Why Walgreens Bets on New York to Test Digital

3 pilot programs indicate big plans

Over the past couple of years, Walgreens set up its 250 New York Duane Reade locations to test small digital programs to determine which should be rolled out nationally. Duane Reade’s Calvin Peters, digital communications manager, talked to Adweek about three different initiatives that are fueling this larger digital strategy.

Weather-triggered coupons

Unlike Walgreens, Duane Reade does not offer e-commerce, so mobile plays a big role in how Duane Reade tries to use digital in driving store traffic.

One of the more interesting mobile programs took place earlier this year when the brand teamed up with Poncho, a weather alerts service in New York and Boston, to pilot a mobile coupon effort. Poncho personalizes daily weather alerts based on a profile that users fill out when signing up, and the forecasts are sent via email or SMS.

Walgreens worked with brands like Claritin and Allegra to target high-pollen index days. Consumers who indicated that they suffered from allergies may have seen branded links attached to coupons or content dropped into their daily weather forecasts on these days.

Between March 17 and 24, 1,034 Poncho accounts (910 of which are still active) were created to participate in Duane Reade’s promo. The SMS coupons generated a clickthrough rate of 4 percent to 5 percent, and the emails generated a 60 percent open rate.

"It’s one thing reaching a customer whenever, wherever they are from an omnichannel, buzzword perspective," Peter noted. "But when you can reach them from direct, actionable content that’s relevant in their daily routine, that’s crucial."

Bulking up on beacons

Duane Reade is also loading up 10 of its stores with Apple’s location-based iBeacon software. The beacon technology works with the pharmacy brand’s app to serve up store-specific coupons.

The beacons were rolled out in conjunction with a new version of the Duane Reade iPhone app, which will possibly include an Android version later this year. When consumers open the app in one of the test stores, they can access weekly ads, coupons, shopping lists and product locator tools.

Duane Reade’s beacon program is still running, so Peters did not have specifics on results yet but indicated that there is potential in scaling the effort nationwide. "That [is] an example of something that, based on the tests at Duane Reade, may scale nationally at Walgreens," he said.

Generating social buzz

Duane Reade has a group of New York-based influencers—dubbed Duane Reade VIPs—to constantly churn out content about the brand on social media. Influencers are paid in the form of money or incentives like gift cards via the brand’s social agency of record, Collective Bias.

The Duane Reade VIPs are invited to bi-annual corporate meetings to stay tuned into the brand’s happenings, even when digital campaigns aren’t running. The influencers are part of the company’s ongoing "Get social with Duane Reade" strategy has been in place since early 2012.

The idea is to prove that social can drive sales through brand advocacy, a consistent voice and public relations integration. For example, Duane Reade ran a Facebook contest last year to promote a line of branded hosiery. Influencers posted social and blog content showing off how they styled outfits with tights, resulting in 7,877 pieces of content and 141,310 blog views. In-store signage and collateral also promoted the campaign.

Duane Reade claims that the social campaign boosted hosiery sales 16 percent year over year. The chain pulled in $5,705,778 in tight sales during 2013 compared to $4,917,992 in 2012.

"Our social voice is very distinctive here; Duane Reade’s social voice is witty [and] fun, but really New York-centric. That’s across all of our social platforms, and it comes to life in an authentic way with our brand ambassadors and their content, respective blogs and social posts," Peters said.