BUYING AND

MERCHANDISING
OPERATIONS
RESEARCH EVENT

Troy High School

4777 Northfield Pkwy, Troy, MI 48098
Ridhi Maruneni and Ria Lattupalli
April 7th, 2025
TABLE OF CONTENTS
I. EXECUTIVE SUMMARY #1-3

II. INTRODUCTION
A. Description of the business or organization
B. Description of the target market (demographics and
#4-5
psychographics)
C. Overview of the business or organization’s current artificial
intelligence strategies and usage

III. RESEARCH METHODS USED IN THE STUDY

A. Description and rationale of research methodologies selected
#6-8
to conduct the research study
B. Process used to conduct the selected research methods

IV. FINDINGS AND CONCLUSIONS OF THE STUDY

A. Findings of the research study #9-12
B. Conclusions based on the findings

V. PROPOSED STRATEGIC PLAN

A. Objectives and rationale of the proposed strategic plan
B. Proposed activities and timelines #13-18
C. Proposed metrics or key performance indicators to measure
plan effectiveness

VI. PROPOSED BUDGET #19-20

VII. BIBLIOGRAPHY #20

VIII. APPENDIX #20

 I. EXECUTIVE SUMMARY
Purpose Statement
The objective of the following proposed initiative is to develop an innovative 5-step plan (VITAL) to
attract younger audiences while addressing challenges faced by both consumers and employees.
Employee satisfaction is strongly linked to consumer satisfaction, so addressing both is essential to
maximizing Walgreens’ revenue. The strategic plan focuses on integrating artificial intelligence and
improving existing procedures within Walgreens based on primary and secondary research.

BUSINESS OVERVIEW
Walgreens was founded in 1901 and has since grown to the second-largest drugstore
chain in the United States, earning $147.7 billion in 2024. They distribute prescription
drugs and sell a variety of goods like food, beauty merchandise, health products, and more.
In November of 2023, Walgreens pharmacists staged nationwide walkouts. These walkouts resulted in extensive,
negative media coverage. While these protests have ended, Walgreens workers remain overworked.
Walgreens’ average customer is aged 57-75, earns over $80,000 a year, and is Caucasian American. The typical
patient is 48.1 years old with several chronic conditions like hypertension, Type 2 Diabetes.
The demographic in the Rochester Hills area, where our local Walgreens is located, is well-
educated, high-income, diverse, and young. The Rochester Hills location was chosen mainly
for its younger population to expand Walgreens’ customer base.
Walgreens currently uses predictive AI to predict demand trends and reduce unnecessary
inventory. They also use AI for supply chain management and data collection. Walgreens does
not use generative AI, but is open to adopting it when the company is ready.

RESEARCH METHODS We employed a Four-Phase multifaceted research procedure

in order to gather quantitative and qualitative data
Phase 1: Secondary Research
__________________________ Phase 2: Primary Research
Online Articles/Industry Walgreens Consumer/ In-Person
Reviews Research Employee Employee Observations
Interview Survey

Phase 3: Competitor Research __________________________ Phase 4: Analyzing Research

CVS CVS and Walgreens Focus Groups:

Competitor In-Person Gen Z
Employee Millennials
Interview Consumer Survey Observations
Gen X
Comparison
Baby Boomers

KEY FINDINGS
Secondary Research Primary
Primary Research
Research
Walgreens has received backlash for overworking Walgreens employees are overworked and have low
employees in the media. This was known as employee satisfaction, as seen in in-person
“Pharmageddon.” observations, employee survey, and interviews.

The local Walgreens locations have many negative Walgreens' target market is older. The focus group
ratings, with some calling the pharmacy a “joke” and revealed that Gen Z and Millennials prefer to shop at
saying that they have “horrible customer service.” CVS, while Gen X and Baby Boomers often shop at
CVS plans to implement an AI-driven customer Walgreens for prescription medications.
service model, as stated by their Health Chief The Walgreens and CVS consumer surveys indicate
Technology Officer, Tilak Mandadi. that Walgreens receives lower ratings than CVS for
the overall shopping experience.

EXECUTIVE SUMMARY 1
 CONCLUSIONS
Conclusion 1: Walgreens should utilize AI to Strengths Weaknesses

S W
improve their customer service by effectively Popular pharmacy Employees are
answering customer and patient concerns 8,441 locations overworked
Open to integrating AI Frequent stock shortages
Conclusion 2: AI can be used to improve the 2nd largest drugstore chain Poor ratings at local
in-person customer shopping experience Diverse product selection locations
Low employee satisfaction
Conclusion 3: Walgreens should target a
younger demographic to increase their revenue Opportunities Threats

0 T
Can use AI for: Currently has an older
target market
Conclusion 4: Walgreens should use AI to improve Inventory management
Working conditions Low consumer ratings
pharmacy efficiency and patient care Custom promotions Negative coverage in media
Increase customer Employee strikes and
Conclusion 5: AI can be used to personalize the demographic to Gen Z and Millennials backlash due to poor working conditions
customer shopping experience at Walgreens Improve pharmacy

Using our conclusions, we set 5 objectives as benchmarks.

OBJECTIVES Each objective corresponds to a specific conclusion number.

1 Create a Virtual Health Assistant 2 Introduce AI kiosks with

to provide medication advice, personalized discounts, self-
symptom help, and chatbot support to checkout, and senior-friendly features.
address concerns.

3
Attract Gen Z consumers
OBJECTIVES 4
Leverage AI to automate
to boost beauty sales with AI mirrors prescriptions, improve drug safety,
for virtual makeup trials. and boost employee satisfaction.

Enhance shopping with AI dietary filters, personalized

5 bundles, and targeted promotions.

PROPOSED PLAN
VITAL is a 5-step plan to drive sales, engage younger
customers, alleviate burnout, and enhance AI at Walgreens

V - Virtual Care I - Intelligent Savings

Integrating an AI chatbot powered by OpenAI into the WalPerks is an AI-driven kiosk for myWalgreens
myWalgreens app, branded as a members that offers personalized discounts,
Virtual Health Assistant, with features such real-time price checks, and simplified coupon
as answering FAQs, providing personalized scanning. It streamlines shopping with a Smart Cart,
recommendations, offering health advice, voice activation, and fast prescription refills, boosting
conducting drug analysis, and enabling voice efficiency for both customers and employees.
activation to alleviate consumer concerns.

T - Tech-Driven Beauty A - Automated Pharmacy

Walgreens can utilize an AI-Integrated AI-driven scheduling at Walgreens will reduce
Mirror with AR for virtual makeup trials and pharmacist burnout, improve accuracy, and enhance
personalized recommendations. It targets drug safety by automating tasks and optimizing
younger customers, reduces labor costs, and prescription workflows. This system helps prevent
boosts foot traffic, helping Walgreens fatigue, ensures timely medication access, and
compete with CVS in the beauty market. supports employee well-being.

L - Lifestyle Personalization
WalYou is an AI-powered system integrated into the Walgreens website as a subsection that helps
customers with specific dietary and health needs easily find suitable products. It creates personalized
product bundles based on individual preferences such as keto diet, vegan, low-sodium, and more.
This service simplifies shopping and ensures that everyone can find the products they need.

EXECUTIVE SUMMARY 2
 TIMELINE
Research AI Health Assistant Months 1-3 Launch AI Health Assistant Months 7-9
Begin development of WalPerks Kiosks and software Add self-checkout and AI deals to WalPerks Kiosks
Research AI beauty and begin trials Launch AI-Integrated Mirror marketing campaign
Plan and develop automation process systems Optimize pharmacy workflow
Design and develop WalYou Finalize WalYou and launch

Q1 Q2 Q3 Q4

Install WalPerks in pilot and 25 stores Months 4-6 Add and optimize loyalty rewards Months 10-12
Test AI-Integrated Mirror in 20 locations Gather customer feedback to improve AI Health Assistant
Test automated pharmacy in Michigan and automate Track AI-Integrated Mirror and evaluate impact
prescription notifications
Improve efficiency and finalize pharmacy automation
Test WalYou and collect user feedback

KEY METRICS
Conclusion Alignment: Conclusion 3
Conclusion Alignment: Conclusion 1 Conclusion Alignment: Conclusion 2

V I T
20% reduction in Achieve 40% adoption Maintain a 4.2+ star rating
support inquiries, among myWalgreens in post-surveys asking
reducing wait times, members in the first year, customers if they'd
and boosting customer cutting manual coupon choose Walgreens over
satisfaction. processing time by 55%. CVS for beauty products.

Conclusion Alignment: Conclusion 4 Conclusion Alignment: Conclusion 5

A L
Reduce pharmacist Increase WalYou usage by
turnover rates by 37% and 55% in six months,
prescription mistakes by boosting satisfaction,
25% in six months purchases, and repeat
post-integration. business.

BUDGET
Proposed Budget

Activity Cost Campaign Cost Distribution

V $66,500

I $23,043,000

T $27,130,600

A $36,000

L $16,500
Total cost to implement the VITAL initiative on a
$50,292,600
national scale

Proposed Return on Investment(ROI)

Amount Gained - Amount Spent $4,744,180,000 - $50,292,600

Amount Spent
X 100 =
$50,292,600
X 100 = 9,333%

EXECUTIVE SUMMARY 3
 II. INTRODUCTION
A. DESCRIPTION OF THE BUSINESS OR ORGANIZATION
Walgreens was founded in 1901 by Charles Rudolph Walgreens and has since grown
into the second-largest pharmaceutical store chain in the United States. They have
almost 9,000 locations, 155,000 employees, and 85,000 healthcare service providers.
Walgreens made $147.7 billion dollars in 2024 and 63% of those sales are from the
pharmacy section. However, they also sell food, nonprescription drugs, beauty products,
to over 8 million people per day. Their vision statement is to be “My Walgreens” for all
Figure 2.1 - Walgreens employee
Americans and their first choice for health-related goods/services. protest
Towards the end of 2023, Walgreens received backlash for how they treated their workers, specifically those
working in the pharmacy. They were criticized for overworking pharmacists, inhumane conditions, and low pay.
This employee unrest and issues were prevalent in companies like Walgreens, and RiteAid, with RiteAid shutting
down partly due to these issues. Pharmacy employees united to start a wave of employee protests and walkouts,
earning the name “Pharmageddon.” These protests, as seen in Figure 2.1, resulted in lower customer
satisfaction and decreasing sales. While these protests have died down, Walgreens employees still feel burnt out.
The research and proposed plans are for the Walgreens located on 2050 S
Rochester Rd, Rochester Hills, MI 48307 (Figure 2.2). This location was chosen
specifically for the younger, educated, and higher-income population in
Rochester Hills. Currently many customers at this location are older, so it does not
represent Rochester Hills community broadly. Therefore, the following proposal
aims to better engage the underserved, younger population in Rochester Hills
and increase overall revenue.
Figure 2.2 - Local Walgreens located in
Rochester Hills, Michigan

B. DESCRIPTION OF THE TARGET MARKET

Demographics
The average Walgreens consumer is Caucasian, aged 57 to 75, college-educated, earning over
$80,000 annually, a U.S. citizen, and living in the suburbs. Health-related services or goods attract
27.7% of Walgreens customers. The average patient age is 48.1, with common diagnoses including
medical exams, hypertension, and Type 2 diabetes. On average, Walgreens' patients are 9.6 years
older than those at CVS.

Income Education
The median per capita income for residents in Overall, the Rochester Hills population is well-
Rochester Hills is $50,744, which is $7431 educated. 59% of Rochester Hills residents
more than the United States’ median. The over the age of 25 have a Bachelor’s degree or
median household income in Rochester Hills higher, compared to 36.2% in the United
is $105,784, which is $28,065 more than the States. 29% of people within this area have a
country’s median household. Additionally, postgraduate degree, which is significantly
53% of the Rochester Hills population earns higher than the United States’ 14%.
more than $100,000.
Population By Household Income Percent Population By Highest Level Of Education Percent

35 30 29
35 30
30 29
25 22
25 20
20 18 18 15
15
15
10
10 4
5 5
0 0
Under $50K $50K - $100K $100K - $200K Over $200K No Degree High School Some College Bachelor's Post-grad

INTRODUCTION 4
 Age and Generation Race and Ethnicity
Rochester Hills, Michigan has a median age of Rochester Hills is 73% White, 3% Black, 11%
40.6. They have a large young population with Asian, 8% Hispanic, and 5% other. Compared
approximately 48% being under 40 years. to the United States’ percentages, there are
Therefore, a significant amount of Rochester significantly more White and Asian
Hill’s population is Generation Y/Millennial populations and less Black and Hispanic
and Generation Z. populations.

Population By Age Range Percent Population By Race and Ethnicity Percent

14 14 80 73
14 13 13
12 12
12 60
10 9
8
8 40
6 5
4 20 11
2 5 8
3
0 0
0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+ White Black Asian Other Hispanic

Psychographics
Walgreens customers usually live in the suburbs, lead an urban lifestyle, watch local news, and are
active on social media platforms--often FaceBook. A study surveying over 2,700 people found that
Walgreens customers tend to read online reviews prior to purchasing goods. The survey also
found that parents are 33% more likely to shop at Walgreens. Many Walgreens consumers have
health issues requiring them to purchase medications--which is why pharmacy-related goods
makes up 63% of Walgreens’ revenue. Rochester Hills, Michigan is predominantly Christian, but it
also home to many diverse religions such as Hinduism, Islam, Judaism, Sikhism, and more. Overall,
Rochester Hills is politically diverse and does not lean strongly toward any political group.

C. OVERVIEW OF THE BUSINESS OR ORGANIZATION’S CURRENT ARTIFICIAL

INTELLIGENCE STRATEGIES AND USAGE
Since 2017, Walgreens has been looking for ways to predict patterns and demand
forecasting. They looked at the impact of many external factors such as weather, social
media, and local events. In 2022, Andy Kettlewell, Group Vice President of Inventory and
Analysis, partnered with Zebra/[Link] to implement artificial intelligence in Walgreens
locations--winning him the 2022 Retail Innovator Award. Kettlewell states that Walgreens
now “forecasts what our approximately 9 million daily customers are going to buy across 200
million products, and then navigates how inventory will flow from our 4,000 manufacturers
and suppliers.” Walgreens currently implements AI through supply chain management,
inventory management, and more. They collect large amounts of data and within their
database use it to identify patterns and make predictions. This allows them to plan for busier
months, like flu season or holidays.

Walgreens mainly utilizes predictive artificial intelligence (using previous data to predict
future data) to forecast demand trends. As a result, they can reduce out of stocks and
unnecessary inventory. According to Tracey Brown, Executive Vice President and
President/Walgreens Retail and Chief Customer Officer, Walgreens successfully reduced out
of stock products for “consumers by 15% and reduce inventory by 5%.”

Walgreens is yet to use generative artificial intelligence (creating new data/content) due to
privacy concerns, changing existing work conditions, and because Walgreens is not ready.
They believe that generative artificial intelligence should not replace jobs, but assist them in
various ways like marketing, merchandising, supply chain, and product development. They
are open to the idea in the future but are waiting to prepare and position the company to
accommodate assistance from generative AI.

INTRODUCTION 5
 III. RESEARCH METHODS USED IN
THE STUDY
Research Objective

Identify the limitations of Walgreens' current artificial intelligence strategies/practices and analyze the
implementation of new procedures to address existing challenges.

Research Procedure
To initiate the research process we utilized a Four-Phase research procedure in order

__________ __________ __________

to gather quantitative and qualitative data.

Phase 1 Phase 2 Phase 3 Phase 4

Secondary Primary Competitor Analyzing

Research Research Research Research
Figure 3.1 - First Walgreens
location

A. DESCRIPTION AND RATIONALE OF RESEARCH METHODOLOGIES SELECTED

TO CONDUCT THE STUDY
Secondary Research
Online Articles/News Reports: Research was conducted into Walgreens' current artificial
intelligence practices by examining advancements outlined on their website. Additionally news
reports about Pharmageddon crisis were examined. Both articles and reports provided valuable
insights into Walgreens' ongoing efforts to integrate artificial intelligence.

Phase 1
Online Reviews: We analyzed reviews from multiple Walgreens locations throughout
Rochester Hills. By categorizing these reviews about artificial intelligence, we identified gaps
related to shortcomings and traced them back to their root causes. We used platforms such as
Google and Yelp for research.

Industry Research: Leveraging credible sources and analyzing the Walgreens Boots Alliance
website, we conducted research on how pharmaceutical chains integrate artificial intelligence
into the experiences of both consumers and employees. The findings highlighted opportunities
for Walgreens to implement solutions and increase foot traffic across the country.

Primary Research
Walgreens In-Person Observations: We began Phase 2 by conducting in-person observations
at our local Walgreens store (Figure 3.1). To reduce biases from focusing on just one store, we
also examined consumer behavior and employee procedures at a second nearby location
Phase 2

(Figure 3.2). These observations gave us a direct understanding of the consumer purchasing
process. Observations were then converted to a score utilizing our checklist (Figure 3.4).
Figure 3.2 - Another
CLICK HERE: Quantifiable Checklist Scale for In-Person Observations local location

Consumer Survey: To gain a deeper understanding of Walgreens target demographic and to

identify opportunities for growth among new consumers, a consumer survey (Figure 3.3) was
conducted to collect quantitative data for the strategic plan. This approach ensures that
consumer voices are acknowledged, while also revealing Walgreens’ minority demographic--
Generation Z. The findings from this data were essential in developing foundational AI solutions SCAN ME
that target younger consumers. Figure 3.3 -
Consumer Survey
RESEARCH METHODS USED IN THE STUDY 6
Employee Survey: The employee survey is aimed to collect a nationwide perspective on how
Walgreens employees use artificial intelligence in their daily routines. It also identified ways
AI can reduce stress and concerns while enhancing benefits for both pharmacists and store
employees. With 170 respondents, we gathered crucial quantitative data that served as a
foundation for integrating AI solutions in our strategic plan.

Phase 2
Walgreens Employee Interview: During our in-person interview with Jasmine, a Walgreens
employee with 6+ years of experience (Figure 3.6), we asked a range of questions about
employee and consumer usage of artificial intelligence. She shared valuable insight on how
the integration of AI can benefit both groups. Drawing on her prior experience at CVS,
Jasmine offered a comparative perspective on how these two leading pharmaceutical chains
implement AI. In addition, we also interviewed Jin Yu (Figure 4.2), a Walgreens employee with
3+ years of experience. The findings provided substantial insight onto what employees seek
for improvement and how AI can play a crucial role in addressing these challenges.

Competitor Research
Competitor In-Person Observations: By visiting the CVS located
near our local Walgreens, we gained firsthand insight into how AI is
integrated into the shopping experience. This allowed us to
Figure 3.4 - Score Calculation Formula
compare the different applications and explore how Walgreens
could attract a larger audience by adopting the strategies employed by CVS. We utilized a checklist to
quantify results into scores (Figure 3.4), offering a comparative measurement shown within the checklist.

Phase 3
CLICK HERE: Quantifiable Checklist Scale for In-Person Observations
CVS Employee Interview: After the completion of Phase 2, to initiate Phase 3 we traveled
across the street to CVS which is currently the #1 leading pharmaceutical chain in the US,
and interviewed Riya (Figure 3.5), a CVS employee with 4+ years of experience we asked
the same questions to Riya that we did to Jasmine (Figure 3.6) to provide a comparative
measure for how both locations’ employees and consumers operate. Findings showed Figure 3.5 - Interview with
significant gaps that Walgreens is lacking in the artificial intelligence sector. our local CVS Employee

Competitor Consumer Survey: To provide comparative data, the competitor consumer

survey offered us valuable insights into the demographics of companies like Rite Aid and
CVS. By quantifying our observations using various Likert scales, we can effectively capture
the contributions of AI to its fullest potential and generate actionable results for improvement.

Analyzing Research
The final phase focused on verifying our understanding and interpretation
of the research, piecing together the data and observations to draw
conclusions. Most of our findings largely relied on primary resources, while
secondary resources helped clarify what we discovered. Upon completing
our research, we returned to our local Walgreens to share our findings with
Jasmine (Figure 3.6) and explain our proposed solutions for integrating AI
into both employee and customer experiences. Additionally, during our
Phase 4
visit to CVS, we spoke with a CVS employee and learned how they leverage
AI to identify emerging trends, selecting products for their stores and
Figure 3.6 - Interview with our
determining marketing strategies, as illustrated in the section of the store Figure 3.7 - CVS
local Walgreens Employee “TIK TOK VIRAL.” (Figure 3.7) In-Person Observation

Consumer Focus Group: To ensure consumers’ perspective was recognized, eration at

en ner ion
we organized four focus groups composed of individuals from the Rochester
Ge
G

X
Z

Hills community. During the study we discussed our AI-integrative strategic

plan, their shopping habits, and actively listened to their feedback, which is Focus
essential for tailoring our plans to effectively resonate with Walgreens’ target M
illenials Groups by
Boom
er

audiences. The four focus groups allowed for a comparative analysis among
Ba

Generation Z, Millennials, Generation X and Baby Boomers, enabling us to

develop solutions that ultimately lead to enhanced customer satisfaction.

RESEARCH METHODS USED IN THE STUDY 7

 B. PROCESS USED TO CONDUCT THE SELECTED RESEARCH METHODS
Method of
Date Conducted Process Used/Rationale
Research

In early September, we contacted our local Walgreens to request an

interview. We scheduled individual discussions with employees.
Interview with To collect data efficiently, we developed a set of free-response
Store Employees October 17, 2024 questions (included in the appendix).
(3) With the employees' (Walgreens: Jin Yu, Jasmine, and CVS: Riya)
verbal consent, each interview was recorded, enabling us to extract
quotes and review the conversations during Phase 4.

We examined both in-person and online processes to understand

how artificial intelligence is integrated, conducting in-person
Competitor September-
observations, and one-on-one discussions with employees.
Research December 2024 We researched AI implementations in companies such as CVS and
Rite Aid.

In early October, we distributed our survey that included various

questions related to how AI contributes to the employee
experience.
Employee Survey October- By utilizing social media platforms such as Facebook and Twitter to
(170) December 2024 join several Walgreens employee Facebook groups, we were able to
garner 170 responses. These responses provided valuable insight
into what is currently being used and what gaps could be bridged
to further enhance the employee experience through AI usage.

Conducted a simple random sample (SRS) of consumers in the

December 17,
Focus Groups Rochester Hills community from those who responded to the
2024 survey.
(Generation Z,
December 21, Reached out to each participant and obtained verbal consent to
Millennials,
2024 use their quotes.
Generation X, Notified each participant of the scheduled meeting date.
December 30,
Baby Boomers) Ensured each focus group included individuals from diverse racial
2024
and socioeconomic backgrounds.

To conduct first-hand research, we visited both locations twice on

In-Person separate occasions.
After completing our observations, we obtained verbal consent
Observations October 26, 2024
from both store managers to use the data and images collected.
(At Walgreens and November 11, 2024 We also developed a quantifiable checklist scale to establish a
CVS) standardized measurement for AI integration throughout the
consumer shopping experience.

In late September, we met with the store manager to explain our

initiative.
In early October, we visited our local Walgreens, posted QR codes
throughout the store, and encouraged incoming customers to take
Consumer Survey September-
the survey.
(61) December 2024 We leveraged word of mouth and social media platforms such as
Facebook, Snapchat, Instagram, and Twitter to reach a wide
audience.
This ultimately resulted in an impressive 61 responses.

RESEARCH METHODS USED IN THE STUDY 8

 IV. FINDINGS AND CONCLUSIONS
OF THE STUDY
A. FINDINGS OF THE RESEARCH STUDY
Secondary Research
Online Articles/News Reports: Walgreens currently uses artificial intelligence to keep track of inventory for well
stocked stores. Towards the end of 2023, Walgreens, and many other pharmaceutical chain companies, received
backlash for labor shortages, overworked workers, and inhumane conditions. This backlash caused waves of
employee walkouts in what was known as “Pharamageddon.” While the employee unrest has died down, much of
Walgreens staff still feels burnt out and understaffed.

Online Reviews: There are three Walgreens locations in Rochester Hills, Michigan. They have an average rating of
3.03/5. Some ratings are favorable, saying they are “friendly” and “informative.” However, there are many negative
comments like, “Walgreens on Crooks Rd, Rochester Hills, Mi. It is a pharmacy without ethics or seriousness,
horrible customer service” or “This pharmacy is a joke. I will never use them again.” A consistent trend in all of the
locations was that new customers, who were transferred post RiteAid bankruptcy,
were dissatisfied, resulting in many negative reviews.

Industry Research: According to CVS’s Health Chief Technology Officer, Tilak Mandadi, CVS plans to make to make
an AI based customer service where customers can ask artificial intelligence their questions, rather than go
through the typical, tedious process of menu based options. They are also using machine learning to improve
pharmacy efficiency in refilling prescriptions and reduce treatment gaps. As mentioned prior, Walgreens currently
uses artificial intelligence for inventory management to maintain stock in all locations.

Primary Research
In-Person Observations: At both Walgreens locations, we observed
overworked employees, long pharmacy lines, empty shelves, and frustrated 2
customers. Staffing was low, with hiring signs throughout the store and little
to no visible AI integration. Most customers were older and used coupons. In 0

contrast, at the CVS locations employees appeared more relaxed. When we

asked to interview/talk with employees we found that the CVS employees Figure 4.1 - Filled out Quantifiable Checklist Scale for
were more willing. Overall, the stores were better stocked, showed greater In-Person Observations question
AI integration, attracted a wider age range of customers, and featured youth-focused sections like the "TIKTOK
VIRAL" makeup section. We also analyzed both stores with the Quantifiable Checklist Scale, as seen in Figure 4.1.
Using observations and the checklist, CVS scored a 8/10 for AI usage and 6/10 for employee experience, while
Walgreens scored a 4/10 for AI usage and 3/10 for employee experience.

Consumer Survey:
*Questions evaluated on a scale of 1-5, with 1 being the lowest and 5 being the highest
Walgreens consumer responses CVS consumer responses
Survey Questions
(47 respondents) (14 respondents)
60+ 60+
4.3% Under 18 5%
21.3% 51-60
15% Under 18
33.1%
51-60
34%
How old are you? 19-30
8.5%
41-50
9%

31-40 31-40
41-50 20% 19-30
21.3%
10.6% 18%

FINDINGS AND CONCLUSION OF THE STUDY 9

 Walgreens consumer responses CVS consumer responses
Survey Questions
(47 respondents) (14 respondents)

55.30% were male, 40.40% were 52.10% were female, 37.20% were male,
What is your gender?
female, and 4.30% preferred not to say. and 10.70% preferred not to say.

82.60% of respondents reported

78.60% of participants said they shop
How often do you shop at typically shopping in-person and
in-person, 14.30% shop both online and
Walgreens/CVS? 17.40% said they shop both
in retail stores, and 7.10% shop online
online and in-person
20 19 6
6

How would you rate your 15 13

5
4
4
10
shopping experiences at 10 3
3
2
Walgreens/CVS?* 5
1
3
1
1

0 0
1 2 3 4 5 1 2 3 4 5

How much do you think artificial 41.27% of respondents chose 1, 50.03% 21.40% of respondents chose 1, 64.30%
intelligence(AI) is currently used selected either 2 or 3, and 8.70% chose either 2 or 3, and 14.20% ranked
when shopping?* ranked as either 4 or 5 as either 4 or 5
Do you have any dietary 31.90% of participants have a dietary 35.70% of participants have a dietary
preferences? preference and 68.10% do not preference and 64.30% do not
What do you think could improve
An AI integrated mirror... 14 An AI integrated mirror...
your shopping experiences if
6

implemented? Personalized emails.... 11

Personalized emails.... 5

Select all that apply: Product bundles tailored... 21

An AI-Integrated Mirror to help select beauty-related Product bundles tailored... 5
products A customer portal... 13
Personalized emails, promotion, and deals Product A customer portal... 4
bundles tailored to the customer AI filters to find specific... 17
A customer portal for all consumer needs and
AI filters to find specific... 2
insights through an AI based platform An AI Chatbot... 16
AI filters to find specific products or for product
An AI Chatbox... 3
recommendations A schedule for when to... 18
An AI Chatbot for customer support
A schedule for when to take certain medications Better customer service (Other) 6 A schedule for when to... 6
created by an AI based software
0 5 10 15 20 25 0 1 2 3 4 5 6
Other

Walgreens Employee Survey:

Summary of data
Survey Question
(170 respondents)
36.2% are pharmacy technicians and 43.8% of the respondents are store
What is your position at Walgreens?
employees
28.8% of respondents are aged 25-34, and 29.7% of employees were
How old are you?
aged 40-60
Do you think your workload is 28.6% of employees found their workload to be reasonable and 71.4% of
reasonable? respondents did not
How would you rate your employee 39.6% of respondents rated employee satisfaction as a 1, 27.9% rated as 2,
satisfaction on a scale of 1 to 5? 22.4% rated as 3, 9% rated as 4, and 1.1% rated as 5

Employee Interview:
Jasmine: At the Walgreens location we interviewed Jasmine, a store employee who previously worked at CVS. She
said she felt that CVS would have a younger audience and she felt overworked at Walgreens. She believed that
Walgreens does not utilize AI but could benefit from it to “reduce the amount of boring, tedious tasks to do.”
Jin Yu: Jin Yu was a shift lead at the second local Walgreens location. He worked at
Walgreens for 3+ years and believes Walgreens’ systems are inefficient; he says mundane
tasks like coupons, customer service, and more could easily be taken over/improved
through the integration of artificial intelligence. Yu also believes that his workload is too
much and can be reduced with artificial intelligence.
Figure 4.2 - Insight Interview with Jin

FINDINGS AND CONCLUSION OF THE STUDY 10

Riya: We interviewed Riya at a local CVS location and she said she loves her job as a makeup specialist. She
confirmed that CVS has a younger audience, with a lot of them shopping in the beauty/makeup aisles. She said she
thinks “artificial intelligence is used to customize promotions and improve shopping experiences for customers”
and believes that using artificial intelligence could be used to help customers find correct shades and products.

Consumer Focus Group:

Generation Z: The participants were Peytyn Herron, Jeanne Park, and Raiyan Sonki, with their ages eration
en
ranging from 15 to 26. After answering the standard questions found in the appendix, we found that

Z
they are most open to using artificial intelligence in daily life and feel it could improve their shopping
experiences. They also reported shopping more at CVS after having had bad experiences at
Walgreens. All the participants said they do not use coupons frequently, but would be open to using
them more if customized using artificial intelligence.
Generation Y/Millennials: The focus group participants were Yeseina Lopez, Sachin Reddy, and James illenials
Miller and their ages ranged from 31 to 39. There were very similar results among Gen Z and M
Millennials, as they too were open to AI-driven promotions and a customized shopping experience.
They tended to use AI less, but were not against it. Miller complained that it was hard to find food
options without gluten, as he had Celiac disease. They shopped both at Walgreens, CVS, and other
pharmaceutical chains, but overall preferred CVS to Walgreens.
Generation X: The Generation X focus group participants were Jiang Han, Stacey Brown, and Isiah at
ner ion
McKay with their ages varying from 45 to 57. 2/3 of the participants reported using coupons

Ge

X
frequently and that they would prefer coupons tailored to their shopping habits. They reported
going to both Walgreens and CVS, however they prefer Walgreens’ pharmacy and CVS for goods. All
the participants believe that AI could improve shopping at Walgreens and may cause them to favor
Walgreens’ retail over CVS’s.
Baby Boomers: The participants were Bonnie Noma, Chuck O' Connell, and Laxmi Patel and their
Boom
ages ranged from 61 to 73. All of the participants use coupons on a daily to weekly basis and seemed by

er
Ba
enthusiastic when asked about customized promotions/coupons through artificial intelligence. They

s
are less adoptive of AI, though they believe that with the proper instructions and tools they can
benefit from it. Overall, they mainly shop at Walgreens for prescription medications, with all of the
participants taking at least 4 different medications daily.

Notable Quotes:
“My main pharmacy (where I would pick up prescriptions) was at
“I would like more help during the busy periods. It is very hard to manage Rite Aid. Until my local Rite Aid shut down I would never shop at
filling prescriptions on an unrealistic schedule.” Walgreens. After the shut down, my main pharmacy changed to
-Anonymous Walgreens Pharmacist Walgreens and I’ve only experienced bad service. First, there was
only 1 person working the counter and he took over 15 minutes to
serve the person in front of us. Then, when it came to our turn he
was rude when we asked about their experience with the recent
“I’ve found that whenever I need to buy something closure of Rite Aid. He mentioned the issues they faced and how
quick like gum, quick essentials, or drugstore they had several new customers that they had to fully transfer
makeup, I usually shop at CVS--going to Walgreens over to Walgreens. He seemed very defensive towards Walgreens
doesn’t even cross my mind. The few times I’ve and was super annoyed with us since we originally associated with
been in a Walgreens, I was very confused and Rite Aid. In addition to my experience, the selection in Walgreens
many products were out of stock.” is VERY limited. They have a lack of supply of a lot of stuff and I
-Peytyn Herron would honestly rather go to CVS. Personally, I’ve had a negative
Figure 4.3 - Peytyn Herron
(Generation Z focus group experience at Walgreens and wouldn’t recommend it to anybody.”
participant) -Anonymous Walgreens Consumer Survey Respondent

B. CONCLUSIONS BASED ON THE FINDINGS

Conclusion 1: Walgreens should use artificial intelligence to better their customer service and to effectively
answer customer/patient concerns
The anonymous Walgreens consumer respondent, who would originally shop at RiteAid, had many
complaints related to the pharmacy. The problem of long wait times and patient frustration would
be eliminated if Walgreens utilized an AI driven chatbox instead. Additionally, approximately 34% of
Walgreens consumer survey participants believed that an AI chatbox for customer support would
improve shopping at Walgreens. Jin Yu, a Walgreens employee, also asserted that his time would be
better dedicated to doing other tasks than customer service, which could easily be taken over by
artificial intelligence.

FINDINGS AND CONCLUSION OF THE STUDY 11

Conclusion 2: Artificial intelligence can be used to improve the in-person shopping experience
82.6% of Walgreens consumer survey respondents reported to shopping in-person. Yet, Walgreens’
ratings for shopping experience are significantly lower than their competitors. Therefore, improving
the in-person shopping experience will improve the average Walgreens customer experience and
subsequent ratings. Furthermore, potential younger customers favor utilization of technology while
shopping. Utilizing artificial intelligence will not only improve the overall shopping experience for
customers, but will expand Walgreens’ customer base.

Conclusion 3: Walgreens should target a younger demographic to increase sales

According to the focus group results, Walgreens’ customer base is older, as the Gen Z and Millennial
participants preferred to shop at CVS. Additionally, CVS targets a younger audience by having
beauty consultants and a “TIKTOK VIRAL” section in their makeup aisles. After speaking with Riya, a
beauty consultant at CVS, we found that CVS has a younger demographic and prioritizes attracting
younger customers. Therefore, Walgreens can increase their revenue significantly by selling to a
large, younger demographic by improving their makeup aisles.

Conclusion 4: Walgreens should utilize artificial intelligence to improve pharmacy efficiency and patient care
The employee survey found that 71.4% of Walgreens employees do not find their workloads to be
reasonable. In addition, an anonymous Walgreens pharmacist said that they were filling
prescriptions on an “unrealistic schedule.” This constant trend of overworked and burnt out
pharmacists can be reduced by leveraging artificial intelligence to make realistic, safe prescription
fulfillment schedules. Furthermore, poor news coverage caused by pharmacist backlash reflects
negatively on Walgreens. These problems can be resolved if pharmacists are given a reasonable
workload and can improve efficiency in the pharmacy. Improving employee satisfaction, will not
only enhance staff well being, but lead to better customer service and consumer satisfaction.

Conclusion 5: Artificial intelligence can be used to personalize the customer shopping experience
Survey responses indicate that over 30% of Walgreens consumers have dietary preferences.
Additionally, focus group participant James Miller, who has Celiac disease, also reported that it was
“hard to find anything” he could eat that was gluten free. Given the wide range of dietary
restrictions due to religion, health conditions, and the growing popularity of vegetarianism,
veganism, and other diet trends, it's essential for Walgreens to accommodate the diverse needs of

SW
its consumers. In the consumer survey, customized product bundling was the most selected
option for what could improve the shopping experience.

Strengths Weaknesses
Walgreens’ pharmacy is preferred According to the employee
and popular among older customers interview and survey, Walgreens
Diverse product selection employees are overworked
More stores than competitors with Frequent stock shortages, which
8,441 locations were reported in the focus group
Open to artificial intelligence and through an anonymous
integration Walgreens survey respondent
Second largest drugstore chain in Negative ratings at local locations
the United States Low employee satisfaction

Opportunities Threats

0T
They can use artificial intelligence to Walgreens mainly serves older
improve inventory management, customers, while CVS attracts a younger
employee workloads, customized crowd.
coupons/promotions, and to Customers rated the shopping
improve the pharmacy experience at CVS higher than
To improve employee working Walgreens
conditions using artificial Negative coverage in the media due to
intelligence employee strikes and backlash
Focus on increasing customer base Negative brand perception from poor
to Gen Z and Millennials to maximize ratings at local locations
their revenue and serve a larger CVS plans to integrate AI and machine
market learning to boost customer service.

FINDINGS AND CONCLUSION OF THE STUDY 12

 V. PROPOSED STRATEGIC PLAN
A. OBJECTIVES AND RATIONALE OF THE PROPOSED STRATEGIC PLAN
Plan Objective:
The objective is to create an innovative 5-step strategic plan (VITAL) to attract younger audiences while
addressing challenges faced by both consumers and employees. Since employee satisfaction strongly influences
consumer satisfaction, strategically improving both is key to maximizing Walgreens’ revenue. This plan focuses on
integrating artificial intelligence and improving existing procedures based on the research findings.

Objective #1: Virtual Care (AI Health Assistant)

V Implement a robust virtual health assistant that provides medication guidance, symptom-
based recommendations, and chatbot support to alleviate concerns.

Objective #2: Intelligent Savings (WalPerks Kiosks)

I Relieve some responsibility and stress on employees by implementing AI-powered kiosks
that provide tailored discounts, self-checkout, and features to assist older demographics.

Objective #3: Tech-Driven Beauty (AI-Integrated Mirror)

T Attract Gen Z and boost beauty sales with AI-integrated mirrors that offer virtual makeup
trials and provide a competitive edge over Walgreens's competitors.

Objective #4: Automated Pharmacy (Pharmacy Integration)

A Automate prescription management, enhance drug safety, and improve employee
satisfaction through AI-driven scheduling and inventory tracking.

Objective #5: Lifestyle Personalization (WalYou Platform)

L Enhance the customer shopping experience by offering AI-driven dietary filters,
personalized product bundling, and targeted promotions.

B. PROPOSED ACTIVITIES AND TIMELINES

By using our objectives as a guideline, we created a campaign tailored to address our local Walgreens' challenges
of declining sales. Our aim is to engage the Gen Z audience to boost sales, improve the shopping experience,
alleviate employee burnout, and address concerns related to the Pharmageddon crisis. The strategic campaign,
known as VITAL, specifically targets the retail pharmacy sector and can be implemented across all Walgreens
locations, benefiting a larger community. This initiative primarily emphasizes the integration and enhancement of
current artificial intelligence processes.

V I T A L
Virtual Care Intelligent Tech Driven Automated Lifestyle
Savings Beauty Pharmacy Personalization

PROPOSED STRATEGIC PLAN 13

 Virtual Care
Partnership

V
Our health is our future and it's natural for questions to arise. Walgreens is committed to
supporting its customers 24/7. However, the current FAQ is not only hard to access, but
causes distress for older customers who cannot read small text and find specific answers
they need. For our campaign, we incorporated a Virtual Health Assistant into their existing
app, leveraging Walgreens’ current partnership with Microsoft. This allows consumers to
obtain answers effortlessly.

With 95 million+ myWalgreens members, it is crucial to adapt a system into the platform that allows all

X
demographics to alleviate concerns at their convenience.
Description of Plan: Walgreens’ current partnership with Microsoft (shown in
Figure 8.1 in appendix) allots for a seamless opportunity to incorporate OpenAI into the myWalgreens app.
Coined as a Virtual Health Assistant, the integration of OpenAI allows for customers to get
answers to any questions regarding the different services Walgreens offers to their
customers. (Figure 5.1)

Features:
Customer Service: Quick and reliable answers to common Unique Feature: Many older
customers struggle with navigating
questions, such as store locator, order support, and more. technology, making it difficult for
Personalized Recommendations: Suggests products based them to utilize the myWalgreens
platform. To address this, the Virtual
on previous purchase history. Health Assistant offers voice
activation, allowing seniors to
Hiring Questions: Provides details on job applications and interact with the system through
company policies. Streamlining the hiring process. speech instead of typing. In
hindsight, this makes Walgreens a
Health and Wellness Advice: Personal care, nutrition, more inclusive platform compared
to its competitors.
household essentials, and more.
Drug Analysis Explanation: If a consumer is taking multiple
medications and experiences a negative reaction, the
chatbot can analyze the interactions between the drugs to
identify potential causes.
Figure 5.1 - Mock pop-up of the Appointment Scheduling: Vaccinations, Health Screenings
Virtual Health Assistant through Promotions and Loyalty Program Information: Information
the myWalgreens app.
about ongoing sales, coupons, and special offers. Figure 5.2 - Full-screen chat view
OTC Suggestions: Consumers can ask about medication details, dosage instructions, with disclaimer at the top and
adjustable volume and speak
and potential side effect explanations through health portals, along with personalized button highlighted in a blue circle.
over-the-counter (OTC) medication suggestions that avoid allergens.

Intelligent Savings
Artificial Intelligence is a household name in 2025--so why shouldn't it be integrated at

I
the store that is the heart of every neighborhood community? To boost in-store
engagement and offer an additional incentive for customer loyalty, we are excited to
introduce WalPerks. This AI-driven kiosk and couponing system is designed to enhance
shopping efficiency. Exclusively available for myWalgreens members, these self-checkout
kiosks are customized for Walgreens’ loyal customers. Targeted towards busy, fast-paced
Millennials and Generation X, these kiosks will revolutionize the shopping experience.

Description of Plan: The WalPerks system (Figure 5.3) is strategically placed near
the store entrance, where customers can easily access it. Upon entering, myWalgreens
members can unlock their personalized experience by scanning the barcode in the
app, entering their email or phone number, or using their Walgreens card. Once Figure 5.3 - WalPerks system
activated, WalPerks offers various benefits that enhance both the customer and employee experience. This
includes an AI-powered Smart Cart that sync shopping lists with a digital assistant, guiding customers through the
store, suggesting budget-friendly alternatives, and applying instant discounts. Additionally, the system scans
competitor prices in real time and offers price adjustments and personalized deals. At the kiosk (Figure 5.4),
customers can easily insert newspaper or printed coupons. Using AI-powered image recognition, the kiosk
validates and applies discounts while discarding the physical coupon, eliminating manual entry.
PROPOSED STRATEGIC PLAN 14
 This is especially helpful for elderly customers who struggle with clipping
and applying coupons correctly (Figure 5.6). The kiosk also features a
voice-activated assistant for hands-free navigation, particularly useful for
those with visual impairments. Designed with a sleek interface
(Figure 5.5), the kiosk caters to individuals with fast-paced lifestyles,
helping them avoid long checkout lines and retrieve personalized digital
coupons. Additionally, it offers express checkout for prescription refills,
allowing customers to scan a QR code from their myWalgreens app and
pick up medications instantly. This innovation reflects Walgreens'
commitment to the idea that time is money and that Walgreens is here
to make every visit smoother and stress-free.

Figure 5.4 - Customer utilizing the “Manually applying coupons for “I always get confused about where to
WalPerks Kiosk. every customer is exhausting. It put my coupons and when they expire I
eats up time I could spend on . mix up old ones with new ones from
The integration of more efficient tasks like stocking . the paper. Also, the fine
WalPerks will also help inventory. I wish there was an print is hard to read to .
alleviate employee easier system for this.” . know if they apply.”
burnout (Figure 5.7). The -Jin Yu -Bonnie Noma
VITAL strategic plan aims Figure 5.7 - Walgreens employee expressing his Figure 5.6 - Walgreens elderly customer focus
to connect real concerns to concern. group participant. Figure 5.5 - Example
WalPerks Kiosk.
solutions maximizing the impact this AI solution has on both employee and customer experiences.

Tech-Driven Beauty
In Phase 4 of the research plan, discussions with various focus groups and employees

T
reveal that Walgreens is struggling with in-store foot traffic. It has become increasingly
challenging to engage younger audiences, with approximately 87% of Generation Z (from
survey) stating they prefer shopping at CVS over Walgreens. To effectively attract this
demographic, it is essential to identify the competitive advantages CVS is utilizing and
explore how Walgreens can compete with them. To draw in younger customers and boost
sales, Walgreens should introduce an AI-Integrated Mirror in their locations.

to Try!
Description of Plan: This high-tech feature will give
ich Product
Select Wh
Walgreens a competitive advantage by offering virtual
makeup trials, personalized recommendations, shade
matching, and data-driven promotions. By reducing reliance
on in-store beauty consultants, Walgreens can lower labor
costs while increasing foot traffic and enhancing the overall Mirror can be placed
shopping experience. Thus, Walgreens can save approximately here in our local store at
$15.66 per hour per employee. This integration is crucial, as younger the center of the aisle.
Figure 5.8 - Prototype customers (Millennials & Gen Z) are more likely to buy on trend items (Figure 3.7) and are
demonstration of AI-Integrated
Mirror usage.
eager to buy drug-store affordable alternatives.
The majority of CVS sales come from this demographic, emphasizing the need for Walgreens to introduce an
engaging experience that drives foot traffic. Users have the option to create custom skincare and makeup bundles
tailored to their skin type, selecting products like moisturizers, cleansers, toners, and more. The AI-Integrated
Mirror analyzes individual skin concerns to recommend the best combinations, ensuring a personalized
experience. This interactive process not only enhances the shopping journey but also attracts customers to visit the
store for an exclusive, hands-on experience.
This is where the AI-Integrated Mirror (Figure 5.8) becomes a game-changer. Utilizing
AR (augmented reality), customers step into an immersive and interactive experience
by answering a few on-screen questions about their preferences. Within seconds, they
receive personalized product recommendations tailored to their needs.
Figure 5.9 - Dmitry Kornilov, CEO,
CLICK HERE: AI-Integrated Mirror Demo Video and co-founder of [Link] studio
This enhanced shopping experience has been shown to drive foot traffic in similar retail (AR means Augmented Reality).

environments (Figure 5.9) and has the potential to establish Walgreens as the top neighborhood drugstore for
beauty needs.
PROPOSED STRATEGIC PLAN 15
 Automated Pharmacy
Partnership
Dubbed as the “Pharmageddon” crisis, Walgreens pharmacists have staged multiple

A
walkouts since November 2023, voicing their concerns about being burnt-out and
understaffed. Our local store location employees have expressed concerns about the
insufficient use of technology for managing prescription fulfillment and time management. As
a result, pharmacists often find themselves working overtime on repetitive tasks due to
inadequate scheduling and the immediate demands placed on them by consumers. This
situation is leading to employee fatigue and an increase in turnover rates. In response, AI
enhancements in scheduling and task automation are crucial for employee satisfaction.

Description of Plan: By leveraging AI in pharmacy operations, Walgreens will

enhance drug safety, efficiency, and customer experience. Automated
Pharmacy Integration will optimize prescription schedules based on when
patients pick up orders and fulfillment times, ensuring timely medication
access. AI-driven inventory management will reduce manual tasks, allowing
pharmacists to focus on critical healthcare responsibilities. A customized
prescription schedule with notifications will remind patients to take
Figure 5.10 - Walgreens Pharmacists on strike
medications, preventing missed doses. AI will also double-check for drug
interactions to increase patient safety. Additionally, automated employee “Rushing a Pharmacist can
surveys every three months will assess satisfaction and well-being, ensuring KILL YOU”
management stays informed and proactive in workplace improvements.
By automating tedious tasks and integrating AI-driven scheduling,

Benefits Walgreens pharmacists can better utilize their time and enjoy greater
flexibility compared to a hectic day filled with back-to-back vaccinations.
AI-Optimized Scheduling By implementing this system to track allocated time for various tasks,
Walgreens can reduce burnout and minimize errors in prescription
Proactive Burnout Prevention fulfillment. As shown in Figure 5.10, a key issue this solution addresses is
the pressure on pharmacists to rush through tasks, leading to increased
Enhanced Accuracy and Drug Safety mistakes and fatigue. Ultimately, this innovation enhances both
pharmacist well-being and patient safety, ensuring accurate and
efficient service.

Lifestyle Personalization
Millions of Americans struggle with dietary restrictions and specifications of products. Yet,

L
navigating aisles to find safe and suitable products can be overwhelming and time-
consuming. WalYou, an AI-powered subsection designed to simplify shopping for customers
with specific dietary and medical needs will alleviate this problem. By integrating AI-driven
product bundling and QR-coded store stickers, WalYou makes it easier than ever to identify
allergy-friendly, vegan, halal, and low-sodium options. This innovation not only enhances
customer convenience but also promotes inclusivity, ensuring that everyone, regardless of
their dietary needs, feels supported and empowered in their health journey.

Description of Plan: WalYou (Figure 5.11) personalizes shopping by creating tailored

product bundles based on dietary preferences, health concerns, and life stages like keto,
low-sodium, pregnancy, and recovery (Figure 5.12). Through a user-friendly platform
Figure 5.11 - System Logo included as a subsection in the already available Walgreens website, WalYou filters
products to align with health goals and seamlessly generates bundles, simplifying the
shopping process. Additionally WalYou can sync with a
Dietary Preferences: Keto, Halal, Health Concerns: Heart health,
customer’s myWalgreens account to provide dynamic, Kosher, Vegan, Low-Sodium, Low- diabetes-friendly, gut health,
evolving recommendations, while in-store QR code Cholesterol, and more and immunity support

stickers offer quick access to personalized options and Smart Bundles for Every Need
WalYou bundling system scans thousands of products and
exclusive coupons. Customers can modify selections, and organizes them into personalized shopping bundles based on:

enjoy same-day pickup at their local Walgreens. Life Stages: Baby food, Sickness Recovery: Cold/flu
Continuously updated with health trends, WalYou makes pregnancy essentials, and relief, post-surgery nutrition, and
pediatric nutrition energy-boosting selections
it effortless to grab snack combos, hair care essentials, or
Figure 5.12
gift bundles in minutes.
PROPOSED STRATEGIC PLAN 16
 WalYou Process Description:

1 2 3 Type your bundling needs.....

A pop-up screen with terms, guidelines, Customers are directed to the platform,
Users can click on the platform
and an option to accept WalYou's access where they can seamlessly use AI to
through the Walgreens website.
to myWalgreens information for search for their desired bundle and
automatically personalizing dietary specify requirements like budget,
concerns. specific brands, and more.

4 5 6 7

A bundle combination pops up, Once the bundle is confirmed,

allowing users to add, delete, or All Done! A personalized
personalized coupons are Customers select their
modify items. Shown here is an experience designed to
automatically applied at preferred pickup or
example of a newborn package. support happy and healthy
checkout. delivery option.
lives for all customers.

May 2025 - April. 2026 Timeline

Initiative Month 1 Month 2 Month 3 Month 4

V Research AI Health Assistant Develop AI Chatbot

I Design WalPerks Kiosks Develop Software For Platform Install In Pilot Stores

T Research AI Beauty Develop AR Makeup Test In Select Locations

Trials
Test in Michigan Stores+
A Plan Automation Process Develop System Troubleshoot
L Design + Develop WalYou Platform Create QR code store Test with Customers
labels

Initiative Month 5 Month 6 Month 7 Month 8

V Market internship through in- Improve AI Launch App Integration
person visits Responses
I Expand Kiosks to 25 Additional Locations Add Self-checkout Improve AI Deals

T Expand Beauty Mirrors to 20 Locations Launch Marketing Campaign Add AR

Enhancements
A Expand Inventory
Automate Prescription Notifications Tracking Optimize Pharmacy Workflow
L Collect User Feedback Improve WalYou Personalization

Initiative Month 9 Month 10 Month 11 Month 12

V AI Assistant Fully Gather Customer Improve Responses
Integrated Feedback Final Rollout
I Implement Kiosks In All Locations Add Loyalty Rewards Optimize System
T Expand Promotions Track Engagement Evaluate Impact

A Full Pharmacy AI Integration Improve Efficiency Finalize Automation

L WalYou Fully Launched Expand Health Product Showcase Customization Final Review
Tracking
PROPOSED STRATEGIC PLAN 17
 C. PROPOSED METRICS OR KEY PERFORMANCE INDICATORS TO
MEASURE PLAN EFFECTIVENESS

OKR Goals:
The purpose is to track the success of the VITAL plan through clear and measurable
targets that monitor progress and ensure Walgreens is focused on improving both
customer and employee experiences while increasing sales.

Objective Key Results:

How does achieving this metric help How will measurable indicators track
Walgreens progress towards their goals? Walgreens' progress toward success?

Virtual Care Conclusion Alignment: Conclusion 1

20% Objective: Reduce customer service tickets related to store locators, frequently
asked questions (FAQ), order support, medication, and general inquiries.
Key Result: 20% decrease in live customer support inquiries for FAQs handled by the
Virtual Health Assistant, reducing wait times and improving customer satisfaction.

+
Intelligent Savings
40% Conclusion Alignment: Conclusion 2
Objective: Improve in-store shopping convenience and customer engagement
through WalPerks, improving efficiency for both customers and employees.

55% Key Result: Achieve a 40% adoption rate among myWalgreens members within the
first year, leading to a 55% reduction in manual coupon processing time for employees.

Tech-Driven Beauty Conclusion Alignment: Conclusion 3

4.2/5 Objective: Attract younger customers (Millennials & Gen Z) by offering a high-tech,
personalized beauty experience through the AI-Integrated Mirror.
Key Result: Attain an average customer rating of at least 4.2 out of 5 stars (as an
improvement from the current rating of 2.7/5) in post-surveys taken 6 months after
launch. The survey would ask customers the likelihood they would choose Walgreens
over CVS to supply their beauty products.

Automated Pharmacy
Conclusion Alignment:
37% Objective: Help pharmacists work more efficiently by Conclusion 4
using AI to handle repetitive tasks and improve scheduling.
25% Key Result: Reduce pharmacist turnover rates by 37% and lower prescription
mistakes by 25% within six months, based on performance and safety reports.
CLICK HERE: Employee Turnover Rates Calculations

Lifestyle Personalization
Conclusion Alignment:
Objective: Make shopping easier by offering personalized Conclusion 5

55% options for customers with specific dietary and health needs through WalYou.
Key Result: Increase customer use of WalYou by 55% within six months, based on how
often people use the personalized bundles, leading to more satisfied customers,
increased purchases, and repeat business.

PROPOSED STRATEGIC PLAN 18

 VI. PROPOSED BUDGET
Budget
(*Annual/recurring costs)
Cost Per Unit X
Activity Annual Costs Costs
Number of Units
V - Virtual Care $66,500
Costs To Develop Virtual Health Assistant
Software development One Time Cost: $52,000
Cloud storage $52,000 X 1 $14,500 Annual Costs: $14,500
Cybersecurity measures* Total Cost: $66,500
Model and data updates*
I - Intelligent Savings $23,043,000
Development Of WalPerks Platform One Time Cost: $35,000
Development of software $35,000 X 1 $8,000 Annual Costs: $8,000
Software updates and bug fixes* Total Cost: $43,000
$4,600 X 5,000 One Time Cost: $23,000,000
WalPerks Kiosks locations currently $0 Annual Costs: $0
without kiosks Total Cost: $23,000,000
T - Tech-Driven Beauty $27,130,600
AI Software
One Time Cost: $86,000
Development of the AI software
$86,000 $33,400 Annual Costs: $33,400
Personalized recommendation system
Total Cost: $119,400
Software updates and bug fixes*
AI-Integrated Mirror
One Time Cost: $27,011,200
Smart mirror display $3,200 X 8,441
$0 Annual Costs: $0
Camera and sensors locations
Total Cost: $27,011,200
AI chip and processor
A - Automated Pharmacy $36,000
Inventory Management/Prescription
One Time Cost: $17,000
Fulfillment Software
$17,000 $5,000 Annual Costs: $5,000
Development of software
Total Cost: $22,000
Software updates and bug fixes*
Patient Prescription Schedule Software One Time Cost: $10,000
Development of software $10,000 $4,000 Annual Costs: $4,000
Software updates and bug fixes* Total Cost: $14,000
L - Lifestyle Personalization $16,500
WalYou Platform One Time Cost: $12,000
Development of software $12,000 $4,500 Annual Costs: $4,500
Software updates and bug fixes* Total Cost: $16,500
Total cost for VITAL initiative on a national
$50,292,600
scale:

The average Walgreens store makes approximately

Cost to implement VITAL initiative for local location: $8,500,000 in sales. The cost to implement the VITAL
plan in a singular location is attainable, however it is
V I T A L more cost efficient to implement this initiative across
$66,500 $47,600 $112,600 $36,000 $16,500
= $289,200 all stores. In 2024, Walgreens made $147.7 billion in
sales and approximately $26.5 billion in profit, so this
plan is affordable at around $50.3 million.
If implemented nationally across 8,441 locations, the VITAL initiative would cost each store approximately $5,958.

BUDGET 19
 Proposed Return On Investment (ROI):
Virtual Care: The Virtual Health Assistant will reduce the need for customer Campaign Cost Distribution
service representatives by 73%. They typically earn between $15 to $17.50 per
hour and will save Walgreens $87.1 million. V=‌
Intelligent Savings: Kiosks with the integration of WalPerks will increase foot traffic I=‌
by 1.3% and increase average cart size by 3.7% because of personalized product
recommendations. This will increase sales by 0.082% or about $48.2 million. T=‌
Tech-Driven Beauty: Walgreens currently employs over 3,500 beauty consultants
A=‌
who earn an average of $15.66 per hour. To utilize an AI-Integrated beauty mirror
would save Walgreens about $82.25 million. Additionally, the newer, younger L=‌
demographic will increase retail sales by 0.67%. This amounts to $394.63 million.
Automated Pharmacy: This initiative will increase pharmacist and pharmacy technician efficiency by a predicted
8%, which would result in a 2% increase in overall prescription refills. In 2024, Walgreens’ pharmacy accounted for
$88.8 billion in sales. Therefore, leveraging AI in pharmacy operations would increase sales by $1.776 billion.
Lifestyle Personalization: The integration of WalYou’s product bundling will increase the AOV or average order
value by approximately 16%. This will increase non-pharmaceutical sales by 4% or by $2.356 billion.

Amount Gained - Amount Spent $4,744,180,000 - $50,292,600

Amount Spent
X 100 =
$50,292,600
X 100 = 9,333%

VII. BIBLIOGRAPHY
"---." Walgreens, [Link]/topic/help/[Link]?tier3Id=0. ‌
Accenture. What's Really Driving Retail Purchasing Today? 20 Feb. 2024, [Link]/us-en/insightsnew/retail/retail-consumer-purchasing. ‌
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establish-strategic-partnership-to-transform‌

VIII. APPENDIX
Consumer Focus Group Questions:
Do you use artificial intelligence in your daily life and what is your opinion on it?
Do you think artificial intelligence can be used to improve your shopping experience through custom
promotions/coupons, AI chatbot, and more?
Where do you mainly shop and for what (Walgreens, CVS, Walmart, etc.)?
Is there anything you would like to mention about your shopping preferences and anything that could be added to
improve your customer experience?
CLICK HERE: Quantifiable Checklist Scale for In-Person Observations
CLICK HERE: AI-Integrated Mirror Demo Video
CLICK HERE: Employee Turnover Rate Calculation

Employee Interview Questions:

What is your current position at Walgreens?
What do you think the main demographic of Walgreens/CVS customers are?
How is your daily workload and is it too much? Figure 8.1 - Microsoft CEO Satya Nadella
Do you think AI is integrated in Walgreens/CVS systems and if not do you think (right), and CEO of Walgreens Boots
Alliance Stefano Pessina (left)
it would improve the working and shopping experience?
-Leveraging this partnership to integrate
What are some ways to improve your workload? AI seamlessly.
Is there anything you would like to mention that was not covered in the interview?

BUDGET/BIBLIOGRAPHY/APPENDIX 20