WBA Vendor Summit:Topline Take-Aways for Supplier Success in 2024

Don’t take WBA for granted in the new year; WBA is well-positioned to seize the opportunities of a dynamic marketplace and be the partner of choice. That was the strong, clear message to suppliers from new Walgreens Boots Alliance (WBA) CEO Tim Wentworth at WBA’s recent Annual Vendor Summit. In particular, he spoke about the company’s drive to evolve healthcare delivery - building on its trusted reputation and pharmacy strength - and the role suppliers could play. Joining him at the Summit to provide key perspectives were:

Tracey Brown, Executive Vice President and President of Walgreens Retail and Chief Customer Officer, who is responsible for the Walgreens consumer experience across all consumer touchpoints and is overseeing the transformation of Walgreens to a healthcare company
Heather Hughes, General Merchandise Manager, HBC
Dale Johnson, General Merchandise Manager of consumables, with responsibility for the chain’s grocery, household, and general merchandising business.

Together, they offered great insights that will be important to refining business plans in the new year. Not able to participate? No worries. MPG VP Sales Dustin Sullivan shares his top-line takeaways:

COMPANY-WIDE UPDATES

Continued focus on WBA’s Enterprise strategy, centered on purpose - “More joyful lives through better health” – and informing decision-making: There are four pillars of WBA’s health-centered ESG strategy: Healthy Communities, Healthy Planet, Healthy and Inclusive Workplace and Sustainable Marketplace. WBA fully expects suppliers to continue to progress on increasing product sustainability, and will continue to monitor through rigorous measures and detailed assessment tools.

Omnichannel Traffic Remains Strong. WBA sees 2B visits each year. Digitally, they have 2B impressions annually, and they interact with 10k consumers per minute. The company continues focus on offering a true omnichannel experience, with fully integrated physical and digital platforms supported by the latest technology to deliver high-quality products and services in communities nationwide.

Walgreens’ “Fly Wheel” doesn’t change; it evolves. Health remains at the core as Walgreens strives to create the most convenient Health and Wellness destination by expanding digital and physical products, services, and connections with the consumer. The flywheel is evolving to include approx. 8,000 stores with pharmacists, stores with Health Corners offering nurse practitioners and others for help with chronic conditions, in-store Village MD primary care clinics, a partnership with Shields Health in specialty pharmacy, and CareCentrix for acute home care and senior home care. The goal is to increase customer/patient visits and achieve better patient health outcomes. B2B partnerships will bring more patients and customers, driving profitability and their ability to reinvest further in healthcare.

Market “truths” require potential adjustments: Consumers continue to pull back discretionary spending in an inflationary environment and seek less costly, value-based alternatives. Recently, Walgreens announced the launch of its new Rx Savings Finder, a simple-to-use digital tool designed to help customers save money on prescription medications. Rx Savings Finder finds free, third-party discount cards, providing patients with a quick and easy way to find lower prices on their Walgreens medications. Suppliers should also be reassessing pricing, promotion and innovation strategies within these “truths” for 2024.

DEPARTMENT UPDATES

Health & Wellness in 2024: Despite economic pressures, consumer interest in the category, which jumped during the pandemic, continues to be strong. In 2024, Walgreens is looking to provide consumers with the best personal care solutions that promote personal health and wellbeing. Particular focus will be on Acute, Vitamins, Women Wellness, Caregivers, and Diabetes.
- Walgreens will continue to position as the premiere skin health destination in 2024. Combining in-store pharmacists and beauty and skin consultants with ongoing education and training and dermatologist-backed skin products, including their owned brands, they wish to be the most trusted source for information on skin health that customers and patients.

Beauty & Personal Care in 2024: With consumers looking for trusted advice, there will be greater 2024 investment in Walgreens beauty advisors, with opportunities to train them on select products. Also, more price-sensitive consumers will be expecting elevated assortment, fair pricing, competitive promotions, targeted/personalized offers

Consumables/Household/Seasonal:
- Planogram segmentation/clustering will be a strategy. Think about, what is the role of an item (balancing existing items, new item introductions, and own brand)?
- Look to drive immediate consumption and win seasonal fill-in trips, converting prescription, photo and greeting card trips so that they include a consumables purchase. Again, address price-sensitive consumers. develop high impact promotions.

Core Strategies in 2024: Walgreens’ core strategies will remain the same: Simplification, Convenience, Engagement.
- Simplification: Have the right products in the right stores (20% of items sell <1unit/week), cash effectiveness
- Convenience: Ensure always accessible to consumers. 80% of consumers now get walgreens.com orders in <1 hour
- Engagement: There are currently 113M My Walgreens users. Walgreens will be customizing the website and app consumer experience through AI for richer engagement next year.

What needs to change in 2024? From the retailer’s view: How we partner and how we organize ourselves. Walgreens is looking for help with where they should invest, how they drive innovation, and how they can provide increased value. This includes recognizing that inflation has slowed, and they are looking for cost changes, slowing or decreasing to be in step.

Implications for Suppliers - Top Things to Think About to Succeed:

Ensure current products and planned innovation support Walgreens’ ESG policies and goals.
Help connect the dots for the consumer. Walgreens is focused on connecting the dots between their retail services, offerings and experiences – across their healthcare business and pharmacy business. How can you, as a supplier, help Walgreens connect the omnichannel dots for the patient/consumer, ensuring a seamless experience across all areas?
When developing your sell-in story for health and beauty products, look carefully at what drives your target consumer, and have a deep understanding of how, where and when they engage with Walgreens.
Planogram segmentation/clustering will be a strategy. Consider the role of your brands and items when offering new item or distribution expansion recommendations (balancing existing items, new item introductions, and own brand)?
Be excellent with omni and keep pace with Walgreens’ desire to enhance their shoppers’ experiences, either online or via the My Walgreens app.
Leverage Walgreens investment in in-store experts (pharmacists, beauty consultants and skin health advisors) to serve as your brand ambassadors.
Overtly capitalize on shopping trips to build your brand’s consumption (seasonal fill-in trips, filling scripts, picking up photos or greeting cards).
Be sensitive to the price conscious shopper – invest in an appropriate level of promotions and discounting to attract their purchases.