Walgreens outlines five key strategies to change the pharmacy retail industry
CHICAGO — One day before Walgreens hosted its 2012 annual shareholder meeting here Wednesday afternoon, the chain showcased its latest flagship store to its hometown crowd. It was Jordanesque — Chicago knows what a championship team looks like, the Cubs notwithstanding — and even as Walgreens stares down its Express Scripts counterparts across the field, the head office made one thing perfectly clear to Chicago and its shareholders: Walgreens no longer is on a path to own well; it's on a path to dominate well.
"Our opportunity now is to combine the best locations in America with an outstanding customer and patient experience — what we call the 'Well Experience,'" Greg Wasson, Walgreens president and CEO, told shareholders Wednesday afternoon. Wasson noted that the previous Walgreens management teams have passed along a store base that ideally is located on the Main and Main corners across the nation — 75% of the population lives within 5 miles of a Walgreens locations; 84% of African-Americans and 85% of Hispanic Americans live within 5 miles of a Walgreens. "Our goal is to create an experience unmatched in this industry by focusing on 'well,'" Wasson said.
Walgreens identified five key strategies that will help propel the pharmacy forward in a new era of pharmacy retailing:
First, Walgreens must transform the drug store to what it called a "health and living destination," Wasson said. "We're combining cutting-edge design with improved product assortment";
Second, Walgreens must advance the role the community pharmacy plays in the role of health care, bringing the pharmacist out from behind the pharmacy counter and front-and-center with the patient "to help void the access to health care in this country," Wasson said. In addition, Walgreens has been bringing its Take Care Health Systems and pharmacy operations closer together physically in an effort to foster a more comprehensive healthcare offering. By executing against this second strategy, "it enables us to quickly expand the scope of services we offer to our patients," Wasson said;
Third, Walgreens must deliver outstanding customer experience through more enhanced employee engagement. "Never in my 31 years with this company have I ever seen customer satisfaction jump like it does in these [Well] Experience stores," Wasson said. Customers keep telling him they want to stay in those stores longer, Wasson added, which is music to a retailer's ears;
Fourth, Walgreens must expand across channels and become the leading multichannel retailer. Wasson reported Walgreens is looking to combine terrific, physical locations with a superior online experience — the company's acquisition of Drugstore.com helps significantly advance meeting that objective, Wasson said; and
Lastly, Walgreens must continue to improve cost containment and make sure that "remains in our DNA," Wasson said. Examples of that include a new POS system that's rolling out across the chain that will help improve speed of service and will support the launch of a loyalty card program later this calendar year.
Walgreens' latest flagship store, located at State and Randolph (to check out the 100 photos Drug Store News snapped of the grand opening, click here) really shows the power an offense-minded drug retailer can deliver. It changes the game. There is "well" throughout the store. Convenience food featuring sushi, a juice bar and a self-serve yogurt dispenser, along with several aisles stocked with more healthier-for-you and just-picked-off-the-vine fresh options than you'd ever find in a downtown deli or convenience store.
But it's on the second floor that Walgreen's version of "well" really is on display — pharmacists on hand whose primary objective is not to adjudicate prescriptions but to counsel patients. And these pharmacists are armed with portable tablets they can use to dial up their patient's medical history and identify the appropriate gameplan to either manage or help prevent the disease state identified by the patient.
Beyond consultation there is inoculation — every one of Walgreens' pharmacists are certified immunizers. And each of these pharmacists have the capability of stocking specialty drugs in accordance with a patient's needs, 90 day at retail, 90 day mail, home infusion or administration of injectibles in a private consultation room. And just next door is Walgreens' Take Care Clinic, another "well" outlet that couples healthcare convenience with affordability and helps take trips out of the emergency room and into healthcare plans if a patient doesn't already have a medical home.
"With these innovative changes, we can more easily and quickly expand the scope of services we can offer in drug stores, such as immunizations and vaccinations, and acute and primary care," Wasson said. "This store is what we mean when we say we are stepping out of the traditional drug store format ... to leave our competition to compete with each other in the old, traditional drug store format."
With regard to the Express Scripts issue, Walgreens is fully committed to moving forward without being part of the Express Scripts network. "I want to assure you the underlying health of your company remains very strong," Wasson said, addressing the Express Scripts issue. "We remain committed to returning this company to top shareholder returns," Wasson promised. "The Express Scripts proposal would have reimbursed us far less than the industry average," Wasson added. "So we made the decision to move forward without Express Scripts, without being in their [pharmacy] network. ... It was the right decision for you, our shareholders, [and] our employees — I can assure you."
Walgreens has been promoting its Prescription Savings Club to patients seeking to stay with Walgreens after its split with Express Scripts. In the first week of the new year, nearly 125,000 customers signed up for the PSC, according to Walgreens.