Walgreens Leverages Customers' Smartphone Behavior to Drive Mobile Purchases - eMarketer

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Walgreens Leverages Customers' Smartphone Behavior to Drive Mobile Purchases

June 1, 2016


Kartik Subramanian
Director, Product Management and Mobile Commerce
Walgreens

Walgreens customers use their mobile devices to research products, but they don’t convert until they get to the store, according to Kartik Subramanian, Walgreens’ director of product management and mobile commerce. Subramanian spoke with eMarketer’s Tricia Carr and explains that the pharmacy chain is now exploring ways to effectively engage with smartphone users while they’re in store and measure the impact of mobile on in-store purchases.

eMarketer: How has mobile changed the customer’s path to purchase?

Kartik Subramanian: Ever since we launched our mobile applications in 2009, we’ve been focused on using mobile as a way to reduce friction from the customer’s shopping path. From our flagship Refill by Scan feature for prescriptions all the way to our new Apple Watch experience, we’ve identified simple solutions that leverage the power and the computing capabilities of the device to reduce one of those steps from the path to purchase.

eMarketer: What are customers doing on mobile prior to making a purchase?

Subramanian: We’ve seen a broad, macro trend across the retail industry where consumers are increasingly using mobile to research products, whether it be via apps or mobile-optimized websites. Once they’re informed about a product, it ultimately results in a trip to the store.

“Mobile will become a model through which consumers want information in bite-sized chunks, but they might not be willing to pay for products via the app or site yet.”

We’ve seen an increase in those kinds of behaviors. Consumers are using mobile to research, but they convert much less [on mobile]. This leads us to believe that mobile will become a model through which consumers want information in bite-sized chunks, but they might not be willing to pay for products via the app or site yet.

eMarketer: Are there ways to encourage customers to convert before their trip to the store?

Subramanian: We launched same-day and one-day delivery options with partners like Google Express, Postmates and Deliv. We provide our partners with our digital product catalog, let them pick and pack items in the store and deliver to our customers.

This is in response to a broad customer need for instant gratification of a specific product. We were aware of Postmates and some of the other companies in the on-demand delivery space, and we’ve been able to properly respond to that need.

eMarketer: Are you measuring how mobile is influencing in-store purchases?

Subramanian: The holy grail is omnichannel attribution. How does a consumer’s action on a mobile site or app result in a transaction, be it in the store or on any of our digital properties? That’s a challenging proposition to solve.

Like many retailers, we’ve made significant headway in closing the gap between attributing an action on the mobile site or app to a transaction in the store. The first step is trying to identify when a customer walks into a store using available technologies like geofencing, and then engaging them appropriately with the expectation that they’ll become a happy customer and transact.

“The holy grail is omnichannel attribution. How does a consumer’s action on a mobile site or app result in a transaction?”

eMarketer: Has beacon technology helped with in-store analytics?

Subramanian: Walgreens launched a small beacon pilot in about 10 Duane Reade stores in New York a couple of years ago. We got a lot of insight from our experience that is influencing our decision to move forward with an appropriate in-store [beacon product].

We haven’t nailed it yet and in fact, nobody in the retail space has nailed what that in-store [beacon] solution should be—maybe with the exception of Apple. There’s a whole suite of in-store analytic solutions from beacons and geofencing to video analytics that generate real-time heat maps of where customers are.

We are evaluating multiple solutions in time because it’s a balance between making the capital investment and trying to build a model for ROI [return on investment].

eMarketer: How will mobile influence in-store behaviors and purchases in the future?

Subramanian: We look at technologies and solutions, whether it be consumer-facing or employee-based, that will remove points of friction from the path to purchase. It could be as simple as using a geofence to identify when a customer walks into a store and showing them information like their point balance and store-specific promotions, which would be useful to know before they purchase certain products.

It’s critical to leverage the mobile phone as a way to identify where the customer is at a specific point in time and make the message unique to a customer’s needs.

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