drugstore2

Drugstore.com May Teach Walgreen's New Digital Moves

  |  March 24, 2011   |  Comments

Kantar's research shows the brands' ad strategies have followed different paths.

drugstore2Walgreen purchased Drugstore.com for $409 million. Walgreen, which operates more than 7,500 drug stores, was founded in 1901; Drugstore.com was launched 11 years ago during the dot-com boom.

While the newly teamed pharmacy brands tout similar product lines, they have had diverging online ad strategies.

According to research firm Kantar, Drugstore.com spent $927,000 on display ads during 2009, when it reported $366.6 million in online sales. Last year, Kantar says, the Bellevue, WA-based e-tailer bought $3.1 million in display ads, while it generated $456 million in Web-based revenue.

Walgreen's, on the other hand, purchased $8.5 million in display ads during 2009 and $5 million in 2010. It marked a 41 percent spend decrease for the Deerfield, IL-based retailer. Walgreen's, a $60-billion-plus annual firm, doesn't typically break out earnings separately for its Web site.

There's little doubt that Walgreen's execs will examine the online advertising practices of its new property, which has made its name as an Internet standalone. Drugstore.com marketers also stand to fine-tune their abilities to drive sales with offline tactics.

And it will be intriguing to see if Walgreen's decides to cross-market the two brands on their separate digital properties. From the Drugstore.com deal, the pharmacy chain also picks up beauty and health products sites Beauty.com, SkinStore.com, and VisionDirect.com. The acquisition will bolster Walgreen's online product selection by some 60,000 items.

"Our acquisition of drugstore.com today significantly accelerates our online strategy to leverage the best community store network in America by becoming the most convenient choice for health and daily living needs whether customers shop online or in our stores," Walgreen's CEO Greg Wasson, said in a prepared statement.

The two brands appear to have only had one minor relationship in recent years. Walgreen's has been using Drugstore.com's inventory information approval system since 2006. That point-of-sale technology allows retailers to accept payment by flexible savings account (FSA) debit cards.

Meanwhile, Drugstore.com has had an agreement with Walgreen's competitors Rite Aid and General Nutrition Center (GNC), where the website has been selling those retailers' branded product lines. It is not known whether or not those relationships will continue.

Tags:

ClickZ Live Chicago Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!

ABOUT THE AUTHOR

Christopher Heine

Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Media newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

IBM: Social Analytics - The Science Behind Social Media Marketing

IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.

Jobs

    • Tier 1 Support Specialist
      Tier 1 Support Specialist (Agora Inc.) - BaltimoreThis position requires a highly motivated and multifaceted individual to contribute to and be...
    • Recent Grads: Customer Service Representative
      Recent Grads: Customer Service Representative (Agora Financial) - BaltimoreAgora Financial, one of the nation's largest independent publishers...
    • Managing Editor
      Managing Editor (Common Sense Publishing) - BaltimoreWE’RE HIRING: WE NEED AN AMAZING EDITOR TO POLISH WORLD-CLASS CONTENT   The Palm...