The company, headquartered in Deerfield, Illinois, acquired both beauty.com and drugstore.com five years ago for $429m, according to wsj.com. Now, by the end of September, both are set to go dark.
Laureen Schroeder, principal consultant and owner at Bespoke Beauty Partners observes that, “clearly, the decision to close both beauty.com and drugstore.com means that Walgreen's will expand and invest to reinvent their e-commerce offering, [as well as their] social and digital platform.”
“The goal will be to convert the users of those sites effectively to the Walgreens' ecommerce site,” she predicts. “Walgreen's must benchmark the best in class beauty retailers like Ulta and Sephora to engage their consumers in a new and different way - otherwise they will switch,” Schroeder tells Cosmetics Design.
All things at once
Walgreens’ latest move isn’t coming out of the blue, and it’s certainly not a stand-alone endeavor in the industry. In October of last year, for instance, Urban Decay (a L’Oréal brand) made a play to consolidate its brand message with a global content site designed to roundup its followers from across the web.
Now, the mass market retailer has "over the past year…been focusing on building new omni-channel capabilities on Walgreens.com with initiatives that improved assortment and website user experiences, enhanced our digital coupon capabilities to provide more customer value and added digital tools into our stores to elevate our shopping experiences," according to an email received by Drug Store News. "Expanding on these efforts is an important part of our strategy," added the company.
Winning at ecommerce
It’s a matter of efficiency, in more ways than one, for the retailer. As wsj.com reports, the company is looking to reduce annual costs by $1.5bn. And Walgreens intends to cut jobs in Bellevue, Washington, as part of the initiative too.
It’s fair to say, though, that the new focus on Walgreens.com is not a guaranteed win. “Walgreen's must keep the same broad assortment but with an eye on curation that meets the need of the online consumer,” believes Schroeder. “If Walgreen's is effective, this could change the game for other drug store and mass market retailers who have been looking for solutions to win the online consumer - but have not made significant advances to date,” she tells this publication.
Consumer creep
Beauty brands at all market levels are adapting as quickly as possible to meet the expectations of consumers and be the best at ecommerce.
In this competitive market, “new e-tailers such as jet.com and credo.com as well as amazon.com, who want to lead in terms of beauty e-tailing, could stand to gain new consumers with this change if Walgreen's does not do it right,” Schroeder tells Cosmetics Design.