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Walgreens’ “Brick-And-Click” Retail Strategy

Once upon a time, Walgreens’ strategy was to build up physical storefronts on the corner of main streets in an effort to ensure consumers had fewer miles and less time to travel to find a location.

Today, Walgreens’ director of its mobile innovation program Joe Rago said, the drugstore’s strategy is more or less the same, only the retailer aims to reach consumers with the fewest amount of clicks, as opposed to steps.

Rago recently headed a presentation at the Evans Data Developer Relations Conference to discuss Walgreens’ transition from physical storefront to physical storefront plus mobile storefront. It’s a crucial strategy, too, as Walgreens’ mobile customers spend six times as much as their retail-store-only counterparts, Rago said. Consumers that visit the physical store and the online store, without going mobile, still spend 3.5 times as much as physical-only shoppers.

To put it into perspective, Rago said that in 2009, less than 1 percent of consumers connected and interacted with Walgreens through a mobile device. Today, more than 60 percent of all online traffic that leads to Walgreens began with a smartphone.

That’s not to say, however, that Walgreens has abandoned its physical storefront strategy. According to Rago’s presentation, two-thirds of people in the U.S. live within three miles of a Walgreens store. But as the number of shoppers with a smartphone has exponentially increased over the years, so have Walgreens’ efforts to capture that audience.

Walgreens’ app currently holds third place for today’s leading retail mobile apps, Rago’s presentation showed, surpassed only by Amazon and Groupon.

Looking ahead, Rago said that Walgreens will look to further integrate its greatest assets across all digital and mobile platforms to take the most advantage of the digital commerce shift. The strategy is especially helpful for Walgreens customers using the mobile prescription refill and the digital photo printing ordering services.

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