Inverting & Diverting my Path to Purchase

A few years ago, while at the podium at a shopper marketing event, I was suddenly interrupted mid-sentence by a loud beeping sound from my pocket. It was an app alert on my smartphone. Since all 600 people in the room could hear it through the sound system, I had little choice but to stop the speech, pull it out of my pocket and fumble around switching it off. “Um … that was Walgreens calling,” I told the audience. “They’re reminding me to take my pills.”That moment pretty much epitomizes my strangely complex relationship with the Deerfield, Ill.-based drugstore chain. Sure, I’m just a shopper and it’s just a retailer. But I’m a patient, too, so it functions like a medical assistant. And yes, I’m absent-minded, so it chases me around like a nanny.When you have a messed up medical history like mine, the cranial space reserved for batting averages, “Godfather” quotes and grand-nephew names eventually is displaced by a lot of syllables with hydro, panto and inopril in them. Every Sunday I take a week’s worth of pills out of brown Walgreens bottles and sort them into a green Walgreens diary case. Every third Sunday, I go to my Walgreens app and scan in the reorders for the month. By 10 a.m. Monday, “Wags” (the name some old-timers still use) starts texting and calling me to pick up. I often mute these calls and feel a little guilty about it, which means … yes, we’re in a relationship.And as with any serious relationship, I occasionally have to lie to Wags, claiming I don’t have a loyalty card if I’m buying something my real wife deems unhealthy and I don’t want it on my permanent record. We have spats, too, such as the time the Wags’ POS register in front of the Wags’ cigarette rack asked me to donate to the American Cancer Society.But now I fear I may have to break up with Wags. Walgreens reportedly is considering an “inversion,” a corporate tax transaction in which an American company incorporates overseas by acquiring a foreign company with the buyer then becoming, in a sense, a subsidiary of a foreign parent.Inversions are all the rage in the pharma business these days. Walgreens would join in when it completes its purchase of Bern, Switzerland-based Alliance Boots, projected for early 2015. It would then move its HQ from Deerfield to the land of fondue and chocolate. According to experts cited by the Chicago Tribune, Walgreens would still pay some U.S. taxes after the inversion, but about $2.35 billion less than it would have in the first three years alone. The Tribune also cited claims by critics that almost one-fourth of Walgreens’ sales come through Medicaid and Medicare.“Ironic” is probably the mildest term one can apply here. “Dreadful” was the word used by one longtime retailing expert I talked to. “Rotten” was the reaction of my family doctor – a guy who once saved my life.From everything I’ve read, it seems that Greg Wasson and his fellow Walgreens executives up in Deerfield know how awful this all looks. But they are under enormous pressure from a newly powerful board member, Stefano Pessina, the executive chairman of Boots, as well as an array of hedge fund managers and Wall Street types. Pessina moved Boots’ HQ from London to Switzerland, so he knows that there’ll be protests, and his experience suggests they’ll pass.Might American shoppers really push back, however? I was surprised that Target’s foot traffic dropped off so dramatically in the wake of its security breach; I didn’t think the average American followed the news that closely anymore. But the Walgreens “inversion” angle seems just a little too abstract to keep their attention for long.Meanwhile, an InContext Solutions study of displays arranged in the shape of an American flag found that some shoppers “were hesitant to take the products for fear of ruining the flag” and that “a small portion … found the display unpatriotic.” My guess is that we’ll see only a “small portion” of shoppers protesting at Walgreens too.While I admire The Container Store’s promotion of “Conscious Capitalism” (see whatwestandfor.com/thrive), I shop there only because they stock certain items that no one else does. The same cannot be said, however, for dear old Wags. Still, the alternative isn’t as easily accessible, the layouts aren’t as familiar, and that carpeting remains curiously off-putting. So I’ll remain loyal to Wags, I guess, but the moneymen are reducing it to just a marriage of convenience.Bill Schober is editorial director of the Path to Purchase Institute. He can be reached via e-mail: bschober@p2pi.org or phone: 773-992-4430.

P2PI MEMBERS

JOIN P2PI

You May Also Like

Member Spotlight (March-April 2024)

Jump-Starting 2024