Walgreens is deploying micro-fulfillment technology.
A major drugstore chain is reportedly the latest retailer to turn to robotic automation, in an effort to boost prescription-filling efficiency.
According to CNBC, Walgreens is currently operating an automated micro-fulfillment center in the Dallas area, specifically focused on rapid fulfillment of customer prescription orders. Micro-fulfillment centers use robotic technology to automate tasks such as picking and packing, reducing the need for manual labor and also enabling more inventory to fit into a smaller space.
Walgreens told CNBC that each robot in its micro-fulfillment center can fill about 300 prescriptions per hour, or the typical amount of orders an in-store Walgreens pharmacy can fill in a day. The company expects to open 22 pharmacy micro-fulfillment centers across the U.S. by 2025, by which point as much as half of its total prescription volume could be automatically filled.
Human pharmacists will continue manually filling prescription orders that involve controlled substances and/or are time-sensitive. CNBC reports that chief Walgreens rival CVS is also using micro-fulfillment for some prescription orders.
“We’re doing all of this work, so that the pharmacist has an easier job, so that they can get back to being front and center, building a relationship with that patient and interacting the way they were trained — the work that they love to do,” Walgreens CEO Roz Brewer told CNBC. Brewer joined Walgreens from Starbucks, where she served as COO, in January 2021. At the time, the company cited Brewer’s “strong expertise in digital and technological transformation” as part of the reason for her hire.
And Walgreens has been undergoing a broad technology transformation. The retailer recently began leveraging the Algolia application programming interface (API)-based search and discovery platform to help shoppers find relevant items available locally. Walgreens intends to use this more targeted product search capability to assist customers using omnichannel shopping and fulfillment features, such as same-day delivery and curbside pickup.
In October 2021, Walgreens announced it was investing $5.2 billion in VillageMD, increasing its ownership stake in the company from 30% to 63%. The investment will accelerate the opening of more than 600 Village Medical at Walgreens primary care and pharmacy practices in more than 30 U.S. markets by 2025 and 1,000 by 2027. More than half of the locations will be in medically underserved communities.
Walgreens has also taken technological steps such as unveiling an interactive COVID-19 tracker. In its first quarter fiscal 2022 earnings report, the company cited its continuing push into health care and topped analyst expectations for net income (swinging from a year-earlier loss) and total revenue. Digital sales in the U.S. jumped 88%.
However, Walgreens also warned that it will spend $120 million more on wages to keep up with demand and compete in a very tight labor market – demand that warehouse automation could presumably help mitigate.
Based in Deerfield, Ill., Walgreens operates nearly 9,000 retail locations across America, Puerto Rico, and the U.S. Virgin Islands.