Walgreens' Stefanie Kruse: Bringing Digital and Physical Together at Retail  5/18/2020

We've all seen how the pandemic has driven many shoppers to digital solutions, whether e-commerce for shopping, telemedicine for pharmacist consultations, or that hybrid of order online and pick up at the store.

In this podcast, I speak with Stefanie Kruse, who as the VP of Digital Commerce & Omnichannel for Walgreens, is right in the center of all of this. While she was already working on a ton of digital innovations for the drug chain, Covid-19 has greatly accelerated many of them.

During this interview you'll learn about some of these initiatives, as well as how digital will play an increasing role in the retailer's future -- both online as well as in the store. 

Listen to the podcast (view the video below)


ECRM: Good afternoon, everyone. This is Wayne Bennett with ECRM, and I'm very excited to have with me today, Stefanie Kruse, who is the VP of Digital Innovation and Commerce at Walgreens. Today, we're going to talk with Stefanie who leads up the digital commerce initiatives. Tell me a little bit about your role and what you're responsible for at Walgreens.

Kruse: Thanks so much for having me today. As you mentioned, I lead digital commerce at Walgreens. So that includes overseeing the e-commerce PNL for our retail business. Everything that our customers buy online and then ship to home or ship to store, but it also includes initiatives that span digital and physical and really thinking about how we bring those two worlds together. My team partners really closely with the merchants to think through how do we bring together programs in store, online, and really make those come to life digitally for our customers online, and then vice versa, how do we augment our physical experience in store with digital tools?

ECRM: Very good. In addition to that,  Walgreens.com has a lot going on.  There's the work you are doing with Postmates there's telehealth, there's Find Care Now. So can you give us a sense of what the priorities are and what you guys have been able to accomplish in really a very short period of time?

Kruse: It's actually been really incredible how much we've been able to accomplish just over the past month and a half since this pandemic onset. On the retail side of the house, we realized very quickly that we would need to be able to meet customers on their own terms and offer them safer, easier ways to shop with us, and we rolled out several new digital solutions to help meet that. First and foremost, we had already been working with Postmates in New York for about six months, and we in early March had already had plans to actually extend that partnership into a larger partnership, working across 14 markets with Postmates. Actually a week after we announced that and decided that we needed to expand that partnership nationally.

We went into those 14 markets, and then a couple of weeks later partnered with Postmates to actually get Postmates live across over 7,000 stores in our chain so that we could truly have a national presence with them. And that really allows our customers to have new ways to shop with us. Postmates is doing contactless delivery, and so it's very safe for our customers and really allows them to get things in much more convenient, seamless ways. And it's a curated assortment, so it makes the shopping experience really easy as well. We also rolled out a buy online, pick up and drive through solution as well over the past month. We have the advantage of having over 7,300 drive through locations.

It's one of our largest assets at Walgreens and really differentiates us from several other retailers. We quickly realized that we could leverage our drive through to be able to allow customers to shop with us without having to get out of their car or interact with someone physically. Initially, we made it available for customers to just drive up and tell the individual, the pharmacy tech usually, working at the drive through what they wanted. We then rolled out a digital solution behind that over the course of roughly two and a half, three weeks. And then piloted that in the store, got some learnings, and then actually rolled it out nationally.

We are now live across all of our drive through locations with an order ahead and pick up at the drive through at Walgreens. We've also been supporting our digital sales through expanded fulfillment capabilities online as well. We've nearly tripled the capacity of our e-commerce distribution capabilities, which is allowing us to meet significantly higher demand online. And then we also have several initiatives on the health side of the house. We've had a really amazing digital asset called Find Care that has seen significant traction and growth over the past year or so, and we've doubled the number of telehealth providers that we have within that. We've added a COVID assessment tool. It's powered by Microsoft.

We've also given customers the ability to find COVID clinical trials within that Find Care tool. And then we continue to have pharmacy chat and free one to two day pharmacy delivery to your home. And then finally, we also are taking our CSR initiatives digital as well. Red Nose Day is now a totally digital event. You unlock your red notes digitally, and we do have Zoom backgrounds as well.

ECRM: What I find to be really of most interest is how have you guys been able to move so quickly? I think there's a little bit of a perception out there that Walgreens doesn't move so quickly. But in this case, you guys have really moved very quickly in your e-commerce initiatives. How has that been able to happen?

Kruse: I think it's impressive for any retailer, much less a retailer of our size, but I'd say it comes down to a couple of things. One is really, really clear priorities among our entire team. And by team, I mean, not just my team, but all of our cross functional teams and our leadership as well, with a really clear deliberate focus on our customer and patient. Also, much more agile ways of working. We're working very differently through this pandemic and are continuing those ways of working as well to, again, be really clear and focused on priorities, working in agile ways, getting things out there, getting learnings quickly, and then pivoting with improvements.

The empowerment from our senior leaders as well kind of goes back to those two things, but our senior leaders have been very clear on priorities. They've really been supportive of these new ways of working and have really empowered us too. And I think the last thing is we've definitely scaled our digital bandwidth to be able to meet all of the needs as well.

ECRM: How has the culture enabled Walgreens to change so quickly?

Kruse: I'd say that our culture has always been one of being a very mission driven organization with a lot of focus on the customer and patient. And through this pandemic, that has been a very clear driving force for us as an organization is that sense of responsibility that is ingrained in our culture to our customer and patient as what has been the driving force behind that kind of we have to do the right thing for our customers and patients through that. I'd say that kind of cultural sense of responsibility that we have to our patient.

ECRM: Can you tell us a little bit about the promotional programs you're running on Walgreens.com?

Kruse: We are an omni channel retailer, so we support all of the promotions that we run in store. We've rolled out enhanced senior hours with an enhanced senior discount, and we're obviously supporting that online. We're supporting all of our circular promotions as well, digitally as we've always done. And I think now more than ever, we feel very strongly that we need to continue to offer value to our customers, particularly as a lot of them are financially burdened. We are being very intentional about maintaining that promotional cadence and supporting across all channels. A proof point of that is that paperless coupon growth has hit record levels during this time as our digital engagement has grown.

We're continuing to split all those promotions. We still have integration with our loyalty program, Balance Rewards online, and continuing to support that. And then we do run digital exclusive promotions as well to be able to offer our customers additional value digitally, which during this time there are a lot of customers who are new shopping digitally. And so that's been a good way for us to reinforce our value with them.

ECRM: But beyond product essentials, what are the product categories or areas where you seeing growth on walgreens.com?

Kruse: We're seeing the spike in essentials that everyone has seen, but what's interesting is that... Or maybe not so interesting, it's somewhat expected, is that consumers really are starting to buy products digitally that they formerly perhaps would have gone into the store for. As they're coming online to get some of those essentials through us, they're also grabbing consumable products that traditionally you may have bought in store. We're seeing more behavior around preventatives as well, so think vitamins and those sorts of things that customers are getting ahead of from a health standpoint.

ECRM: What kind of recommendations do you give to some of those smaller suppliers, emerging brands looking to work together with you?

Kruse: I think the first thing is we want to make sure that we have the basics, right? Think about your digital shelf the same way that you think about your shelf in store. And if it doesn't show up right to the customer and you don't have products on that shelf, then we can't sell it. Really the most basic thing is we need to ensure that we get the product set up online and that we've got all of the right content and images and attributes so that your products show up to customers when they search for them online. That is really important.

I don't want to de-emphasize it because what’s really, really key is making sure that your digital shelf has the right capabilities behind it, so getting that content and everything in the right place. I'd say that's really the biggest thing is making sure that you invest in those right capabilities behind it so that you can show up right on the digital retailer shelf. I think also during this time there are a lot of customers who are new to shopping online, so that reinforces that even more is making sure that your product is showing up strong for them as they're shopping digitally and kind of getting their toes in the waters digitally.

Be being willing to experiment with us and test the waters with us on some of these new programs. With things like Postmates, for example, we're really working to generate awareness across the market. Being willing to co-invest with us on those tactics and help us think about new and different ways to drive awareness.

ECRM: As an omni channel retailer, do I have to be in store to sell online?

Kruse: No.We do offer an extended assortment online, and that's a great way for us to think about product life cycle in the right way. We use online as a testing ground for products in store, and it helps us drive a lot of insights. And that's another thing that I'd say is as a category expert, you, the supplier, are going to be able to provide us with insights and learnings about your specific category that we, as a retailer, may not be able to get ourselves. Make sure that you're bringing those to us and servicing that.

ECRM: Is the pathway to do that through your e-commerce team, Stefanie, or is it through the merchant team?

Kruse: It's both. If you have a direct relationship with the merchant team, start there and then they typically will filter the information down to my e-commerce team. But there are suppliers who have dedicated e-com account reps and they're working directly with my team individually. That's totally fine too.

ECRM: With the future ahead and with all the work you're doing, what does the audience need to know that you haven't really discussed yet? What do you want them to know about the future of Walgreens in the digital business?

Kruse: We're continuing to look really rapidly at how we expand the new capabilities that we've recently rolled out and how we build upon those and make them even better, and then how we work towards additional solutions to make it even safer and more convenient for our customers. We are really working to modernize the shopping experience, be able to get things to customers in kind of more convenient, easier ways. You can definitely expect to see much more coming from us in the very near future on some of these new capabilities that we rolled out and expect to see enhancements upon those.

ECRM: Well, that's great. That's a really good segue to my last question. With the future ahead and with all the work you're doing, what does the audience need to know that you haven't really discussed yet? What do you want them to know about the future of Walgreens in the digital business? What is it that the audience should know, the supplier audience should know, about your business moving forward?

Kruse: We are open physically and digitally right now. It's not one or the other. We've seen really positive momentum in our digital sales over the past several weeks, and we expect to continue to maintain that momentum, given what we expect to be some changes in customer behavior. And as I mentioned, it's given us kind of the opportunity to accelerate some of the initiatives behind our digital services. You could absolutely expect that we are going to continue to make enhancements digitally. We're working faster than ever to get things rolled out quickly and to test and pilot, and learn and pivot.

And that will be in addition to the efforts that are taking place in store, and we're going to look at how we bring together digital and physical in very different ways for our customers going forward.

ECRM: I really do want to thank you for the opportunity today and hopefully in the future we can reconnect and continue the conversation about your evolution and journey. Thank you and appreciate your time.

Kruse: Great. Thank you.


Wayne Bennett

Senior Vice President, Retail

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