Walgreens will strengthen its multichannel presence with this purchase and gets immediate access to more than 3 millions Drugstore.com customers. It will also block other customers like Rite Aid which has had a partnership with Drugstore.com for many years now.

Walgreens to buy Drugstore.com

One of the biggest names in the online retail category for prescription drugs and health and beauty supplies is being acquired by one of nation’s largest drugstore chains.

This morning Walgreen Co., No. 68 in the Internet Retailer Top 500 Guide, announced plans to buy Drugstore.com, No. 46, in a deal valued at $429 million. Under the terms of the deal, Walgreens will pay $3.80 per share for Drugstore.com’s common stock. Walgreens expects the deal to close by the end of June.

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“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,” says Walgreens CEO Greg Wasson. “This acquisition offers a unique opportunity that will provide us immediate access to more than 3 million savvy, online loyal customers, and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering.”

When something is as fun and easy as scanning a barcode and getting your medicines ordered, people will use it. Walgreens seems to be recognizing just that.

Walgreens: Mobile is key component of multichannel loyalty strategy

Walgreens is seeing much success in using mobile as a means of driving loyalty among its customers by providing choice, control and convenience via the channel.

In fact, Walgreens found that an astounding number of consumers are accessing its mobile application and more than half of prescription refills being done via mobile are being done through the scan feature. Additionally, the company said that the number of prescription text alert subscribers has surpassed one million.

“Mobile is a key component in our multichannel strategy, which is helping to create more loyal customers,” said Jim Cohn, spokesman for Walgreens, Deerfield, IL. “People want choice, control and convenience – and mobile is one of the channels through which we’re offering customers more reasons to come to us.

“We’ve gotten significant traction with our mobile applications, which really are like having a drugstore in the palm of your hands,” he said. “More people are using our refill scan technology because it adds another level of convenience and it’s time-saving technology our customers truly value.

WSJ.com is reporting that Wal-Mart is offering businesses low-priced drugs if they sign up to buy directly from Wal-Mart's network of in-store pharmacies, rather than contracting to buy drugs through third parties known as pharmacy-benefit managers. This will heat up competition for other Pharmacies and Retailers by increasing footfall to Wal-Mart stores. And you all know what happens when you visit a store like Wal-Mart, you tend to buy lot more than what you go in for.

Apparently the Pilot companies have already seen benefit from buying directly from Wal-Mart.

Wal-Mart began a trial of its program in September with heavy-equipment maker Caterpillar Co., which provides prescription coverage for 70,000 employees and their dependents. Wal-Mart negotiated a fixed markup over its cost for the drugs it sells to Caterpillar's employees under the heavy-equipment maker's in-house insurance. Though Wal-Mart doesn't reveal the costs to Caterpillar, they are verified by a third party. The markup guarantees a profit for Wal-Mart, while reducing the cost to Caterpillar.Todd Bisping, who manages Caterpillar's drug-benefits program, said the company was able to reduce its drug costs enough that it waived copayments on generic prescriptions bought from Wal-Mart.