Blog: How Walgreens Is Going to War Against Amazon – Investopedia

Walgreens has chosen an alternative strategy, inking diverse partnerships over the years such as grocery stores, health plans, and beauty subscription boxes. Walgreens CEO Stefano tells BI that Walgreens strives to be the place where consumers go as they start to gain autonomy over their healthcare spending, taking away power from insurers and pharmacy benefit managers. 

“At the end, the consumer will be in charge much more than today. They will increase their power and they will be the final decider more than today,” he said.

Walgreen’s new alliance with legacy IT company Microsoft makes the tech company Walgreens’ official cloud partner and grants it full management of Walgreens’ data storage. Further, Walgreens employees will now use Microsoft 365 for their office software. Microsoft because it was willing to treat Walgreens as a partner rater than a consumer, per BI.

On the consumer side, Microsoft and Walgreens plan to test out health offerings, including 12 pilot “digital health corners,” where it will sell consumer health devices and software for tracking weight and exercise.

Walgreens’ deal with Microsoft should expand to involve the retailer selling Microsoft tech products at its stores, much like Amazon promotes its hardware via its hundreds of physical Whole Foods stores. Much like CVS Health’s planned health hubs, which incorporate clinical services, blood work, a “care concierge” to help customers understand their health insurance and wellness devices, the partnership will provide physical spaces to manage chronic conditions and educate patients about their medication.

With Alphabet’s Verify, Walgreen’s plan is to offer a “virtual diabetes program” from Onduo, a venture formed between Verily and Sanofi, to Walgreens employees. The partnership also makes Walgreens the storefront in which Verily eventually sells its products currently in development. 

Despite the advantages that Walgreen’s recent partnerships may offer, it remains unclear whether teaming up with Microsoft and Alphabet, as big as they are, will be enough to fend off Amazon. The big risk is that Amazon, with its deep-pockets and already sweeping dominance across industries, will force Walgreens to spend more capital and offer lower prices, thus hurting profits and revenues, dragging down its share price as a result.