The pandemic has not only tested Walgreens' operating model and stock levels – it’s also forced the brand to rethink its e-commerce and marketing strategy. Its chief marketing officer reveals why Covid-19 has been a “wake-up” call for the business.
Walgreens is the biggest pharmacy chain in the US. As well as dispensing prescriptions and medicines, it sells everything from teeth whitening strips to Doritos, hair scrunchies to batteries.
As Covid-19 gripped the US in early March, customers flocked to stock up on hand sanitizer, face masks, pain relief and toilet roll among other products. The chief financial officer of its parent firm, Walgreen Boots Alliance, told investors that this panic buying had initially spurred a “feeling of euphoria across the business”. In the first three weeks of March, in-store sales surged 26%.
However, as social distancing took hold the footfall came to a sudden stop and retail sales sank nearly 11% on the previous year. The business quickly realized that customers' expectations were about to change, and so too would its digital strategy.
“We saw a huge increase in our e-commerce business,” explains Patrick McLean, senior vice-president and chief marketing officer at Walgreens, during an interview recorded as part of The Drum’s virtual Can-Do Festival.
“It’s funny because we already had all of these pipeline projects around curbside pick-up and online ordering and we had to quickly turn those pilots into a national rollout. The pandemic has really accelerated some of the things we were already starting to do.”
Such pipeline projects included rolling out free delivery on all purchases from Walgreens online, letting shoppers in 14 cities across the US access a variety of health and wellness and other convenience products via Postmates' on-demand contactless delivery service. It also launched an ‘order ahead’ digital drive-thru experience and several Covid-19 testing locations in 49 US states.
To help power this shift, Walgreens created a crisis management operations team which placed marketing at the center. This group met twice daily to discuss the key focus for the day, then McLean’s team communicated this quickly with its advertising agency roster – which (for now) is spearheaded by WPP’s Grey.
One outcome of this was that the brand also quickly moved to mobilize its social media and digital teams to inform and educate consumers.
“We were getting a lot of questions in-store and on social media – everything from ‘should I be wearing a mask in public’ to ‘what else could I be doing to look after my kids?’ – so we cataloged the questions we were getting and we started to create content in real-time,” says McLean.
The result was a series called ‘Ask a Pharmacist’ which featured real pharmacists responding to these questions.
“It was a really quick and agile way to get our message across,” continues McLean, pointing out that this content dovetailed with a partnership the advertiser had with Sesame Street to help explain coronavirus to children.
He adds: “This was all in done in real-time, with a quick turnaround and alongside partners. “It’s changed [our] marketing for good in a lot of ways.
'A wake-up call'
Though the pandemic has been a steep learning curve for Walgreens and put a dent in its retail sales for the year, McLean is clear that the experience has been a “wake-up call” for the business.
“If we’re being honest with ourselves, Walgreens' strength has always been its retail distribution network, the retail presence we have in communities, and we’ve been behind in digital channels and e-commerce. We always knew more investment needed to go in but our timelines have now rapidly accelerated.”
From here on, he promises “a lot of aggressive investments” in online shopping and omni-channel experiences, whether that’s delivery, drive-thru collection or third-party partnerships like the one with Postmates.
“Our retail network is always going to be a huge component of our strength… but expectations have changed,” he says. “You’re going to see aggressive investments in those omni-channel and digital solutions from us moving forward.”
In the past few days, the brand has demonstrated its commitment to this with the appointment of Adobe and Microsoft to create personalized experiences for the 100 million members in its loyalty programs in the US and at sister UK store Boots.
The new personalization platform will offer individually tailored prescription experiences to patients at Walgreens. Boots, meanwhile, will launch a bespoke beauty experience for customers by enabling Boots Beauty Consultants to provide custom product recommendations.
McLean, who joined Walgreens at the end of 2019, says this newfound digital flex will also be the focus of the brand’s marketing efforts moving forward too as it starts to tell a story of “broader convenience”.
McLean spoke with executive editor Stephen Lepitak as part of The Drum’s Can-Do Festival, an online event celebrating the positive energy, innovation and creative thinking that can make the marketing community such a powerful force for good. You can watch the interview in full here.
Sign up to watch forthcoming sessions and see the full Can-Do schedule here