Walgreens Enters Delivery Wars as Shipt and Gopuff Stumble

Walgreens enters a tough market: Recent years have seen massive growth in delivery services as people look to get whatever they want, whenever they want. However, with a flooded market, many have tried and failed to secure a position, especially when it comes to ambitious instant delivery companies. Now Walgreens is throwing its name into the ring, offering something unique in the space.

Delivery at any time: There are multiple types of delivery services. Services like Shipt and Instacart pick up items during a store’s operating hours and deliver them within a certain window of time on the same day. Others, such as Gopuff, opened warehouses in an attempt to deliver items even faster in a certain area. Walgreens is taking it one step further, removing the limitation of store hours with a 24/7 delivery service.

• The service launched across the country, minus a few states, and is currently available at nearly 400 24-hour Walgreens stores.
• The items delivered include groceries, over-the-counter medication, personal care items, and household essentials, among other items.
• Orders can be placed on Walgreens’ website or through its app, with the catalog including over 27,000 items.
• While there are some restrictions in place, the goal is to deliver the items ordered in less than an hour.

Walgreens has a major advantage. Primarily, the pharmacy chain already has the infrastructure in place. One of the major problems faced by companies like Gopuff, which recently laid off employees, is the need for warehouses. Food is perishable, and warehouses cost money, especially in areas that would make delivery profitable.

Walgreens does not have to worry about the warehouse problem since the stores are already operating and holding inventory. Moreover, they are open to walk-in customers as well, meaning they will move products easier and not have to worry as much about consistent business or perishable items going bad and costing them money.

Walgreens is the first of its kind. Another point that makes Walgreens stand out from the crowd, aside from offering true 24/7 delivery, is that it is the first health and wellness retailer to attempt this service. Moreover, it is offering a massive selection for anytime-delivery.

When someone needs health or wellness items, it is often the time they least want to go out because they are feeling unwell. To that point, the group vice president of digital commerce at Walgreens, Stefanie Kruse, said that Walgreens is looking for ways to improve the customer experience since “Taking care of health and well-being isn’t exclusive to business hours and needs can pop up at any time of day.”

There are limitations, though. While Walgreens is offering 24/7 delivery and fast delivery times, the initial announcement came with some asterisks. For instance, one-hour delivery is only available between 9 am and 10 pm when customers order more than $35 in items. And that is before taxes and after promotions.

• Walgreens also covered its bases by announcing that the one-hour delivery depended on weather, holidays, delivery address, and other constraints.
• The service does not cover prescriptions, but Walgreens does have a separate same-day delivery service for that.
• Hours and cutoff times vary by store, and courier availability will be something to consider. That is especially so since Walgreens plans on using DoorDash and other services to deliver items.
• Another limitation is the delivery of alcohol, which is not allowed outside of some stores in Illinois and Florida.

What are people willing to pay for? The question is key in today’s market. During the pandemic, the answer was: everything. However, that has changed, with people more than willing to go get things themselves. That hurt profitability for delivery companies that quickly expanded when there was higher demand, a problem faced by Gopuff. Whether the health and wellness part of the formula will make Walgreens an exception is yet to be seen.