The growth of Walgreens as a brand is especially impressive given the fierce competition it faces from other drugstore chains like CVS, its closest competitor, and Rite Aid, not to mention such retail powerhouses as Walmart and Target who run significant pharmacy operations.
How has the chain managed to thrive, despite tough economic conditions? Two of its mainstays are access and innovation.
Nearly 75 percent of Americans live within five miles of a Walgreens store. In addition to its physical proximity, Walgreens makes sure customers have easy access to services once they are in a store. The chain recently launched a “Customer Centric Retailing” (CCR) initiative designed to offer new product assortments, improved sightlines and signage, and more convenience in shopping. For example, mothers can find baby food, diapers, infant medications, and other baby essentials all in the same aisle. Some 1,500 stores have already been given the CCR treatment.
Walgreens puts an emphasis on in-store access to health services. It has the largest retail network of pharmacists certified to provide immunizations. The chain offers in-store “Take Care Clinics,” employer worksite health centers, hospital pharmacy services, and home infusion services. The company sponsors national programs for the American Cancer Society, American Heart Association, and Juvenile Diabetes Research Foundation. Walgreens partners with AARP to provide members with special discounts.
To dramatically increase its access to new customers, Walgreens has made several strategic acquisitions. Last year, for example, the company acquired Duane Reade, a 258-store chain heavily entrenched in the New York City area. This year, Walgreens acquired drugstore.com, gaining access to some 3 million online customers and around 60,000 more online products. Drugstore.com operates numerous other health-related websites, including AllergySuperstore.com, Beauty.com, SkinStore.com, and VisionDirect.com.
As for innovation, that’s second nature to Walgreens. After all, the company was founded in Chicago by Charles Walgreen, who bought a single pharmacy in 1901. There were already more than 1,500 pharmacies competing for business in Chicago. The store Walgreen acquired was poorly lit, poorly merchandised, and poor on service, but it was in a great location on Chicago’s South Side. Walgreen performed a miracle makeover, brightening the place, widening the aisles, adding products, and personally welcoming customers. His store flourished In the 1920s, Walgreens became known as the first drug store to serve up an American classic, the malted milkshake. By 1929, there were 525 Walgreens stores located in major U.S. markets.
Today, Walgreens’ brand of innovation continues to focus on customers’ needs. The company has benefited from aggressively marketing its own private label brand at a time when customers are seeking out value. In July, Walgreens announced that it plans to become the nation’s largest host of electric vehicle charging stations, opening about 800 locations across the country by the end of the year. Also in July, Walgreens said it would open or convert at least 1,000 “food oasis” stores across the country over the next five years, in conjunction with efforts by First Lady Michelle Obama and the Partnership for a Healthier America. These stores will be strategically located in “food deserts,” areas without sufficient access to healthy food, to help children and adults who face a significantly higher risk of suffering from obesity, diabetes and cancer.
Walgreens is an innovator on the social media front as well. The company recently surpassed one million fans on Facebook and has become the chain drugstore retailer with the largest following on Foursquare. The company now offers a smartphone application that allows consumers to scan a prescription label and place an automated order so it can be picked up at the nearest Walgreens pharmacy.
It may be over one hundred years old, but Walgreens’ healthy outlook demonstrates this is one company that knows how to keep up with modern times.