Can Walgreens help Abercrombie achieve its ‘digital revolution’?

Discussion
Source: Abercrombie & Fitch/Google Play; Photo: Getty Images/Wolterk
Oct 28, 2022

Abercrombie & Fitch customers can now place orders online and pick their purchases up at  Walgreens. (Walgreens?)

The retailer yesterday said that it was expanding its fulfillment capabilities to enable customers to collect their orders from roughly 12,000 locations across the country including at FedEx, Office Depot and Walgreens stores.

Abercrombie gives customers a choice of “Pickup Point” locations during the online checkout process. Customers placing orders are notified once their order is ready through tracking updates and delivery notifications.

Abercrombie’s suite of fulfillment services also include curbside pickup, in-store pickup, reserve in store, ship from store and home delivery. The retailer offers standard delivery on online orders as well as two-day, next day and same-day options.

The company began offering same-day delivery from its full fleet of Abercrombie & Fitch, Abercrombie Kids, Hollister and Gilly Hicks stores during the 2021 holiday season. Postmates, Roadie, Shipt and Uber handle deliveries.

“We take a lot of pride in meeting our customers where they are and strive to execute a seamless delivery experience,” Larry Grischow, executive vice president, supply chain and procurement at Abercrombie & Fitch Co., said in a statement. “These new alternate pickup points are another great option for anyone seeking convenient, efficient and secure product delivery.”

Abercrombie & Fitch Co. CEO Fran Horowitz told analysts on the retailer’s second quarter earnings call that the company continues to pursue its “enterprise-wide digital revolution” to build upon the $1.7 billion in sales it did online in 2021.

Ms. Horowitz said the goal is for Abercrombie to “deliver a best-in-class, seamless digital experience” focused on listening to the customer.

“We were able to deliver experience, improvements across the omnichannel shopping journey,” she said of Abercrombie’s second quarter performance. “At the same time, we accelerate the pace of key multi-year technology modernization efforts, including upgrading our retail merchandising system, moving to the cloud and evolving our core data architecture. These efforts have and will continue to enable more organizational agility and improve our ability to leverage our rich data to drive decision making across the company.”

DISCUSSION QUESTIONS: Is a suite of fulfillment options like those offered by Abercrombie & Fitch important for retailers operating either standalone or mall-based stores? How does Abercrombie compare to its specialty clothing chain peers when it comes to delivering a seamless digital experience?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Walgreens. Wow. I can’t imagine anything more distantly removed from 'we only want the cool kids to shop here.' Love it."
"This noise gets further and further away from what the brand and store offer to become more of a commodity. Cleanup in Aisle 2!"
"Offering additional fulfillment options for customers is becoming table stakes – customers now expect it."

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19 Comments on "Can Walgreens help Abercrombie achieve its ‘digital revolution’?"


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Bob Amster
BrainTrust

Call me a skeptic but this is an example of strange bedfellows.

Ken Morris
BrainTrust

It’s clear that Abercrombie is trying to make a big push into digital retail, and partnering with Walgreens is a smart move. By offering a variety of fulfillment options, they’re making it as easy as possible for customers to shop with them. The key will be ensuring that the experience is seamless and that they’re listening to customer feedback to make improvements as needed.

Abercrombie has analyzed its customer journey and understands the need for this suite of delivery options. Their web sales growth is impressive, and this option will just accelerate the pace. On a lighter note, I’m just happy that I can now pick up my new pair of jeans at the same time as my prescription. Talk about one-stop shopping!

Jeff Sward
BrainTrust

Walgreens. Wow. I can’t imagine anything more distantly removed from “we only want the cool kids to shop here.” Love it.

Gene Detroyer
BrainTrust

A&F has less than 300 stores. Most are in malls. Less than 300 locations is a considerable limitation when it comes to BOPIS. By adding Walgreens, they are adding almost 9,000 more locations.

For A&F it makes considerable sense. If I am Walgreens management, I would have to consider another activity in my stores long and hard.

David Spear
BrainTrust

Gene, spot-on. This makes a lot of sense for A&F given their extremely limited store footprint. By leveraging the 9,000+ Walgreens locations, they are likely to be within 10 miles of nearly every American consumer. For A&F brand fans, this is a huge win. They can enjoy the benefits of shopping online from the comfort of their own couch and then either ship to home or pick up at their local Walgreens which will be a five minute drive away. What’s not to like?

David Naumann
BrainTrust

Good points Gene. While it may provide more store traffic for Walgreens and Office Depot, it may be questionable if it adds enough incremental revenues to offset the additional labor effort required to fulfill A&F’s BOPIS orders. While Abercrombie & Fitch’s goal is to provide its customers more fulfillment options, the third-party pick-up locations are not as convenient as home delivery. I guess this service is targeted for those consumers that don’t want to pay delivery fees.

Dion Kenney
BrainTrust
1 month 11 days ago

The concept is good (additional fulfillment options). But the brands and customer base are so different it’s likely to generate more cognitive dissonance than acceptance.

Lee Peterson
BrainTrust

Unlike Target and Apple, this match up gets a big “huh?” from me. It’s great that A&F moved from being “only for the cool kids” to a more mainstream, less expensive sort of fashion brand, but how does a drug store chain fit in with that? Same customer? I doubt it. Or if they are, they probably don’t even care if they do shop both. Why not Speedway next? It doesn’t seem thought through from a brand-to-brand perspective to me.

Gary Sankary
BrainTrust

Walgreens is already providing lockers for Amazon. This feels like another version of that strategy. Walgreens has 7,600 stores in neighborhoods across the country. This will give current and new customers another reason to visit Walgreens. In areas that experience a lot of package theft, I suspect this will be a compelling option for fulfillment. In other places where leaving packages on the stoop isn’t a big problem, probably not. The big question for Walgreens is, will it drive more business or will people pop in, pick up their stuff and leave? Looking at Amazon’s returns partnership at Kohl’s — I’m skeptical it will.

Bob Phibbs
BrainTrust

Is this what comes from the mania around “digital transformation?” This noise gets further and further away from what the brand and store offer to become more of a commodity. Cleanup in Aisle 2!

Kathleen Fischer
BrainTrust

Offering additional fulfillment options for customers is becoming table stakes – customers now expect it. Abercrombie has a limited number of stores with many in malls, so adding FedEx, Office Depot and Walgreens extends their reach to get closer to their customers. But I agree that the tie-in between Walgreens and Abercrombie seems a little humorous.

DeAnn Campbell
BrainTrust

The traditional convenience store and drug store business model is rapidly going away. But the location of these businesses deep within local communities is one of their biggest remaining assets. Partnering with others to monetize these locations is not just smart business, it’s inevitable.

Dave Bruno
BrainTrust

It’s – as ever – all about the experience. If Walgreens, Office Depot, et al. can deliver positive fulfillment experiences, then this is a win for A&F and for their customers.

Mohamed Amer, PhD
BrainTrust

How to turn mall location syndrome to your advantage? If you’re A&F, you increase pickup points 30-fold overnight through a partnership with Walgreens, FedEx Office, and Office Depot. Those partners will get a younger customer base into their stores, gain incremental sales, and perhaps repeat visitors.

Jeff Sward
BrainTrust

Retail evolution can happen in a revolutionary manner. This partnership would have been unthinkable a decade ago. Literally … would have been viewed as deranged thinking. Now, as DeAnn Campbell points out, it’s inevitable.

Shep Hyken
BrainTrust

If the convenience stores can provide lockers for Amazon deliveries, why can’t Walgreens do the same for A&F, and any other retailers? Walgreens should welcome more foot traffic, especially from a younger generation that haven’t yet made Walgreens a routine part of their lives.

Craig Sundstrom
Guest

At first I read this as “Walmart, and thought “WT…?” Then I read it correctly … and it made even less sense. Oh, I understand the thinking all right — make online delivery as easy as possible (and maybe pass on some upselling opportunities to partners) — but as the number of partnerships grows, I wonder if that’s being accomplished. Is it really easy if your pick-up points are scattered all over the place (Amazon @Kohls, AF @Walgreens, XYZ @ABC Store)? even if someone avoids getting confused, it still seems unwieldy. And as much as this may make sense to someone at HQ — either of Walgreens or AF, or both — the employees charged with implementing this may think otherwise … few stores were designed to be distribution centers.

So while I recognize the upsides here, I’m concerned downsides may begin to emerge as well … if they haven’t already.

Ananda Chakravarty
BrainTrust

As many experts on this thread have already mentioned, this is about reach for A&F. I don’t doubt that even the most “cool” kids still have to pick up their dry cleaning somewhere. The marketing match isn’t there, but maybe that’s what Walgreens is trying to tap into. It’s an interesting model, drives additional store traffic, and in this case more affluent traffic — and if Walgreens has the extra space to accommodate it, why not be a pick up store for a bunch of brands? Fulfillment depends on — and at the very least it offers — a lower fulfillment cost than direct home delivery. As for digital experience, Kohl’s was doing this with Amazon, Michael’s, Dollar General, CVS, Advance Auto Parts does this with Best Buy.

Christopher P. Ramey
BrainTrust

A brilliant idea. Retailers have to think broader about how they serve their markets. Bravo to both brands for their innovation.

wpDiscuz
Braintrust
"Walgreens. Wow. I can’t imagine anything more distantly removed from 'we only want the cool kids to shop here.' Love it."
"This noise gets further and further away from what the brand and store offer to become more of a commodity. Cleanup in Aisle 2!"
"Offering additional fulfillment options for customers is becoming table stakes – customers now expect it."

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