Digital Customer Experience with CTO of Walgreens Boots Alliance - CXOTalk #743

Digital Customer Experience with CTO of Walgreens Boots Alliance - CXOTalk #743

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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

2022-03-28 21:03

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