Walgreens Loyalty Program Leaving Many Customers Unrewarded, According to New Poll

Posted on by

Survey’s Results Raise Doubts about Balance Rewards’ Impact on Sales;
Gives Insight into Recapture of Express Scripts Customers.

A new nationwide poll of more than 2,000 Walgreens (NYSE, NASDAQ: WAG) shoppers raises concerns about the effectiveness of the company’s Balance Rewards loyalty program in changing consumer behavior.  Despite Balance Rewards’ impressive membership growth since its September 2012 launch, the poll points to problems with the program’s design that may be limiting customer engagement and participation.

Key findings include:

  • No clear impact on changes in spending.  Among regular Walgreens shoppers, Balance Rewards members are no more likely than non-members to say they have increased their spending at Walgreens.
  • Not meeting members’ demands for savings.  Only 16 percent of members believe they have saved a significant amount of money with the program, and three-quarters of members say that the program’s deals do not fit with items they usually buy.
  • Points redemption and accumulation difficult. Twenty-one percent of members report having redeemed Balance Rewards points.  More than two-thirds (69 percent) of members say it is not easy to earn rewards.
  • Balance Rewards points don’t pay off.  Based on customer-reported estimates of membership spending and points accumulation, the average Balance Rewards member is earning less than one cent for every dollar spent at Walgreens after six months of participation in the program—less than half of what CVS ExtraCare reports its members receive.

The poll also found that only 41 percent of customers who moved a prescription from Walgreens in 2012 due to insurance coverage issues say they have moved the prescription back to Walgreens. One analyst estimates that its dispute with pharmacy benefits manager Express Scripts cost Walgreens roughly 77 million prescriptions in 2012.

Continue reading →

Report: Walgreens Out-of-Stock Hurt Consumer Loyalty

Posted on by

Walgreen’s In-Store Failings Threaten Customer Loyalty and Sales, Says New Report

—Study Finds Out-of-Stock Sale Items Persistent in 76% of Walgreens Stores, Mislabeled Promotions Common in 94%—

—Stores Surveyed in Los Angeles, Miami, New York and St. Louis—

New York, May 16, 2013—Walgreen Co.’s (NYSE: WAG) failure to execute the most basic of retail tasks—keeping shelves stocked and correctly labeled—may be undermining efforts to build customer loyalty and raise flagging sales, according to a report issued today by Walgreen Strategy Watch, a corporate transparency initiative of Change to Win.  The report, titled Off Balance: Out of Stock and Mislabeled Sale Items at Walgreens, details how widespread inventory and promotional problems at the nation’s largest chain drugstore may threaten its loyalty program Balance Rewards.

During March and April, researchers made three trips to 200 stores for a total of 600 visits in some of the company’s largest markets: Los Angeles, Miami, New York and St. Louis. Key findings of the report, available for download at www.WalgreenStrategyWatch.org, are:

  • Out-of-stock problems persistent at more than three-quarters of stores.  Seventy-six (76) percent of stores had out-of-stock sale inventory during every survey visit.
  • Items were consistently out of stock in multiple markets.  For example, a store-brand feminine hygiene product was out of stock during 73 percent of visits across all markets. 
  • Mislabeled sale items common in nearly every store.  Ninety-four (94) percent of stores had at least one discounted item not marked as on sale during multiple survey visits, and 50 percent of surveyed locations had three or more items that were not labeled as on sale during each visit.

Continue reading →