Walgreens Shifts eCommerce Fulfillment From Warehouses to Retail Stores

Walgreens is taking a new approach to online delivery by utilizing its network of physical stores. 

The pharmacy giant recently closed a warehouse dedicated to eCommerce orders, signaling its commitment to using its 8,700 stores as both retail outlets and fulfillment centers, The Wall Street Journal (WSJ) reported Tuesday (Nov. 14). 

By having store employees pick and pack items for same-day delivery through third-party apps like DoorDash and Uber Eats, Walgreens aims to increase the speed of online consumer order fulfillments and boost sales, according to the report. 

This strategy, which excludes the company’s pharmacy operations, aims to streamline the handling of online orders by consolidating the management of goods into a single system, the report said. 

This eliminates the need for separate distribution networks for eCommerce and in-store sales, per the report. With 78% of Americans living within 5 miles of a Walgreens store, the company is capitalizing on the proximity of its stores to customers. 

Walgreens is following the lead of other retailers like Target, Walmart and CVS Health, which have also started fulfilling more online orders from their stores, according to the report. 

In the quarter ending on Aug. 31, Walgreens’ comparable retail sales, excluding pharmacy, fell by 3.3% compared to the previous year, the report said. However, the company experienced a 14.2% increase in online orders for retail goods during the same period. 

To provide customers with faster delivery options, Walgreens encourages same-day delivery when items are in stock nearby, per the report. Customers who choose no-rush shipping during online checkout are given the option to have their items delivered earlier, if possible. These orders are fulfilled by local store employees and delivered by DoorDash or Uber Eats. 

In addition to its own website and app, Walgreens also collaborates with delivery apps like DoorDash, Uber Eats, Instacart and Target-owned Shipt, according to the report. When customers place orders through these apps, the orders are fulfilled and delivered by couriers working for the respective service. 

Quick delivery can attract more shoppers and improve inventory management by delivering goods closer to the point of purchase, Rajnish Kapur, Walgreens’ chief sourcing and supply chain officer, said in the report. 

PYMNTS Intelligence has found that about one in three consumers have made a purchase from a same-day delivery website such as Shipt. Despite belt-tightening, consumers still look for ways to get their last-minute needs met on demand, according to “The ConnectedEconomy™ Monthly Report: The Rise of the Smart Home.” 

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