A 29 percent drop in revenue brought the heat from analysts and the stock market on Thursday (Oct. 15), as Walgreens Boots Alliance reported results from its most recent quarter. But check the earnings call and the picture looks a bit more optimistic. Earlier in the year, the company said it was embarking on a significant digital transformation. On that front at least, Walgreens is putting its money where its platform is.
Case in point: Walgreens relaunched its online-based Prescription Savings Club, offering lower prices on hundreds of medications. Average weekly enrollment in the club has increased by over 400 percent since the June relaunch, with members saving over $164 million of the cash retail price on their prescriptions. Last week, Walgreens launched the Find Rx Coverage Advisor, providing customers with personalized guidance on health and prescription drug coverage options. Its Find Care platform, which connects to telehealth providers, increased 36 times for the quarter ending Aug. 31 versus last year, reaching over 8.5 million visits.
“I really want that to be clear that we are stepping up our game in terms of what we're going to do to surround the consumer with a massive set of choices on how they want to enter our quarter, whether it'd be physical or online or eCommerce, and it will be a totally omnichannel approach, both pharmacy and retail,” said James Kehoe, executive vice president and global chief financial officer, on the earnings call. “And this will be going on the entire year of 2021, and we will have successive strings of new news over the coming quarters on this.”
Other digital-first metrics were positive, but not as dramatic as other retailers. Sales at Walgreens.com were up 39 percent versus prior year, and digitally initiated sales were up 7 percent in the quarter. Kehoe also said that the recently initiated personalization program boosted retail sales by 140 basis points, up from the 95 basis points impact last quarter. Walgreens also saw a significant increase in customers ordering online and collecting at drive-thrus and curbside, which grew by 2.7 times over 2019.
Also as part of the digital transformation, Walgreens announced a relaunch of its loyalty program, which will now be known as My Walgreens. The new program will simplify how customers accumulate and use rewards, setting up access to 5 percent Walgreens cash for owned brand products and 1 percent in all other qualifying purchases. Walgreens cash can be applied to future transactions or can be used to support causes.
“My Walgreens will be heavily focused on health and well-being with content, service and offers, specifically curated to each member,” noted Kehoe. “All of our 100 million existing loyalty members will have the opportunity to convert their current points balance to Walgreens cash, while seamlessly switching to the new program. As with our personalization programs, My Walgreens will evolve and develop as members use it, and we plan to announce significant developments to the membership in the months ahead.”