2019 Retail Pacesetters: Walgreens keeps on growing

Domestically, Walgreens operates 9,560 drug stores with a presence in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, along with its omnichannel business, Internationally, parent company Walgreens Boots Alliance operates 18,500 stores in 11 countries, including Boots in the U.K.

In a strategic move to bolster market share and strength, Walgreens turned to acquisitions to fuel growth, purchasing nearly half of the stores run by Rite Aid. According to analysts, Walgreens now is in a much better position to compete against its rivals for consumers’ dollars.

Wanting to be seen as more than just a pharmacy retailer, the company is focusing on value-added services to remain relevant to consumers. Roughly 400 Walgreens stores now offer healthcare clinics, either run directly by the retailer or through a third party.

Looking to empower customers to choose where and when they receive their orders, Deerfield, Ill.-based Walgreens recently began offering next-day prescription delivery service for a nominal $4.99 fee, making it the fastest choice for receiving prescriptions next day. Walgreens Express allows patients to preview their cost, prepay for eligible prescriptions, and choose between home delivery and express pickup in store. For those who prefer to pick up their prescriptions in store, Walgreens has set aside a dedicated checkout line.

The company will be expanding its same-day delivery service into more markets by the end of this year.

At the end of 2018, Walgreens and Kroger announced they would be partnering in an effort to provide a better shopping experience for consumers. Since then, Walgreens has been testing the Kroger Express concept in Northern Kentucky pilot locations. A store-within-a-store concept, Kroger Express brings 2,300 products to Walgreens shoppers in the 13 test stores. The assortment includes natural and organic products, Home Chef meal kits and national brands, along with produce, meat, dairy and frozen offerings. The one-stop shopping experience gives customers access to products from both retailers and enables customers to pick up groceries ordered through at these Walgreens locations.

Additionally, more than 60 Walgreens now sell Home Chef Express meal kits.

Walgreens also is collaborating with online beauty retailer Birchbox to bring prestige beauty brands into 11 Walgreens stores, giving customers an extended assortment offering and interactive experience. Walgreens is dedicating separate space and design elements to this pop-up shop concept within its stores. Skin care, hair and makeup products from more than 40 prestige brands also will be featured. Birchbox-trained Walgreens Beauty Consultants will be available to offer advice and guide the customers through the experience. As part of the partnership, Walgreens also is including the Birchbox shop on its digital platforms.

The addition of Birchbox will help Walgreens tap into the group of underserved customers who may not put their beauty needs first, and get her to increase her spend in the category. According to officials at Birchbox, this consumer group represents 70% of the market.

David Larsen, senior research analyst at SVB Leerink in Boston, said that partnerships like the ones with Kroger and Birchbox give Walgreens a significant number of benefits, including expanded and customized assortments without a massive investment; something that is particularly noteworthy, considering the chain has been under intense pressure to trim unnecessary costs

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