When Walgreens uses digital mapping, Rx marks the spot

The Walgreens pharmacy chain uses a geographic information system and demographic data to decide where to open new drugstores.

When Jillian Elder needs to build a business case to boost her location-based business intelligence program at Walgreens, she knows the winning trigger: demonstrating that the investment will lead to one additional store, or one better-performing store, in the coming year.

It's her team's ability to identify where that investment should be made--and the added revenue it could deliver--that clinches the argument. Determining the best location for a new Walgreens drugstore requires analyzing the demographics of various neighborhoods, scouting the local competition and checking on the local labor pool (notably, qualified pharmacists). Improving the results of an existing outlet could involve updating population studies and sales reports to suggest changes in product selection or presentation, such as printing prescription bottle labels in different languages.

"Location is a big part of our business strategy, and we can enable that," says Elder, whose title is director of enterprise location intelligence. She and her four-member team (which has a dotted-line connection to the IT department) sit in the strategy group of the company's U.S. retail pharmacy business unit; their job is to grow the 8,200-store chain.

Since joining Walgreens in 1999, Elder has seen her work evolve from producing paper maps about customer trips to managing WalMap, a geographic information system that now serves several hundred business users. WalMap delivers analysis to users in views based on their job function.

Here are some examples of how WalMap enables Walgreens business people to be more productive:

  • The mergers and acquisitions team can assess potential pharmacy purchases based on the strength of their existing market position.
  • Recruiters can identify licensed pharmacists who live within driving distance of new stores.
  • Marketers can study sales data to identify where to mail circular ads based on when customers have visited, or how close they live to a competitor.
  • Field staff can use a tablet version to analyze store performance and annotate maps with updates about neighborhood changes and competitors.

Data-driven applications like these are reshaping retail and enabling more personalization, says analyst Doug Stephens, founder of Retail Prophet. "That starts with the understanding that the U.S. is not one market--it's comprised of thousands upon thousands of much smaller markets," he says. "For decades, we never had the technology at hand to segment markets in that way, and now we do."

The WalMap system, built on Esri's ArcGIS tool and software from Latitude Geographics, incorporates both internal data and external information like demographic statistics and syndicated healthcare data, Elder says. The applications can show sections of the country down to block levels, or about 400 households, to calculate metrics such as the prescription medication market share in a given area.

For Elder's team, the challenges include matching that data to locations and meshing with users' business processes. But the visual appeal of maps keeps users coming back. "WalMap has certainly helped get executive buy-in," she says. "Everybody likes maps. They start interacting with the data they are familiar with and they see it in a whole other way. It opens their eyes."

Michael S. Goldberg is a freelance writer based in Massachusetts.

This story, "When Walgreens uses digital mapping, Rx marks the spot" was originally published by CIO.