Walgreens Invests Big in Personalization
Brought to you by WBR Insights
Personalization is a big deal in retail — perhaps more so than in any other industry. Customers today expect to be treated like an individual rather than a random face in the crowd and will seek out brands that can fulfill this need.
Of course, much of this pressure comes from Amazon, which has been using the vast quantities of data it generates to personalize content for its customers for years — offering them product recommendations that are more likely to result in a purchase. Customers have repeatedly gone on record stating that they are more likely to remain loyal to a brand that offers them a personalized experience. They’ve also indicated that they’re more likely to spend more and that they place personalized experiences above price and product.
As the second-largest pharmacy store chain in the United States, Walgreens wanted to go big on digital experiences to capture the benefits of personalization — a project which began with significant investment.
In 2019, Walgreens knew that it had to shake things up if it wanted to remain relevant in an increasingly digital world. Walgreens believes that its future lies in using digital technology and ecommerce strategies to transform from a traditional brick and mortar drugstore into a virtual healthcare mall.
Of course, this kind of transformation requires investment, and Walgreens is not being timid about putting its money where its mouth is in this regard either. The pharmacy brand recently announced plans to give its digital and ecommerce arms a significant cash injection in its latest budget.
“We have the right investments, $300 million a year, which — it adds up to one billion dollars of investments behind partnerships and digital,” said Walgreens Chief Financial Services Officer, James Kehoe. “We’re investing to make sure especially that the US business has the ammunition required to create that omnichannel experience in both pharmacy and in retail. This builds on our existing highly successful customer-facing platforms, including our 55 million downloaded apps and our 85 million active Balance Rewards members.”
A large portion of this investment is creating a partnership with Microsoft Azure through which Walgreens wants to design new digital health corners, where customers can access a range of advice and content regarding their personal health needs, beginning with a twelve store pilot project in late 2019.
Walgreens has also been inspired to invest in personalization after inspiration hit its Group Vice President of Beauty and Personal Care, Lauren Brindley while on vacation in Mexico.
Upon arriving, she and her family were collected from the airport and transported to their hotel. When they arrived, the check-in had been completed automatically and digitally and the resort had provided some snacks and refreshments for them to enjoy after their long journey. However, because of the data which she had provided, the snacks were devoid of nuts — which Brindley is allergic to — and she also received personalized restaurant recommendations to help her navigate the local dining scene.
“As soon as I had identified myself as Mrs. Brindley on that first connection point, each member of the resort used an earpiece to communicate with each other along my customer journey,” said Brindley. “They’d tell each other, ‘Lauren is on her way.’ They were waiting, they were ready, and they exceeded my expectations at every single point in time.”
The world of beauty and cosmetics is especially ripe for personalization, as finding products that match individual skin tone and type is a big part of the shopping experience already. To help customers have better experiences in this regard, Walgreens has incorporated Johnson & Johnson’s digital SkinID technology. The tech builds a personalized skincare regime for customers based on factors such as skin type — oily, smooth, etc. — complete with appropriate product recommendations.
“It’s been built by scientists,” added Brindley. “We ask you some questions. You can either answer on your own at home through your digital devices or hopefully in a store w a beauty consultant. Then we’ll scientifically recommend the right acne products based on what we believe your skin needs.”
The way people learn about beauty products has changed dramatically, with the traditional counter-based demo person now largely replaced with YouTube content creators. However, because of beauty and cosmetic’s inherently personal nature, most customers still want to try products out in person. Technology such as SkinID supplements this need and increases the chances of customers finding the right products the first time.
Personalization is going to continue to be incredibly important as we move through 2020 and customers are going to expect these kinds of experiences from all the brands they do business with. With innovations such as SkinID and significant investment in digital services, Walgreens is already well along that road.
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