Over the years, I've stayed in touch with the out-of-home media space, thanks in large part to the amazing leadership of Barry Frey, CEO of the Digital Place Based Advertising Association.
So when I was invited to the DPAA conference last week, I found myself wondering about the line between in-home and out-of-home in the new always-on world of digital media. And I'm pleased to report, the changes are significant.
Patrick McLean, the CMO of Walgreens, provided a roadmap that was both surprising and inspirational. Standing in front of a packed room of 600 digital marketers, McLean shared an insider's view of Walgreens that made one thing powerfully clear: There is no longer a line between mobile, place-based, outdoor, and digital media.
The retail pharmacy has offered online prescription services since the late '90s. In 2011, Walgreens acquired drugstore.com and its brands, which included Beauty.com, SkinStore.com, and VisionDirect.com. Smart, but too early as it turned out, since they were shuttered in 2016 and 2017. But hardly dismayed, Walgreens moved to launch major digital initiatives in 2020.
As McLean explained, Walgreens is growing its consumer outreach with the vision of mass customization -- a series of web experiences that have all been the rollup to Mywalgreens. The program offers new benefits, including Walgreens Cash rewards for purchases and personalized "Only for You" discounts.
A redesigned mobile app delivers a personalized experience with daily health and wellness recommendations. This type of mass personalization boosted Walgreens' retail sales by 100 basis points in the third quarter of its 2021 fiscal year.
Meanwhile, Walgreens Advertising Group is shifting the company from a pharmacy retailer to a media company. By leveraging insights from 100 million Mywalgreens members, Walgreens was able to use one billion daily digital touchpoints and a firehose of in-store shopper data to help brands deliver personalized experiences to shoppers, both in-store and online.
Enhanced audience insights, creative services, and robust optimization and measurement capabilities are all part of the WAG toolkit. And blurring the line between retail and media further, Walgreens added a new suite of television ad capabilities, with advanced and audience-based television via over-the-top media services, connected TV, and traditional audience-based linear TV allowing brands to reach even more customers wherever they consume media. Walgreen's first-party data is a powerful tool for advertisers as platforms like Apple move to restrict access to tracking data.
Walgreens has had "to reinvent ourselves throughout the COVID experience," McLean told Cheddar's Hena Doba after speaking at the DPAA conference. "I mean, obviously, the experience of vaccinating America was a big part of what we've accomplished over the last several months, and, uh, we weren't in that business even ten months ago. We were in the vaccine business through flu shots and things like that, but this took it to a whole other level."
He explained further: "The technology that powers these digital out-of-home networks, the more we can connect those, the better the experience is going to be both for the customer but also for the advertiser. The more that I can specifically give you a relevant message in a moment where I know where you're physically located, it creates an endless set of possibilities in terms of what I might deliver to you as an advertiser. Video allows us to have a richer creative execution."
Chief Executive Officer Rosalind Brewer explained the strategy as "accelerating our investments in technology innovations that support mass personalization, pharmacy of the future, and the next phase of growth in tech-enabled healthcare."
Mass personalization is a complex field, and given the deep and often personal information that pharmacies have about customers' needs and health care profile, Walgreens will have to move carefully to balance the value of personalized media to both brand partners and customers with an awareness of the sensitivity of targeting based on personal information.
McLean is aware of the power of personalization, and Walgreen's focus on providing value to consumers remains at the forefront of all their technology innovations.