Digital Customer Experience with CTO of Walgreens Boots Alliance - CXOTalk #743
Our company mission is to help people live healthier and happier lives. We live that purpose every day in our stores and our communities. I'm proud of the company, in the rich history but also where we're going. I'm excited
on the technology journey we're on. That's Mike Maresca, Global Chief Technology Officer of Walgreens Boots Alliance. You have about $135 billion in revenue and 315,000 employees. The scale is amazing at times and daunting at others. We're one of the world's largest retail pharmacy healthcare destinations. We have more than 450,000 team members globally. We operate in 25 countries.
We're embedded in our communities. We have over 13,000 stores. We have approximately 9 million store visits, online interactions with our customers, 100 million loyalty program members, over 1.5 billion prescriptions every year and, increasingly, critical health services. It's a great company. It's having a great impact across the globe. Mike, when we talk about digital customer experience, it's an important part of your remit and what you think about as CTO. Can you give us an overview of what that means in the context of Walgreens Boots Alliance? To me, experience is about having an impact with your customers, where they're at, how they interact with you. I'm sure you remember a visit
to the store where a team member greeted you when you walked in, took time to understand your needs, navigated you through the entire experience, and perhaps even followed up with you after the sale to see if there was anything more they can do. One fun fact I remember – and it gets back to that experience – Charles Walgreen, the founder of the Walgreens business, used to greet every customer that walked through the pharmacy. It's that experience that we're trying to recreate every day. Last October, our CEO, Roz Brewer, reminded us to be customer-obsessed. That is certainly true in
our stores, certainly with some of the investments we're making in some of the digital services, and how we're personalizing that experience for our customers. We're really excited about the momentum we have. When you put the customer at the center, you usually get this right. I think we're doing a lot of good things today for our customers and our patients. We have a question relating to this
(from a technical standpoint) from Wayne Anderson on Twitter who asks, "How does the approach to design and architecture change in a digital journey that we haven't seen before?" First and foremost, we couldn't do what we do today without leveraging the power of the cloud. That's important. We've made massive investments in the cloud. It's given us the ability to drive new capabilities at scale. For example, digital capabilities around patient advisory, telehealth services, last-mile partnership with Uber, reimagining our program, and our myWalgreens. We couldn't do this without the power of the cloud. Then from there, we've evolved how we deliver our IT. The cloud is our foundation. I'm most
excited about how we're delivering on cloud. We've significantly decreased our time to market through agile and project-centric delivery. We're thinking about capabilities of products that evolve with our customer needs and part of our customer journeys. With that mindset change, it's allowing us to rethink how we plan and deliver our work.
Our success is improving every day. We've got new capabilities that we deliver in weeks, not months. It translates to a more responsive customer experience. We've launched things like drive-thru shopping for essential health items. We've scaled our e-commerce platform to meet unprecedented spikes in demand.
Some of those spikes in demand were like around testing services that we saw around the holidays. It's been fantastic, built on a new foundation in the cloud, but also evolving the way we deliver the IT. It sounds like an important part of the experience that you're creating is to be very flexible and be able to respond to customers, the evolving expectations, the evolving behaviors of customers. That's correct. We've seen our business grow. When the pandemic hit,
the way that we interacted with our customers, the services they required changed dramatically. We had to adjust the way we deliver IT, the foundations we deliver IT on, and really keep up with the evolving speed of our business. It's been an amazing journey. I'm so proud of our IT team and our business team for helping us navigate that journey. Over the last two years that I've been here, we've made some great progress along that line. When you think about the components of creating a great experience, what does that mean? Along the way, it's a little bit surprising to me that, as the CTO, you're thinking about this because we usually think of technology and experience as being distinct. It is a challenge. Trying to modernize the organization certainly has been a challenge.
The way that we deliver the products, the technology foundations but, importantly, finding that intersection of our business needs and our technology platforms and foundation has been critical. We're making massive investments in that space. We're modernizing our technology in cloud data – you've heard about that or you will hear about that, our ambitions – through some of our strategic partnerships that are out there in the ecosystem. Just to name a few: • Microsoft, we're leveraging Microsoft, all they have to offer in the cloud and also their analytics. • Adobe, we've partnered with them to create a world-class marketing and customer data platform.
• Snowflake is our cloud data warehouse. • Verizon and British Technology, British Telecom are helping us transform our network services. We were the first 5G-powered pharmacy in the world, so it is staying connected with our business, connected, putting the customer at the center, but also making the right investments at the right time to power those journeys. It's been a great last two years, and I think WBA has
made some significant progress in driving that experience for our patients and our customers. Could you define what are the aspects or the components that make a great experience? What are the reference points that you're using as you're planning all of these pieces? I think there is a trend there, and then there was a call to action. Prior to the pandemic, consumers were really defining the value and redefining value and convenience, evolving the way they shopped, adopting the new technologies. In order to meet their changing needs, we had to accelerate our efforts to modernize and transform our business. We did that with extreme care. I just shared with you some of our
business metrics. We were kind of trying to change the wheels on the car while you're driving it. COVID came along and added some urgency to that challenge. Some of the things that we already had planned, we accelerated. A lot of that was putting the right technologies in place, but also delivering some new services that were needed at that time, which evolved throughout the pandemic. It was bringing a lot of those services online
instead of just in the stores because that's where our customers wanted to get this point of service. We were actively making technology investments globally to modernize our pharmacy, our retail, our healthcare infrastructure to offer those products and services delivered when, where, and how our customers prefer it. Of course, when you put the customer at the center, you succeed. I think we've developed a great customer experience that we continue to evolve because our customer needs evolve. We have another question from Twitter,
again from Wayne Anderson. Wayne is on a roll, and he's a regular listener. I thank Wayne. Wayne works for Microsoft, and he says, "How do you measure success in the digital transformation of customer experience?" In other words, he says, "How do you know you're making the right moves?" It's a really, really good question. I think there's speed in terms of being able to react and anticipate customer needs. I also
think there are the traditional measures of NPS, and what are the customers saying about the experience that we're delivering through our digital platforms but also through our stores. I think speed, innovation, having the right technology foundation and talent to deliver against that, and just being obsessed with your customers, working with your business partners, is the key to success. You're chief technology officer, so how do you intersect with these customer expectations and with the business needs, because obviously, you're thinking about things much more broadly than just the technology infrastructure alone? There's no technology for technology's sake. It's, how does our technology drive our business agenda? I've been working across our executive team to understand where we're taking our business strategy, understanding our customer feedback, and making targeted investments with our leadership team in the right areas to help drive that business strategy forward. One such example is, in October, we announced that we're going to start moving forward with healthcare, healthcare services, and personalized healthcare services through a series of strategic partnerships: VillageMD, CareCentrix, et cetera. It's working closely with our executive team,
understanding our business strategy, and making the right targeted IT and technology investments to support that business strategy. We have another question from Twitter. This one is from E.G. Nadhan. He says, "How do you measure the return on technology investments that are targeted to innovating around customer experience?" There are a couple of good examples of that. Not all of them are easy [laughter], so it's hard to necessarily measure, for instance, cost to fill or, I'm sorry, cost of services and any efficiencies you can drive through that. A lot of it is, for instance on NPS, the customer experience. Also, new capabilities,
so vaccine services, which previously we expanded our offering there throughout the pandemic. We're able to measure in terms of the impact on our patients, but also the impact on our business. We had to make some technology investments to support those capabilities, so that's just one of the ways and one example, recently what we've done. We made some targeted investments in AI as well, which help us manage inventory, which has allowed us to increase customer service as well as manage our inventory and our costs. We're really excited about that. That's an example of AI at scale within WBA that is really having an impact on our ability to operate better. Not everything is seen by the customer. Some of it is felt by the customer when they see
that we're able to streamline our services, offer them at a competitive price, and drive a better experience. As you are thinking about planning technology investments, it's obvious that you're thinking about the cost of hardware, software, bandwidth. How do you factor in this whole customer experience aspect, which is kind of intangible? I'm just building on the question from E.G. Nadhan. For instance, we just made some investments in our network infrastructure. We wanted to bring a truly omnichannel experience, a more immersive set of capabilities in our stores, and this is just one example where we had to improve the network. Increasingly, we see more of our applications supported through cloud, more data-intensive applications, and we wanted to bring those (at the edge) to our stores.
We made an investment with Verizon (here in the U.S.) and with British Telecom (in Boots) to modernize our technology network because we anticipated these needs, and we believe that it was going to support our future ambitions. Many times, you have to get ahead of that, anticipate where our business strategy is taking it, and certainly the way we will deliver IT in the future, and that was just one example of where we anticipated and made the right investments. We're in the process of modernizing our network. It sounds like you're also thinking about the role of IT in this experience domain, where does IT and technology fit in order to support that, which is kind of different than historically the CIO role was.
IT is an enabler, even a disruptor in some of these areas, the ability to change the experience. Customer trends, our customers are increasingly embracing technology, the convenience that technology brings, and we need to bring that technology into that customer experience if we're going to have the impact we want. You're doing all of this at such an enormous scale, and so how, again, do you think about this from just managing the scale aspect of it? The things that keep me up at night are, first, the talent. I'm sure most of your guests talk about the talent. I'll state one thing.
I often hear this stat that, with the speed of technology evolution, the technology skills get refreshed approximately every 3.5 to 4 years. So, we made some massive investments in our team in order to drive the technology forward. We're modernizing our technology. I've talked to you about some of the strategic partnerships we have, but also the investments in cloud, but also data and analytics, so that we can start driving a more personalized experience.
Then, of course, innovation. I'm sure this keeps most business leaders up at night: How do we continue to invest in the right time and the right technology to support our business? This is about finding that intersection of business and IT and anticipating our business needs. It's true in a health service area, which I mentioned before. We were just recently named by Fast Company (Walgreens in 2022) as the number one most innovative company in the health category. We're very proud of that. It certainly inspired us to continue to drive on the strategy that we're in. They were citing our strategy to transform local pharmacies into more personalized healthcare destinations. I think that is an ambitious goal and we're driving and accelerating towards it. I'm going to pop back to Twitter for some more
questions. You can see I really prioritize the questions that come from the audience. The audience asks such great questions. You guys are awesome. This is from M. Ahmad Shahzad. He says, "How do you see hyper-personalization impacting the in-store experience, especially when Walgreens looks at pharmacy and non-pharmacy interactions?" He's asking about the complexity of hyper-personalization and data and how do you manage that. As you digitize more of your business, those digitized processes put in an enormous amount of data. I think the data or the digital exhaust that you see, we can leverage to create experiences, better shopping experience, even better business outcomes as we run a global company. But getting back to the customer,
we leverage that data to connect across our three offerings: retail pharmacy as well as healthcare, but also across an omnichannel experience. Just recently, we introduced health into our myWalgreens, our loyalty application or program. We're starting to use the data to drive an experience across our channels, but also across our offerings, and putting the customer at the center of that. This is from Arsalan Khan, who is another regular listener who asks amazing questions. He says, "What are the boundaries of customer experience? Is it limited to only what your organization can do or do you collaborate with other companies to improve the overall customer experience?" He's really asking about the nature of partnerships.
We partner with certain companies around telehealth. We have a partnership with Uber to deliver the last mile. We have partnerships with VillageMD (which is allowing us to create provider clinical services in our stores), CareCentrix, and Labcorp.
It's starting to build out that health offering, so those partnerships are very core, as well as blending them with the capabilities that we have within Walgreens and across Boots. Those partnerships are important for us to deliver end-to-end care, both from a retail pharmacy but also healthcare perspective to our customers. It sounds like an important part of this customer experience mandate is the end-to-end aspect of it.
It is. We get back to some of the technology enablers to that. Cloud helps us move and evolve our capabilities at speed. Data help us stitch together those experiences, so increasingly it's a connected experience and something that's deeply personal. Those are all important, but it's that end-to-end. Getting back to our mission statement, which is
really about driving healthier and happier lives, it's something we cling to and we hold very dear. That is treating the patients and the customers with that end-to-end health journey. Again from E.G. Nadhan who says, "What steps are WBA taking to make it a "frictionless" customer experience, and what is the role of technology in these initiatives?" We've got contactless payment. We've accelerated, and we've introduced new capabilities, new delivery options, a loyalty program that connects the services across all our offerings, the last mile partnerships, which I mentioned. That is part of a set of capabilities that are driving a frictionless, touchless experience that increasingly become more important over the last few years. Technology is really driving that. I get back to cloud. We couldn't do or innovate with what we do and deliver these digital
experiences without the power of the cloud. It gives us the resilience but also the scale. We've seen advances recently. We are now a retail best, click to curb, curbside pickup in 30 minutes. We've got new immunization and diagnostic services, COVID testing and vaccination. We have AI chat capabilities that allow us to be very responsive to
the customer even when a team member is not available. And we have a set of connected health services that you can find through Walgreens Find Care or over in Boots, our health hub. We're bringing that type of capability in a seamless, frictionless, touchless way to our customers and patients. We're real excited about it. We're having some very
good impact on the experience that our patients and our customers want. You said that data – I'm paraphrasing – is the glue that helps stitch all of this together. It really is. I get back, as you digitize more of your business, there's a lot of data. It's digital exhaust. It is helping drive compelling customer experiences, shopping preferences, product suggestions, care gap closer, even service recommendations.
We are trying to personalize how we use that data, but also being careful. With this comes great responsibility, and I think we're an industry best in terms of protecting the privacy of our patient data that they entrust with us but using it to the point where we can (with consent) drive that experience. Ultimately, it is the experience that you get while you're in the store (as part of that journey) but also, we're trying to use mass personalization, in a way. We're going to move away from a mass advertiser to truly a one-to-one marketer.
We're using the Adobe platform to tailor those experiences, to scale every one of our millions of customers and really meet them and provide them, use their customer preferences and shopping preferences, and really kind of drive that next level of engagement with them. It's invigorating, the innovation, in terms of how we're engaging our customers. In terms of how we personalize that experience has been invigorating. Arsalan Khan comes back again with another question responding to the point you were just making about collecting data. He asks this. "When you're collecting data, how do you decide when too much data has been collected?" I'm going to paraphrase that and basically say, how do you know what data to collect, how much data to collect, and then overlay the privacy aspect? There's a business dimension and then there's, of course, the privacy aspect.
We constantly look at the data that we collect, and we handle it with great care. Again, putting the patient at the center, how can we use the data to personalize our products and services? We approach that obligation. We have embedded privacy policies. We mandate associate training and compliance reviews of how we use it. I think that was part of the question is how do we know when we've collected too much data. Well, we let the experience guide the data that we collect.
Certainly, with part of our business, we have to collect the data to provide the care. But we have a global privacy program and a privacy team in place that advises us and guides us on what data to collect and what data not to collect. Of course, we follow applicable laws and the privacy policies according to the countries and the states that we operate in. I think we're best in class in this area, and it's something that we put number one in terms of how we design our systems and the experiences for our patients. How about just from a non-privacy perspective? How do you figure out what data you should be gathering from a utility standpoint? You can gather all the data in the world, but that doesn't mean that it's all going to be useful. Then it just
consumes resources and time in dealing with it. How do we drive the process, and how are we enhancing the experience? If you tie it back to that, that's how you design your data collection practices. Of course, tying back to making sure you're compliant with the laws and privacy policies that we hold so dear. That's how I'd answer that question. It's,
how does it drive the process going forward for the patient or the customer. Then, second, is there an opportunity to enhance the experience? That really guides us. Let's pop over to LinkedIn. There is a question from Melissa Cashdollar. She is a client director at Gartner. She asks, "What innovations are you most excited to see that will drive customer
impact over the next one to three years?" I'm very excited about our investment in our network. We were the first 5G-powered pharmacy in the world, and it was right here in Chicago that we opened that up just a little less than a year ago. We believe that's going to open up immense opportunities in our stores to drive that next-level experience, next level of capability. Certainly, as we deliver capability at the edge, that network platform is going to help us tremendously, so we're really excited about that. I think some of the work that we're doing in cloud is exciting as well. That is the foundation that powers our ability to be increasingly agile for our business. Increasingly, we are competing with
big tech, and being able to embrace the power of the cloud in order to innovate, innovate with new capabilities, but also have the safety net of resiliency that you get with the cloud is important for us. I think some of the work that we're doing in analytics, and this is using machine learning, AI to anticipate customer needs to embrace them through AI chat (as an example), answer questions, and guide the customer experience is one. Also, some of the things that we're doing there to reduce our costs and streamline our operations ultimately come back to the customer. We've been able to deploy certain capabilities that help us
increase our customer service through the right-sizing of our inventory in our stores, and we've done that all through data and AI. There are some exciting things here. I don't know if I can name one. I probably just named three, and I probably could keep going, but those are some of the exciting things that are happening at WBA today.
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Now, Wayne Anderson says, "Change keeps accelerating. How do we build in flexibility and resilience to keep change from breaking the people, the mechanics, the processes of the business? And how do you as CTO help build the business relationships to help solve all of this for speed?" I think that's really what he's getting at is the non-technology aspects of your role in terms of connecting the pieces and ensuring that it all works for the organization. I think that relationship between technology and business is so critical. Being able to speak the language of the business, break down technology, kind of complex technology problems, investments, new ways of thinking is critically important in terms of being able to connect with the business and explain what are the next steps to how we become a digital-first business. On top of that relationship, that awareness, and building that awareness with the business is changes in the way we think. One thing that we did—and I'll use an example over in the digital space, so how we deliver capabilities like myWalgreens, for example—is start to think of things as a product, a product that evolves with customer needs and working with the business to consider feature functions but also additional products that make up those compelling customer experiences.
That's a huge mind shift change, and that was one where we had a dedicated product team, but also a dedicated engineering team, so that the product could work with the business on the experience. Then we retooled our engineering team so that we could deliver against that agenda. I'm very proud of the progress we're making. If you looked at how we've evolved our digital platforms over the last two years, there's been a lot of products. I can go through all the different services that we had released as part of our response to the pandemic and the changing needs, really a lot of the trends that were just accelerated through the pandemic. We had to modernize the platform, rethink how we consider products in the context of a digital experience, and then drive a new in terms of how we engineered towards those on the cloud but with the resiliency and speed that we're now delivering in weeks, not months.
I'm very proud of that evolution, which continues today, that product thinking, agile mindset with a higher level of engineering in cloud. Here is a question, again back from E.G. Nadhan for his third time, but he asks great questions. He says, "Healthcare and wellbeing apply to customers across all age groups. What is the role of technology in tailoring the customer experience to different age groups – kids, teenagers, adults, all the way up to senior citizens?" He's really talking about that mass personalization that you mentioned earlier, I think. There are certainly various needs across our customers, essentially our patient base.
The investments we made in our personalization engines – whether it be the care itself, the education that we provide, how we've constructed and integrated our loyalty program with healthcare loyalty program – have been tailored such that it does meet the individual needs of those customer segments. I have an amazing clinical team. Not me, but I partner with an amazing clinical team and healthcare services team that is able to tailor those services, define those programs. Increasingly, the platforms that we have, the personalization engine, the personalization platform that we have, the new products that we're introducing (which are tailored towards those set of experiences) are increasingly meeting the needs of our patients regardless of demographics or age group. You mentioned earlier, Mike, about the importance of talent. And so, can you talk about
that as well (in this overall equation)? Our technology team is on this journey, this modernization, this transformational journey with us. As we explore new capabilities, we need to provide a path for our team members to advance their skills. It's critical and it's one that I'm deeply passionate about. Last year, we launched what we call our IT Academy. It's a workforce transformation platform powered by Pluralsight. This helps us meet the demands like data science (which is new), engineering, cloud architecture – the new capabilities that will ensure that we can deliver for the business.
I'm so pleased that that platform has taken off. Team members are embracing the platform and the opportunities to stay current in their craft. They're taking training and certification programs. Some of the more popular subjects are cloud, agile, business, just general business fundamentals because we get back to that importance of finding the intersection of business and IT. Even things like Python. It's inspiring to see how the teams and the
talent are coming along the way on this journey. The IT Academy was one platform that's helping us drive that. It's very important for us to bring our team members along on this journey. On the topic of IT, we have a question on Twitter from Chris Peterson who says, "Looking at combined stores like the Walgreens plus Kroger locations, what were the unique challenges for IT?" As you might guess, the integration. When you have Walgreens and Kroger, if that's the one that you're referring to, it's the customer experience across those two companies. It's
connecting the systems to manage that experience. That was one of the primary challenges that we embraced there, but we're getting through it. Can you talk about some of the key lessons or key pieces of advice that you have for business leaders that are looking at customer experience in the digital realm? What have you learned through this journey that you've been on? No matter what your role is, in terms of owning the business outcome through technology, it's finding that intersection of IT and business, having that relationship with the business to understand where the strategy is going, and finding the right way to invest in the technology and the people that'll get us there. It's also, I think, important to make what I call good trouble. [Laughter] That is to be disruptive in your thinking and challenge the status quo because that's what you're doing. You're trying to make changes and making changes in a big organization is sometimes tough. I think it goes back to the relationships you have, the ideas that you put on the table, and putting the customer at the center is certainly part of that in driving measurable business results. IT for IT's sake, in some cases that may make sense; in most cases, trying to
attach it to how is it going to drive the business forward and, ultimately, that's putting the customer at the center. As you said earlier, technology does not exist in isolation from what customers need by putting customers in the center, and from what your colleagues are delivering, various aspects of this experience, and the products and services, what they need. It sounds like that's really kind of the mantra that you have as well. That is. That is. Move fast, but not too fast. Also, increasingly, it's okay to fail, so be bold enough to try new things. You may fail. You may find something that doesn't work but have the courage to keep moving forward. That's sometimes hard in a big organization, but I think what we're trying to do is make big feel small. Challenge people to continue to innovate. I think we're having a lot of fun doing it,
too. I think that's an important part of the equation as well as having fun doing it. Now we have one more question from M. Ahmad Shahzad. He jumped in right at the wire here. He asks a great question, though. He says, "We're seeing a rapid increase in security and availability challenges, especially when there's the possibility of state-sponsored attacks on critical functions. What are your thoughts about security?"
We have made targeted investments in our security perimeters but also layered. Certainly, I think you're referring to some of the geopolitical issues that are out there, namely the war in Ukraine and Russia. There are increased security threats for that and other events. Getting back to how we need to protect our data, our customers' data, we made very, very specific and purposeful investments in the security of our IT infrastructure, and we have an amazing security team that's helping us continue to monitor and evolve that set of security capacities. Very important, certainly with increased threat factors that are out there today, and it continues to be important. We take it very seriously. We've run out of time, and so a huge thank you to Mike Maresca, Global Chief Technology Officer of Walgreens Boots Alliance. Mike, thank you so much for taking the time to talk with us today. I'm very grateful to you. Michael, thank you, and thanks to the
audience that attended. It's been great to talk about what's happening at WBA. To all of our audience members, thank you for asking such amazing questions. Really, it's great. Now, before you go, please subscribe to our newsletter. Hit the subscribe button at the top of our website, and subscribe to our YouTube channel, so we can send you information about our upcoming shows. Thank you so much, everybody. I hope you have a great day, and we'll see you again next time. Check out CXOTalk.com.