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Walgreens sees hockey-stick growth for text alert program

BALTIMORE ? SMS text alerts are a big hit for Walgreens Co., a $63 billion drugstore chain which puts its 7,500 stores nationwide at the center of all marketing and commerce.

Walgreens has seen tremendous growth in registrations for its prescription SMS alerts in the eight months since the Chicago company began the program. In fact, SMS sign-up is outpacing email, according to a senior executive.

?Both are growing, but text alerts are hockey-sticking ? we weren?t expecting that,? said Abhi Dhar, chief technology officer for ecommerce at Walgreens.

Mr. Dhar was addressing attendees yesterday on the final day of the eTail East show that focused on mobile commerce and social media. (Please see the follow-up video at the conclusion of this story.)

Text is healthy
Walgreens is putting considerable marketing muscle behind not just the SMS program but also its iPhone application and a mobile site created by Usablenet.

For example, the company recently ran two 30-second rolling videos on a billboard in New York's Times Square where Walgreens has a store.

The messages on the two-story-high outdoor effort focused on its pharmacy and photo businesses.

Viewers of those spots were encouraged to order prescriptions and photos from the mobile phone and pick them up in-store.

In addition to downloading an application, these consumers were also asked to text the keyword WAG to the 21525 common short code. Those consumers who texted received a coupon for redemption in a Walgreens store.

While Mr. Dhar would not disclose the size of the mobile database, he did say that the SMS registrations were growing. So was the number of Walgreens application downloads.

?The customers want it,? Mr. Dhar said. ?What we realized is that we need to educate our customers [about mobile] offline.?

Walgreens uses Boca Raton, FL-based 3Cinteractive's mobile technology to support its text program.

Early adopter
Walgreens has been an early adopter with digital and electronic technology.

The retailer has linked its pharmacies by satellite since the 1980s. In 1999 it put customer prescription history online and, six years later, offered online digital photo services.

Now, like most retailers in this market, Walgreens is bracing itself for a host of macro factors affecting the economy: a healthcare crisis, an aging population, 9.5 percent unemployment and three quarters of declining GDP.

With all these economic woes, consumers continue to adapt to new technology and evolve behavior.

For example, 70 percent of mobile phone owners take photos on their phone.

However, it is the multichannel aspect with technology at its core that works for Walgreens.

?A customer that interacts with us in more than one channel is at least three times more valuable than one who interacts in one channel,? Mr. Dhar said.

Indeed, most Walgreens Internet customers prefer to order online and pick up in store. That is the case for 97 percent of photo orders and 98 percent of prescriptions.

Multichannel approach
Research shows that consumers are interacting with retailers and marketers in a myriad of ways, including social media, tablets, game consoles, smartphones and browsers.

The trick, as Mr. Dhar pointed out, is ?how do you, as a consumer, bounce from one channel to another and then another??

For Walgreens, he sees multiple contacts for one transaction.

For example, the traditional ecommerce site helps Walgreens customers browse, navigate, search and buy. The smartphone application allows for searching of information and inventory and purchase. The mobile site is used for price-based searches. And then these customers walk into the Walgreens store.

Mr. Dhar concluded his presentation with four points in summary.

First, consumers have changed and retailers have to deal with it.

Next, consumers think of choice, convenience and control. The definition is based on experiences in multiple sectors.

Third, mobile is an essential connecting capability for multichannel transactions.

?[Finally], there is no such thing as ?ecommerce? or ?mcommerce,?? Mr. Dhar said. ?Commerce is commerce.?

Final Take
Abhi Dhar is chief technology officer for ecommerce at Walgreens