1. Channel: Drug

Walgreens Pivots To Store-Based Home Delivery

The Wall Street Journal reports that “Walgreens Boots Alliance is betting its 8,700 bricks-and-mortar stores, and not a network of fulfillment centers, hold the key to speeding up delivery of online consumer orders and increasing sales.

“The pharmacy giant recently closed a warehouse in Edwardsville, Ill., dedicated to filling e-commerce orders for household items such as toothpaste and nail polish, signaling that it is going all-in on the idea that its stores will do double duty as both retail outlets and hubs for home deliveries.

“Walgreens will have its store employees pick and pack items for same-day delivery through third-party apps such as DoorDash and Uber Technologies’ Eats division.”

According to the story, “The strategy, which doesn’t include the company’s pharmacy operations, is meant to make handling of online orders more efficient by having a single system for handling goods rather than managing separate distribution networks for e-commerce and in-store sales. Walgreens says 78% of Americans live within 5 miles of one of its stores.

“The Deerfield, Ill.-based company joins other retailers including Target, Walmart and CVS Health that have started fulfilling more online orders out of stores as a way to speed up shipments, streamline inventory and make more use of their physical sites.”

The company will continue to used centralized, automated fulfillment centers for online prescription orders.

KC’s View:

Interesting decision for Walgreens to make, especially since the general perception is that many of its stores are inadequate to yesterday’s business challenges.  Adding this functionality to the stores – many of which, I’m guessing, have too few staffers to get the work done – strikes me as problematic.  And not necessarily the prescription needed to achieve its stated goal of being a bigger player in the healthcare ecosystem.

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