Walgreens 2012 Annual Report Download - page 6

4 2012 Walgreens Annual Report
online products, and receive bonus awards when they keep coming back.
We award points for prescriptions – and even when members join in the
Walk with Walgreens personal exercise program. The customer insights we
learn through Balance
Rewards also will enhance our customer experience.
Advance community pharmacy:
The U.S. Supreme Court’s decision upholding the core provisions of the
Patient Protection and Affordable Care Act was the year’s top healthcare
news. In a rapidly evolving healthcare market, Walgreens continued to
seize new opportunities to deliver convenient, high-quality, affordable care –
and help address the nation’s healthcare needs.
Building from our foundation of approximately 8,000 stores, more than
26,000 pharmacists, more than 37,000 pharmacy technicians and 1,300
nurse practitioners at the 700 Take Care Clinics and workplace health and
wellness centers, Walgreens is quickly moving forward to serve as a leading
community pharmacy, health and wellness provider, and valued partner for
payers and patients, as the first place for daily healthcare. Our healthcare
strategy is designed to link all patient touch points and channels – stores,
online, telephone and home delivery – to achieve three goals:
• Enhance our core pharmacy business. We are promoting and providing
medication adherence, diabetes management, children’s health, wellness
education, HIV care and other services that build trusted relationships
by providing best-in-class patient experience. To that end, we are pursuing
efficiencies that free up pharmacist time to engage with patients and practice
at the highest level of their profession.
• Expand beyond our core pharmacy business to provide broader retail health
and wellness services, from prevention and screening services to chronic
care management. Walgreens acquired BioScrip, Inc.’s community specialty
pharmacy business to expand our role in serving HIV, oncology and transplant
patients and others with chronic and complex health conditions that require
intensive drug therapies. We are also expanding nurse practitioners’ scope of
services beyond minor episodic care and broadening their duties to include
closer collaboration with primary care physicians.
• Evolve from our traditional pharmacy, health and wellness business to
become a valued partner for doctors, health plans and health systems, helping
to manage a variety of patient populations while improving total health
outcomes and lowering costs.
Recognizing how we are transforming community pharmacy, Fast Company
magazine named Walgreens to its list of Most Innovative Health Care Companies
for the second time in three years. Demonstrating this innovation, Walgreens
continued to be the nation’s number-one private sector provider of flu
vaccinations. When the U.S. Secretary of Health and Human Services,
Kathleen Sebelius, the nation’s top healthcare official, received her flu shot
last winter, she went to Walgreens.
Delight our customers:
By “Well Experience,” Walgreens means more than stores, product selections
and prices that delight. Well Experience comes down to the women and
men of Walgreens who deliver health and happiness when they engage our
customers and patients.
As we reimagined our stores, we also raised the bar on employee-customer
engagement with significant investments in training and development of our
leadership and store teams. The curriculum includes an intensive Leadership
Academy and, in fiscal 2013, Walgreens University for employees.
Also, this year we launched a new customer-experience curriculum and change
management program for our front-line store team members, emphasizing
three principles of service: Easy – make it easy for our customers to do business
with us; Recognize – care for and connect with customers; and Solve – own
our customers’ issues, and see them through to resolution. Store managers
are training to better engage and motivate employees.
Our customer experience pilots have focused on giving our customers a
different experience than all other retailers at the key touch points in
pharmacy, beauty and daily living. In addition, we now have rich customer
segmentation data that will allow us to differentiate even further,
personalize our services and measure our effectiveness. For example,
we are piloting a service model for chronic-care patients, such as those
with diabetes or HIV, that will help them take control of their healthcare
and wellness decisions.
Our goal is to ensure every Walgreens employee adopts an extraordinary
customer-service mindset, and that we embed actions and behaviors that
advance our customer care.
Expand across new channels and markets:
As the world becomes more interconnected through global commerce and
e-commerce, Walgreens continued extending our reach to new channels
and markets.
We broke even more new ground this year in harnessing e-commerce and
mobile technology. Leveraging our convenient brick-and-mortar locations
with leading-edge online options, we are giving customers even more of what
they want – a broader selection of products and services, where they want
it – whether delivered to their homes or available for pickup at the store,
and when they want it – two days, next day or next hour.
As we advanced our integration of drugstore.com – a leading online retailer
we purchased last year, which has performed beyond expectations –
we opened a new 50,000-square-foot e-commerce distribution facility.
We also launched new technologies for customers to interact with Walgreens
through smartphones and apps.
Walgreens can now send a text message to patients when their prescriptions
are due for refill, which patients can complete with a simple “refill” reply
text. Combining the convenience of online shopping with our neighborhood
stores, we expanded Web Pickup™ services at pilot locations, allowing
consumers to shop online at Walgreens.com and pick up orders at their
Walgreens store in as little as an hour.
Going further, customers who check in at any Walgreens store through
Foursquare on their smartphones instantly receive a unique scannable coupon
on their phones that is redeemable in the store, with no texting, reply or
other steps required. Customers can also print photos at any store directly
from their iPhone and Android mobile devices. And to advance our role as a
community healthcare leader, Walgreens can now deliver patient data directly
to primary care providers to improve the coordination of care.
Expanding into new markets, with the Alliance Boots partnership, Walgreens
now has interests in businesses in Europe and across the globe.
Together, Walgreens and Alliance Boots will have unmatched supply chain and
procurement expertise, offering customers innovative solutions and optimal
efficiencies. We’ll have a portfolio of retail and business brands, including
global health and beauty product brands that will be unparalleled in the
industry. This will give us a unique platform for growth and the opportunity
to further develop a diversified and robust profit pool across the U.S., Europe
and key emerging markets.
The partnership also advances Alliance Boots strategies. As Stefano Pessina,
executive chairman of Alliance Boots, said, “This strategic transaction represents
a further vital step in achieving our vision of becoming a global pharmacy-led
healthcare leader. We believe that it will bring clear benefits to all stakeholders,
creating significant and sustainable industrial value through synergies and
the deployment of our joint expertise. The fit is natural; Walgreens consumer
profile in the U.S. is similar to Boots in the U.K. in many ways: a trusted and
much-loved pharmacy brand with a strong heritage.”
In the transaction, Walgreens exchanged $4.0 billion in cash and 83.4 million
shares of stock for a 45 percent equity ownership stake in Alliance Boots,
and will have the option to proceed to a full combination by acquiring
the remaining 55 percent of Alliance Boots within the next three years.
The transaction has been structured to allow synergies to be realized by
the respective management teams working closely together on key projects,
while providing the opportunity to progress to full integration. Both companies
believe this transac
tion structure increases the potential for value creation,
while reducing the initial business disruption and allowing time for
thoughtful integration planning.