see what was available inside the coolers, the report said. The screens froze or went dark, showed incorrect products or prices, and even sparked and caught fire in some instances.
Walgreens claimed these issues occurred because Cooler Screens failed to maintain its technology and was unresponsive in fixing problems, per the report.
Cooler Screens, on the other hand, blamed what it called Walgreens’ aging and poorly maintained electrical and refrigeration infrastructure for the technical difficulties, according to the report. The company also alleged that Walgreens did not provide all the promised customer data or accurate stock data, which affected the effectiveness of the targeted ads.
In its statement provided to PYMNTS, Cooler Screens said: “The facts are reviews by Underwriter Laboratories and Dover, the largest manufacturer of refrigeration equipment, unequivocally showed that it was Walgreens’ outdated and poorly maintained electrical system that was responsible for the failure of the doors in those stores that had failures.”
The statement added that independent surveys showed that more than 90% of consumers preferred Cooler Screens doors to traditional doors and that tests by Walgreens and other retailers demonstrated that advertisers like the medium.
Cooler Screens also argued that delays in rolling out the technology made it challenging to sell advertising space to media buyers who preferred larger-scale advertising, WSJ reported.
Despite the legal dispute, Cooler Screens stated it has not removed its technology from Walgreens stores and continues to operate a nationwide network of nearly 11,000 screens, per the report. The company is backed by Microsoft, and its co-founder is Gregory Wasson, a former CEO of Walgreens.
Cooler Screens was founded to develop and distribute digital doors that display relevant information and offers to consumers when they stop to look at them in the frozen foods aisle, Cooler Screens CEO and founder Arsen Avakian told PYMNTS in an interview posted in 2019.
“The foundational core of the idea was to bring the consumer experience in-store into line with something better and more akin to the online shopping experience by making it easy for them to make better buying decisions, better budgeting decisions or just have a better path to the relevant information they want,” Avakian said at the time.
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