Out-localizing nationals; out-nationalizing locals
The power of local times 8,000. That’s perhaps one of the most significant transformative tools possessed by Walgreens, which over the past three years has moved to empower its local operators to leverage corporate assets in a single mission to win in each of the markets it serves. It is helping transform the front-end of its stores through regionalized product assortments and full-court press around “fresh.” It also is helping expand the role of community pharmacy through unique collaborations with local healthcare systems, schools and employers that target individualized healthcare solutions, from vaccinations to smoking-cessation programs. “It’s what I call out-localizing the nationals and out-nationalizing the locals,” explained Mark Wagner, Walgreens president of operations and community management. “That’s our strength.”
The transformation toward local first began in 2009, when Wagner, a 35-year Walgreens veteran, then EVP operations, led the decentralization of Walgreens’ field management team that was marked by the company’s market VPs being relocated to their respective territories, which now number 30.
To help better identify that structure all the way to the top, Walgreens recently rebranded its corporate campus with new signs that read “Community Support Center.” “That’s what this whole [headquarters] here represents,” he said — a resource that can help support market needs from employee relations and HR capability to merchandising and marketing.
Each Walgreens market VP now is tasked with developing a “Plan to Win,” a local market playbook that helps identify nearby vendors and partners who will help drive health-and-wellness initiatives.
“What we have now is people out there. They live in the markets, they breathe the markets, they’re on the boards of organizations in a lot of these markets, whether it’s with the Rotary or business associations or whether it’s healthcare systems,” Wagner told DSN. By building stronger relationships within the community, market VPs are better able to keep a finger on the pulse of the communities they serve. “That’s all about winning in that space because everything [is local]. Politics is local, health care is local and merchandise is local,” Wagner said. And that means just about everything about retail pharmacy needs to resonate locally, too.
But what does local really mean? It means identifying unique opportunities with local healthcare practitioners on ways to help the community get, stay and live well. “I was in Appalachia, [Tenn.], and I met with the COO of the Wellmont Health System — we have an on-site pharmacy at one of their hospitals — about what we can do to leverage our pharmacy on-site,” said Wagner, who, in his role, frequently gets out into the markets to meet with local health systems, employers and other stakeholders to explore new opportunities with organizations that help reduce costs and increase access to care. “The interesting thing is it’s always the same — they want that local involvement.”
As another example of local, a Walgreens community leader recently sold an immunization program to a local summer camp operator that was affiliated with eight other camps. “So for the camps this past year, they gave out 8,000 vaccinations,” Wagner said. “In the world of retail today, the operator has to possess different talents and a different skill set in order to go in the direction this company is going in,” he said. “[And that’s] in terms of winning overall, first in health and wellness, and outright owning the strategic territory of well. … It’s got to permeate all the way down to 8,000 store managers, 1,200 community leaders, 220 district managers and 30 market VPs.”
To be sure, a key focus of Walgreens’ localization efforts is in fresh — from sourcing fresh fruit and vegetables to working with local vendors to fulfill its grab-and-go programs, and even identifying brands that resonate with local shoppers. “If you do it right, you’re adding more customers into that store. They’re buying more products,” Wagner said. “We’ve rolled out fresh in more than just Well Experience markets. It’s worked out great.”
With support from its Merchant Group, they are assisting in making the right local product selection for Walgreens stores.
As part of Walgreens’ recent restructure, the chain created an inventory strategy and localization team that works with its local operators to ensure best-in-class local products are shipped to the stores at the best price. It’s a concept Walgreens calls “Mass Customization,” and the retailer aims to use its boots-on-the-ground operating structure to better leverage local opportunity. This activity is critically informing Walgreens’ merchandising decisions and ensuring that each of its stores strikes the right balance of content relevance. “Common where possible and customize where it counts,” added Wagner.
Establishing a strong local pedigree that best serves a community is more than just good business sense. With the Internet serving as the great equalizer, trading on price or convenience is becoming less and less relevant. Retailers of the future will need to trade on experience, Wagner said. “We’ve got to get off the transactional relationship inside our stores, whether it’s in pharmacy, Take Care or the front end,” he said. “You can’t compete by just lowering your prices. Convenience is only going to get you so far. … You’ve got to evolve and change that experience.”
A major part of Walgreens’ end-game strategy is to become the first choice for health and daily living in America. It wants each of its customers to see their local store not as a Walgreens but as “My Walgreens.” The only way to get there is to go local.