How Walgreens Dropped The Ball On Retail Media

Roz Brewer recently stepped down as CEO of Walgreens after just over two years at the helm. During her tenure, Walgreens’ stock dropped by nearly one-third. Now, many are scrutinizing the strategic missteps that occurred under her leadership. One that isn’t mentioned enough, however, is her mishandling of retail media.

In December 2020, Walgreens launched its retail media network, the Walgreens Advertising Group (WAG), to much fanfare. Given the unique first-party data Walgreens had access to, it was an attractive offering, especially with increasing identity deprecation and evolving privacy regulations impacting online advertising.

However, when Brewer assumed the CEO role in March 2021, right after WAG’s launch, there was a notable decline in emphasis on the company’s retail media ambitions. Under her leadership, only two formal announcements about WAG were made, with the last being more than a year ago. Retail media also hasn't featured prominently in recent earnings reports, implying it wasn't prioritized.



The backdrop of this is particularly striking, considering eMarketer’s projection of a 25% spike in U.S. retail media ad spending, pushing it past $51 billion. Retailers and brands are all launching their own media networks to gain access to that spend.

In fact, a study by LiveIntent further supports retail media’s importance, revealing that 63% of marketers see retail media advertising as surpassing other digital channels. The expectation is that it will be a cornerstone for digital advertisers moving forward. But Walgreens, under Brewer’s direction, seemed to stall out. It’s also notable that Luke Kigel, who ran WAG, recently left the company. 

In contrast, retailers like Walmart, Target, and Kroger are capitalizing on this trend, understanding the value of retail media. A Lotame study ranked the most promising retail media networks among physical store brands, as perceived by marketers. Target was the leader with 15%, trailed by Costco, Best Buy, Ulta, Sam’s Club, and Lowe’s. Notably absent was Walgreens, pointing to missed opportunities and potential revenue.

Walgreens’ lack of interest in retail media has even extended to the in-store environment. Cooler Screens, a company digitizing in-store retail spaces for use as physical retail media networks, has filed a lawsuit against the company, citing Brewer as blocking its technology’s rollout. The suit claims, “Brewer decided that she did not like the way [the technology] looked.” Given bullish predictions around in-store retail media, this decision seems more than shortsighted.

Insider Intelligence anticipates in-store retail media will grow fivefold between 2022 and 2027. Why leave money on the table? Highlighting how clear of a missed opportunity this has been, over the summer, Walmart revealed it would invest in in-store retail media, while Kroger said it would be expand its Cooler Screens relationship. 

For all these reasons, Walgreens' lack of a retail media strategy raises questions for its board and shareholders. While Brewer's tenure might be noted for cost-saving initiatives and store closures, her oversight in retail media will also leave a mark. It will be interesting to see how the company pivots in the post-Brewer era -- and whether it can make up for the lost time in this space.

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