Dive Brief:

• Walgreens made a series of leadership appointments to fill out the executive ranks in its retail organization under Tracey Brown, president of retail products and chief customer officer.
• The appointments include Linh Peters, previously the chief marketing officer at Calvin Klein, who is set to be senior vice president and chief marketing officer at Walgreens. 
• Walgreens also tapped Luke Rauch, previously chief of staff to CEO Roz Brewer, to become Walgreens' senior vice president and chief merchandising officer; and Bala Visalatha, a former vice president of e-commerce at Walmart U.S, who will become senior vice president and chief product officer at Walgreens.

Dive Insight:

Walgreens brought in Tracey Brown last year for the then-new role of chief customer officer with a mandate to oversee the drugstore chain's customer experience and growth. She had previously headed the American Diabetes Association as CEO and before that was a senior operations and experience executive at Sam's Club. 

Historically, Walgreens has needed help in customer experience. Prior to the pandemic, comparable retail sales were in regular decline. In January 2020, GlobalData Managing Director Neil Saunders said in comments at the time that Walgreens was "doing comparatively little to make itself and its stores more relevant to consumers." 

"In terms of design, configuration and offer, most of its shops across the U.S. look largely the same as they did 10 or 15 years ago," Saunders said then. "This lack of evolution is delivering a mediocre performance. It also means sales are increasingly reliant on the fact Walgreens is a convenient destination rather than because it is proactively drawing in customers."

The company's retail sales in the U.S. improved with the pandemic, as drugstores became a convenient healthcare destination for those seeking COVID-19 tests and vaccines. U.S. comparable retail sales growth in Walgreen's latest fiscal year, which ended before Brown began, slowed down slightly to 1.2% but remained positive (unlike in pre-pandemic years).

In the company's latest quarter, ending February 28, comparable retail sales were up 14.7%. Saunders called out the increase as the "most positive aspect" of Walgreens' performance from the quarter, noting that it was the best result in more than 20 years. 

But Saunders also noted that Walgreens benefited from sales of cold and flu remedies, which performed especially poorly a year ago with many still social distancing, as well as from foot traffic of consumers coming in for vaccines and test kits.  

"Over the course of the past two years there has been little change in the retail proposition and customer views on it have not shifted," Saunders said. "As such, there are few reasons to believe that Walgreens will suddenly see an underlying upswing in its fortunes."

All of that puts some pressure on the new hires. A deeper retail bench could help boost Walgreens' performance. The new hires include two executives, Peters and Visalatha, who have experience from prominent consumer-facing retail companies. 

Brown said in a statement of the new appointments, who are set to begin this month, “As strong innovators in their own right, each have an excellent track record when it comes to successfully identifying white spaces across different customer touchpoints and tracking evolving consumer trends, which will be instrumental as we transform our business.”