New retail frontiers: OTC panelists cite digital opportunities for Walgreens

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New retail frontiers: OTC panelists cite digital opportunities for Walgreens

By Mark Hamstra - 06/21/2018
Walgreens may be able to drive product sales and improve the customer experience through digital collaboration with manufacturers, according to a panel of OTC executives at the recent Digital Disruption Innovation Summit in Schaumburg, Ill.

While the world of digital commerce is evolving rapidly, and there’s no one silver bullet that answers the question of how to meld the online and offline shopping journeys, it all starts with an understanding of the consumer, said Dan Mack of Mack Elevation, who moderated the panel and presented the Innovation Summit in partnership with Drug Store News.

“The digital and physical worlds have become one. If we’re not thinking of them as one, we are missing it,” he said. “Behaviors have changed. We all need to be thinking about people from a behavioral perspective, like ethnographers. All of us need to be living in the house of our consumers to understand their lives, their hearts and their true intentions, or we don’t really know them.”

Mack asked the panelists to address the opportunities they see for Walgreens in the digital space, and the answers yielded a broad-brush picture of the challenges facing both retailers and suppliers in today’s interconnected world of digital and physical commerce.

Master the basics
Sri Rajagopalan J&JSri Rajagopalan, vice president of e-commerce and digital sales at Johnson & Johnson, said one of the keys to excelling in the current environment involves mastering the basics of e-commerce before tackling such advanced technologies as chatbots and artificial intelligence.

“We can get overambitious and try to build amazing platforms and chase AI and things of that nature, or we can be better at getting the basics right,” he said.

With its vast network of physical locations and its trove of customer data, Walgreens has an opportunity to focus on incremental changes that drive more visits, he said.

Rajagopalan said J&J thinks about digital fundamentals in five basic areas, represented by the acronym SCANR — search, content, available assortment at the right price, navigation, and ratings and reviews.

More than half of CPG product search is taking place on Amazon, he said, and to capture some share of the remaining search opportunities, Walgreens needs to ensure that its site features the right search terms to drive visits through search engine optimization. And once these potential customers land on the site, they need to be presented with content that provides the information they are seeking.

“Is the content from your vendors engaging enough?” Rajagopalan asked. “Is your own content on your own brands engaging enough?”

Of course, the assortment has to be available in terms of the products that meet the consumers’ needs, at the right price and in the right package sizes. Shoppers might want the option of buying a larger pack size if they anticipate an ongoing need for the product, but they won’t appreciate being forced to purchase a large quantity in order to receive a delivery of the item, for example.

Navigation also is key, and should provide a frictionless path to checkout, Rajagopalan said.

“There’s a three-click rule,” he said. “Anything above three clicks to buy simply doesn’t work. What are the three clicks? First click: Launch the app. Second click: Type the search term. Third click: Buy. Anything above and beyond that — good luck.”

Paying close attention to how ratings and reviews come across to shoppers also is important, he said, as is a strategy that leverages other user-generated content, such as influencers on social media.

Need for speed
Gabe Mattingly, vice president of e-commerce at Bayer, said companies need to rethink old processes and accelerate the pace of change within the corporate culture in today’s environment.

“Right now is the slowest pace of change any of us will experience for the rest of our careers,” he said. “It’s only getting faster.”

Companies that embrace that reality become “liberated” to think about the business and the customer in new ways, he said.

“That in and of itself can be a big cultural unlock — to say the processes that we used to undertake yesterday were not the things that led us to success,” Mattingly said. “What led us to success was understanding the consumer and activating in the market.”

At Bayer, Mattingly said the company has been continually trying to speed up processes within the company. A process that once took four months might have a target of two months, for example.

“We’re not trying to wreak havoc within the organization and bypass processes,” he said. “We’re trying to optimize processes, and always finding new half-life so that we can move faster and benchmark ourselves against the market.”

It’s also important to try to understand the customer journey, acknowledging that it is not a linear progression.

“The consumer’s path to purchase is really like a bowl of spaghetti, because they’re undergoing hundreds — maybe thousands — of different paths to purchase or journeys to purchase at one time,” Mattingly said. “Unlocking this space with data and technology can go a long way to understanding your consumer.”

In addition, consumers are going to continue to expect more from the companies they do business with. Just as the pace of change will continue to accelerate, so will the demands and expectations of consumers, he said.

Mattingly cited late actress Carrie Fisher, who once quipped, “Instant gratification takes too long.”

“As good as we’re doing today, we have to get better tomorrow, because [customers] expect it, and they deserve it,” he said.

Carrie Lovegren GSK Consumer HealthcareOnline peer support
Carrie Lovegren, shopper marketing manager for Walgreens at GSK Consumer Healthcare, said Walgreens might have an opportunity to take a leadership position in creating online peer support groups for those dealing with such health issues as smoking cessation and diet.

Walgreens, she said, executes well against two pillars of its mission — trust and access, but the third pillar, care, can be difficult to achieve in the digital space.

“It comes alive really easily in-store,” Lovegren said. “We’ve got the pharmacist, the clinics, we’ve got store personnel walking around with iPads now, having one-on-one dialogues with shoppers. Care in-store is definitely very evident. But how does that one-on-one connection with shoppers come to life digitally and come to life on”

Walgreens does offer such digital services as Pharmacy Chat that are helping to provide that care, she said, but she questioned how many customers take advantage of these opportunities or are even aware of them.

“I think there’s a huge awareness play that could really be there,” she said.

She also noted that sometimes customers don’t want to speak with a medical expert, but would like to talk to other patients who have similar conditions. That’s where the opportunity for peer group digital forums comes in, she said.

"Sometimes to a shopper, the expert is somebody who’s going through the same journey as them, or has been through the same journey,” Lovegren said.

Digital tools at the shelf
Tambra Martin, vice president of marketing of DME at Medline,