Walgreens is using behavioral targeting to engage customers in its stores.
The nation’s largest drugstore chain has partnered with Catalina Marketing to print targeted coupons in its 6,000 stores, which are given to customers based on their purchasing behaviors, as they receive their receipts. Catalina runs in-store promotions in about 25,000 grocery stores and 14,000 pharmacies nationwide.
Catalina Marketing promotions and advertisements are triggered based on the consumer’s purchase behavior — either by UPC scans or Card IDs — and delivered at the point of sale.
Walgreens’ overall strategy is to leverage consumer data more effectively, which Doug Egan, VP of marketing services and research for the company, said has ramped up in the last six months.
“[It’s] part of a larger understanding that purchasing behavior can be changed in-store,” he said. “Truly, the trackability of it is great. We can track purchases by store, time of day and even register.”
Walgreens’ marketing spend is still dominated by its circular — 60 million per week — and by direct mail.
Egan said that in-store promotions, currently accounting for 10% of Walgreens’ marketing spend, are growing, thanks to the success of the Catalina promotions.
“What we’ve heard from customers is that they are useful,” he said.
Average Walgreens stores see between 800 and 1,000 customers per day and print Catalina coupons for about 10% to 12% of them. About 6% of those printed are redeemed at a future date, said Egan.
The goal of using Catalina coupons or behavior targeting overall is to expand the consumer’s shopping basket, said Egan.
“The average purchase, not counting pharmacy, is three to four items per store visit, and two store visits a month. We want to add a trip a month,” he said. “It’s great to see data of what a customer is purchasing in real-time. You can then offer related programs. If they purchase two twelve-packs of Pepsi, we can target them with a coupon for a dollar off of three twelve-packs. You can see what customers purchase consistently.”
Walgreens can also offer promotions in the pharmacy by printing offers related to a prescription someone is picking up.
“It’s truly one-on-one marketing,” Egan pointed out.
