Daily Insights

Are Retailers the New Media Mavens?

By: Mackenzie Baker | Dec 14, 2020

Walgreens moves from medicine to media with the launch of Walgreens Advertising Group (WAG), its own retail media network. The announcement arrives five months after top competitor CVS launched CVS Media Exchange, its own entertainment company dedicated to CPG marketing. The two new media outlets show how traditional brick and mortar brands are adapting to e-commerce spending amid increased demand for entertainment from consumers.

With mobile marketing and online shopping growing in popularity during the Coronavirus pandemic, shifting to digital marketing methods could help brands like Walgreens expand their reach and appeal to younger, digitally savvy consumers. Walgreens will use consumer data and insights to appeal to advertisers, who could market certain products like CPG or food items to certain target audiences. The retailer is already working with 30 brands that currently sell products in its stores to roll out its initial entertainment offerings, including through videos and digital ads on Facebook, Pinterest, and Google. WAG media will also run on Walgreens website and throughout TV’s in its 9,000 brick and mortar stores. Additionally, Walgreens’ recently revamped MyWalgreens loyalty program will serve as an advertising station and produce much of the data the retailer will use to target specific ads to consumers.

Walgreens joins several retailers with their own media networks, including Target and Home Depot. The growing number of brick and mortar-turned media brands could be the result of both increased data accumulation by brands and growing demand from consumers for relatable brand content, according to a Gartner report. With young consumers in particular driving demand for digital entertainment, shifting into media could help atypical brands and industries reach them where they are spending the most time. The media-focused approach could help Walgreens maintain engagement gained early on during the Coronavirus pandemic, which helped it earn a 2% increase in annual sales for 2020. With Walgreens sales predicted to continue growing well into 2021, expanding its media presence could help it sustain sales and introduce an additional revenue stream. WAG could also bring more brands to Walgreens both in-store and online as businesses look to tap into additional consumer markets. 

With Amazon entering the pharmacy industry and CVS moving into media, it makes sense that Walgreens would broaden its offerings as well. With Walgreens Advertising Group, the pharmaceutical retailer could reach more consumers outside its stores and set the stage for future media modernizations.