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Walgreens launches iBeacon pilot to bolster coupon personalization

By
May 2, 2014

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Duane Reade’s iPhone app

NEW YORK – A Walgreens executive at the Mcommerce Summit: State of Mobile Commerce 2014 revealed that the company launched an iBeacon pilot program in several Duane Reade stores in New York earlier this week.

One of the main takeaways from the “Earning Customer Loyalty in a Mobile World” session is the growing role that in-store experiences are playing in helping Walgreens build out a mobile strategy. The decision to launch the iBeacon pilot is based on findings from Walgreens that the average in-store, online and mobile shopper spends six times more than the average store-only shopper.

“In Duane Reade, we now have iBeacon in our Duane Reade app, and we have a ten-store pilot in this market going on right now,” said Tim McCauley, senior director of mobile commerce at Walgreens, Deerfield, IL.

“We will alert you so that we take some of the friction out of even launching [the app] in the first place,” he said.

Dialing up in-store experiences
Mobile continues to play a key role in how Walgreens drives in-store traffic to its more than 8,600 locations in the United States.

Based on surveys that Walgreens has run among app users, 55 percent of app owners use it while in-store during 2013, which is up 42 percent last year.

Mr. McCauley said that Walgreens uses its New York-based Duane Reade stores to test new innovations that can then potentially scale company-wide, which the iBeacon pilot is a good example of.

The iBeacon technology is being used as part of a bigger in-store mobile coupon initiative that lets consumers digitally clip coupons and redeem them via a bar code on a smartphone.

The idea is that iBeacon will help consumers remember old coupons that they may have saved a couple of weeks ago from the app.

“[With] in-store mode, we’re trying to remove the friction that make it easier and easier for customers,” Mr. McCauley said.

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Walgreens’ Mr. McCauley

Walgreens’ app currently is set up with geofences around stores to help speed up the process of accessing the app.

Apple’s Passbook, Google Wallet and Samsung Wallet play a big part in this strategy to tie together Walgreens’ loyalty program and in-store shopping.

Refilling up on mobile

Walgreens has invested in mobile for quite some time and has 11 different apps, an SMS program and a mobile Web site.

Pharmacy and photo ordering plays a key role in the brand’s app, both of which continue to be growing areas for Walgreens.

More than one mobile prescription takes place each second, and 40 percent of digital print orders now come from mobile, per Mr. McCauley.

In 2013, mobile made up 51 percent of online traffic, and more than half of emails are read on a smartphone or tablet.

Now that the brand is seeing the majority of traffic coming from smartphones and tablets, serving up relevant content to the right consumer is a growing priority for the next generation of the brand’s mobile strategy.

For example, Walgreens wants to target mobile coupons based on past purchase behavior.

To create this personalized content, Walgreens tests multiple different mobile pilots and programs to better understand what consumers want from the brand.

“We will try out a lot of these technologies, test them out quickly and get a feel for, ‘here’s what this technology can do,’ so those quick innovations, quick proof of concepts that never see a customer, we do multiple iterations of those every week,” Mr. McCauley said.

“Those are the types of things that we will work for where we see the industry, [and] listening to our customer base on what they’re saying, listening to the industry and then doing a lot of rapid prototyping and such,” he said.

Final Take
Tim McCauley is senior director of mobile commerce at Walgreens, Deerfield, IL

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