Walgreens launches pilot program in Gainesville, Fla. stores
Walgreens is launching a new pilot program that will lower SKU counts per store by at least 20%, as well as lower everyday pricing and offer new services. The format is being tested in 17 locations in the Gainesville, Fla. area.
In an interview with DSN, Alex Gourlay, co-COO of Walgreens Boots Alliance and president of Walgreens, said the Deerfield, Ill.-based retailer is simplifying the shopping experience with a more concise layout that holds significantly fewer SKUs. “People give drug stores roughly seven minutes [of their time],” Gourlay said. “If you can give them two minutes back, they’re really happy. And in the modern world, more people will order in advance. We’re trying to redefine modern convenience.”
Over the next 12 to 18 months, Walgreens plans to gauge customer reaction at the pilot stores and adjust quickly based on feedback, then roll out new ideas to other stores in the future.
In conjunction with an easier-to-shop physical space, Walgreens is investing significantly in digital in an effort to deliver on the promise of an endless aisle to discerning shoppers. Moving forward, Walgreens has committed more than $500 million toward supply chain systems to create more efficiencies and help address “the last mile” delivery to customers. Another piece of that strategy is Walgreens partnership with FedEx, which is being extended in Gainesville with the addition of an expanded selection of packing and shipping materials.
In addition to physical space changes, the Gainesville stores feature a subscription offering, called Walgreens Plus, where customers can pay an annual $20 fee in exchange for a 20% discount across almost all products in the store, including products on sale, a 60% discount on cash-paid generic prescription prices and the option of free, same-day prescription delivery through Walgreens.com.
There’s even a philanthropic element that is designed to appeal to millennial shoppers. A portion of every Walgreens Plus enrollment fee will be donated to help provide clean water to a family in need around the world through Walgreens existing charitable partnership with ME to WE’s Give H2OPE to Others program.
“We’re really fast-forwarding [our retail thinking by] three to four years,” added Gourlay. In addition to the unique shopping proposition represented by Walgreens Plus, the new pilots feature a number of initiatives to improve the consumer experience.
“We asked consumers about our brand and what we found out was that they love our brand, but sometimes found it hard to shop,” he added. “We’re redefining value in the marketplace. We want to make it a more simple experience for consumers and for our team members to spend more time helping our shoppers.”
The changing consumer landscape seem to be playing a role in this move, as both traditional brick-and-mortar retailers and online sites adjust to today’s consumer. Research shows consumers perceive pricing in the drug channel to be too high and the aisles too hard to shop. In an effort to counter these perceptions, Walgreens is lowering the retail cost across more than 5,000 items in the store.
“We are working hard to use insights to make sure that we have the products on the shelves that people want,” Gourlay added. “This is clearly an opportunity for manufacturers who offer great value and great products.”
There will be other reasons to walk through the doors in these pilot locations, Gourlay noted. In eight of the pilot stores, customers will be able to purchase mobile phones and plans from a trained Sprint representative. But it’s more than just offering mobile phones in a retail pharmacy. “Where our relationship with FedEx is about improving the physical last mile, our relationship with Sprint over time will be about improving the digital last mile,” he said.