How Walgreens’ Digital Marketing Group Translates Innovation Into Action

By Diane Merlino

When Walgreens decided to launch an online marketing group following the introduction of the company’s ecommerce division in 2008, they tapped Rich Lesperance for the job.

Lesperance already had an impressive resume. He’s built new businesses for major brands in the U.S. and Singapore and had worked for Dell with responsibility for a $4 billion P&L. Lesperance says he likes to combine “executive-level acumen with scrappy entrepreneurship.”

A lot has changed in the four-and-a-half years since Lesperance launched Walgreens’ online marketing group as the rapid-fire introduction of new technologies continue to render “the big new thing” into a traditional approach in just a couple of years.

“There’s really no more digital marketing and traditional marketing, or online marketing and offline marketing,” /uploadedImages/TW_Plus/xTW_Plus_Images_ONLY/CIPLesperanceLPET.jpgsays Lesperance, Walgreens’ senior director of Digital Wallet and Rewards. “I think it’s a sign of the times that you're seeing a lot more digital CMOs in charge of marketing at traditional companies.”

Lesperance spoke with Travel Weekly PLUS Editor in Chief Diane Merlino about the evolution and impact of digital marketing technologies at Walgreens and their applicability to other industries. 

Merlino: When you launched the digital marketing group for Walgreens in 2008 it was a brand new endeavor for the company. What was that like?
It's a lot of fun to come in when there's a clean slate, and to have the ability to build something from the ground up. It wasn't a case of having to undo a lot of things, which can be a challenge in a lot of big companies. And Walgreens is an amazing organization. As a company it's very forward looking.

Merlino: What was Walgreens’ objective in creating the group?
Our goal is to get people to use new channels in a way that helps them do their jobs differently or better, more efficiently. If you do it right, you actually don't need a separate team for every new channel that comes along. When I joined Walgreens four years ago to launch digital marketing, we always said that I would be launching myself out of a job.

Merlino: Has the group’s focus shifted over the last four years?
As we moved into 2010 and 2011, we moved our focus to social and mobile because those were emerging at the time. In 2008 and 2009 the focus was email segmentation, paid search optimization, and launching an SEO team — all the channels that you would call traditional online marketing channels now because they've matured so much.

In 2000, you remember, paid search was very much an emerging technology. Now the window for technology is going from the next new thing to a standard thing in a lot less than 10 years. Now it's about two years; now everyone is doing social media, everyone has got a mobile app. Now we’re pivoting to the next new thing. My team has always been focused on that next new thing, but with an eye toward how it will eventually fold into the organization for the good of our customers.

Merlino: What’s the “next new thing” you’re focusing on?
There's certainly no lack of new technologies, and everyone is talking about how to apply them, whether it's a QR code or NFC, which is near field communication that allows you to tap a PIN pad with your phone. All these things are very exciting and have huge potential. It usually starts with a lot of rapid experimentation.

The most interesting part for me is thinking about how the technologies will change the in-store shopping experience. It’s interesting to see just how dramatically a whole industry has pivoted from “we can make our website better” to “how do we bring digital into the store experience?”

Now that half of U.S. consumers have a smart phone the whole game has changed. People who have spent their newmediaLesperancewhole career thinking about Web technologies are walking into their local store for the first time with their phone in hand, and saying, “Gee, I wonder how I can solve this problem, or build an app for that, or use a new technology for that.”

It’s going to be really exciting to see what happens in the next five to 10 years. In 2000, when I was getting out of grad school, all the best minds in digital were going to pure-play companies like Amazon. I went to Dell, which is a great direct company. Now a lot of the best minds are going to omni-channel companies, so it will be interesting to see what everyone comes up with.

Merlino: Walgreens launched its smart phone app in 2009, starting with the iPhone then following up with versions for Android and BlackBerry. How has your strategy for using the app, and for mobile technology in general, evolved since then?
Our core businesses have been around for a very long time: we've been in the pharmacy business since 1901. I think the biggest thing that mobile in particular has done for us is to have us look at the businesses with new eyes, seeing that innovation isn't so much about adding a channel, like adding another arm or a leg. It’s really about changing the way you do business.

As an example, our first big mobile success was the ability to scan a prescription bottle to order a refill with the Walgreens mobile app. You can order a prescription refill in about 17 seconds, including the time it takes to take the phone out of your pocket, unlock it, and all that. We have a YouTube video out there somewhere showing that, so I can back that up. Customers loved it so much that they actually said they wished they had more prescriptions to fill.

Merlino: How many people are currently using the mobile app and the scanning capability for prescription refills?
We have shared publicly that 40% to 50% of our online prescriptions come from mobile, and a lot of them are using the scanning feature. It obviously has the most value to people who are juggling a lot of prescriptions. The fastest way to order before this method was to pick up the phone and use our touchtone or IVR ([interactive voice] systems, unless you wanted to go to the store and drop it off.

It really was a game changer for us, and we looked at the business with new eyes. We could just add mobile as a channel and not take advantage of the fact that there is a camera on this phone and there’s a way to develop scanning technology, which we have several patents for. And that’s where innovation gets exciting, because you're thinking of using technology in a way no one has thought of before. In our case, we're a pharmacy, a photo business, and a retail destination for health and daily living, and we want to deliver something new and exciting that's never been done before. 

Merlino: What lessons have you learned introducing innovations with mobile and other technologies that would be of use to people in other industries, like travel?
Speed is really the key for us. We found that moving quickly and being first really matters. It’s as relevant to mobile as to social media, and it's not always correlated to the level of investment you make. It’s more of a mentality, and it's a talent question. You find the people who thrive on speed, and give them the proper training and tools. That’s an important ingredient.

On Super Bowl Sunday we got some coverage for our real-time content that we sent to our Facebook fans and our Twitter followers around the power outage that happened. Walgreens was one of maybe three brands that were mentioned. Oreo also got some great kudos for doing a real-time ad.

We sent out kind of a cheeky tweet about how we sell batteries and candles. It’s that authenticity that’s important. Obviously it wasn't canned and pre-written by a committee. It was created by real human beings who are well trained and understand our brand, who are being creative.

In order to have speed like that, you also have to be willing to give people power to make those decisions, and not treat it like a lot of other things that would normally go through a nine-month release cycle. It’s an interesting cultural shift that's great for customers; it got a lot of likes on Facebook.

Merlino: It sounds like a whole new way of defining marketing.
It's a different way to approach messaging your customers. Another interesting thing has been that we're blurring the lines between what you would call marketing, product development, and communication with your customers. We can still call it marketing, but I think most marketers today know that marketing as we knew it is dead, and we need to create an authentic dialogue with customers in social media.

That’s actually a way you can start your marketing campaigns. Rather than social being an add-on to other channels, it's now evolving to where the primary call to action can be social in nature, and the other channels support it. That’s the inverse of the way it was a few years ago. 

NEXT ISSUE: Rich Lesperance covers “the next big thing” in emerging technologies that will have an impact on brand marketing.  

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