Walgreens stores partner with Kroger to include grocery offerings
By Tracy Allen, One Door Contributor and Scott Heyer, Product Marketing Manager at One Door | June 24, 2020 | Blog

For Part IV of our discussion, “Putting the ‘Visual’ Back in Visual Merchandising,” we are chatting with Tracy Allen. Tracy is the Sr. Director of Space Management for Walgreens where she heads up a team of 80+ people in the space planning department. Her commitment to serving customers is palpable. It’s the lens through which she sees her work, whether it’s getting the right product on the shelf or creating convenience in their daily lives. It’s also the guiding principle that drives her to constantly adapt and find new ways of applying tech solutions to space planning processes. That desire to help customers took root as a teenager when she got her first retail job working at Musicland and later at a flower shop. She holds a B.S. from Western Illinois University.

Here, Tracy shares her perspective on how the COVID-19 crisis has impacted Walgreens, the biggest changes ahead for retailers, and her passion for technology.

Q: How did you get your start in store planning?

I sort of stumbled upon space management. I was new out of college with a degree in business, and I didn’t really know what I wanted. A friend who worked at Walgreens said it was a great company and suggested I apply. I started as an admin, but after nine months, my boss encouraged me to apply for one of the planogram positions. It was a learn-as-you-go environment. I asked a ton of questions and was fortunate to be mentored by amazing category managers who had been in the industry for a long time. From there, I fell in love with space in general, and have been in space management ever since.

Q: What excites you the most about the retail industry?

It’s constantly changing. Just when you think you have it figured it out, it shifts. That’s never been truer than now. I’m a person who loves change, and I think that’s been important in leading my team through the transitions we inevitably encounter. It’s funny because I’ve been at the same company and the same career for 15 years, but what we do day in and day out is never static. We’re always asking ourselves, “Is there a better way? Can we do something differently?” We’re constantly pushing to understand if there’s a more efficient way to leverage customer data through new technology.

Q: How do you determine the right assortment mix for each store?

It’s not an easy problem to solve. We’re lucky to have millions of loyal customers so we have data on the way they’re shopping and on what they’re buying. There are so many points of data to absorb in order to make sure we’re responding to what the customer is telling us. The Insights Team partners with us on assortments to help ensure we’re all leveraging this valuable data.

Another element of it is space management. We consistently have to make decisions within every single planogram, and there are thousands of planograms. Automation is the way forward. One of the things I’m most excited about is the implementation of Planogram Generator. Although the implementation isn’t complete yet, what it means for my team is that a lot of the manual work we stress about in drawing the planograms will be eliminated through this technology.

Q: How do you adapt to the latest customer preferences based on when something starts trending on platforms like Instagram?

If we want to stay relevant, we have to recognize the trends and social media is absolutely part of it. At our stores, we have some categories and promotional space like “As seen on TV” to keep up with what people are gravitating toward.

But, for us, the trend is convenience. Making the trip to the store as convenient as possible for our customers has always been a priority, but it is even more so in the COVID world, whether that’s through our website or our stores. We’re more focused on that than what’s trending from a product standpoint, but I think there’s room for both.

Q: Let’s talk about COVID-19. Do you see permanent changes coming to Walgreens as a result of the crisis?

Right now, it’s about meeting our customers’ immediate needs. We’re making quick updates like stocking masks, hand sanitizer and immunity-boosting vitamin products and making sure those products are on the shelf. But we have some learning to do before we commit to permanent changes, and I’m not confident we know enough at the moment. We don’t want to have a knee-jerk reaction and find that in a year from now, we invested in big changes that should have been temporary. We also don’t want to disrupt our customers any more than they’ve already been impacted.

Q: What has been the most dramatic change you’ve seen in store planning over the past three to five years?

For my space team, the partnerships Walgreens has started to build with companies like Kroger has made us think about space in dramatically new and creative ways. We now have Kroger Express in select Walgreens stores, and curated assortments of Walgreens’ health and beauty products in Kroger stores. It’s been an extremely positive experience for the customer. But from a planning perspective, when another retailer comes into your space, it greatly affects how you draw that space day to day.

And it’s not just Kroger. We’ve also added primary care and space for FedEx packages in some Walgreens. All these elements disrupt how you configure the store. Where do you plan that space? How can you make sure the packages and the customers are safe? We never had to worry about those things in the past.

Q: What do you see as the top trends that will shape brick and mortar in the near future?

We talk about omnichannel all the time and that’s still huge. The way the customer wants to get their products changes from day to day and we have to be ready for that. COVID-19 plays into it as well. Conveniences like being able to order front-end products and pick them up when you go to the drive-thru for your prescription is something the customer expects now that they’re used to it.

One of the big strategies for us is to become a more digital-first company and COVID has ushered that along faster than it would have been done otherwise. Our website and our app are the first places customers go now for their shopping experience. That’s a behavior that will continue after we reach the new normal. We need to be ready and plan on it in the future.

Q: What technology do you believe will have the biggest impact on the retail industry in the next 12-24 months?

The biggest change will be AI and machine learning because we’re going to have to be able assess demand forecasting quickly in terms of what the customer wants, what their priorities are and what they expect from us. I think the only way to do that is through some sort of automation. Being able to analyze our data quickly will be essential to understand what’s changing and where we need to adapt.

We would not be where we are now if we did not constantly update, evolve and implement new technology. From my perspective, we’re always pushing the need for technology and justifying the investment. If anything, we’re going to put our foot on the gas even more.

Q: Do you have any advice for store planners on how to stay relevant?

Keep educating yourself, whether that’s visiting retailers that you think are doing a great job or reading articles about new technology. Inevitably, you must be comfortable with data – a lot of data! Analytics is the way forward.

You also have to push yourself to be skilled in the tools and technology that are needed. For example, we have an Innovation Center where we physically set our stores. Because we’re not able to access it in person right now, we’ve had to rely solely on technology to do virtual walk-throughs of the store. I’ve been surprised by how seamlessly we’ve switched to a virtual world. It’s amazing what you can accomplish when there’s an urgency behind it.

To continue the conversation in the coming months, we’ll continue to talk to seasoned visual merchandisers and space planners about the biggest issues they encounter in the field today and the role technology plays in the future of merchandising and space planning.