How Walgreens’ Innovative New Store Design Enhances Asset Protection

When Walgreens converted one of its most burglary- and robbery-plagued locations in downtown Chicago into a high-tech prototype store last year, the company knew it was the perfect place to try something new. The store, located in the city’s South Loop neighborhood, was a prime target for crime, but it was also situated in a heavy-foot traffic area and served a neighborhood with unique health care needs.

Mark Bunyan, asset protection lead director for the pharmacy company, shared at this week’s Retail Industry Leaders Association (RILA) Retail Asset Protection Conference how the company made the conversion, how it has been enhanced by asset protection principles, and how Walgreens plans to move forward with the prototype. 

Prior to last summer, Walgreens Store #7179 was considered a Security Level 4 with heavy product protection and on-site security services from off-duty law enforcement officials. Everything from diapers and skincare to toilet paper and laundry detergent was being lifted from the store, and it was a frequent victim of organized retail crime. 

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Making the Change

Walgreens decided that the South Loop location was a good candidate for its new omnichannel- and digital-focused prototype due to its demographics and community health care needs, and the company was able to close, convert and reopen the store in less than 30 days. It now features a bright, open environment with a customer service associate at the front to help shoppers either get pharmacy help, pick up an order from a courtesy window, or place an order on a kiosk for any of the products the store typically sells.

Customers can place an order through the Walgreens app or online, or via the in-store kiosk, and associates will fulfill those orders with products that are located in the back of the store. The store also features two aisles with about 1,000 SKUs worth of popular everyday essentials, such as vitamins, food, personal care items and paper products, which Bunyan likens to a grab-and-go section.

The pickup window also features traditional Walgreens services including FedEx, Western Union and photo developing. Average wait times for kiosk order placement to fulfillment are about two to three minutes, depending on volume.

According to Bunyan, the new format has allowed the store to be more tailored to customized fulfillment with team member and customer safety at the forefront, fast pickup throughout the store, more checkout options, increased digital communication, and a bevy of simple, streamlined health care options.

Asset Protection Considerations

While taking the majority of product off the retail floor inherently leads to better asset protection, Bunyan shared other considerations that went into the design of the South Loop store. Shelf sizes were significantly reduced, which means less product on the shelf that can be shoplifted, but also allows for less labor to keep an eye on and stock shelves. Walgreens also stocks more owned brands versus national brands within the store.

In general, Bunyan shared that the company is moving toward removing alcohol and tobacco from its Chicagoland stores since the products tend to drive a lot of crime and violence. Walgreens is also increasingly taking neighborhood demographics into consideration when it determines product mix for each store.

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Mulling the Results

While results from the new store prototype are mixed, Walgreens plans to stay the course with the unique nature of the omnichannel-focused location. On the upside, there have been no robberies or burglaries since July 2023, workplace violence and criminal activity incidents are down 85%, and the location has been able to do away with outside security services.

Meanwhile, sales are mixed. Self-service product purchases are down, which isn’t entirely a surprise since Bunyan admits customers at the store are missing out on impulse purchases, seasonal goods and promotions. Prescription sales, on the other hand, have gone up at the location.

Moving forward, Bunyan said Walgreens plans to install product protection in certain areas of the South Loop store, and the company is also keeping a close eye on the mix of products it offers in its grab-and-go aisles. The store is also poised to become a hub location for the company’s e-commerce ordering option, and stockroom and labor efficiencies will be further considered.

Walgreens Boots Alliance Inc. is an integrated health care, pharmacy and retail leader serving millions of customers and patients every day. It has approximately 12,500 locations across the United States, Europe and Latin America and employs more than 315,000 people. The Deerfield, Ill.-based Walgreens brand operates nearly 9,000 retail locations across the United States, Puerto Rico and the U.S. Virgin Islands. It’s No. 5 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.