It’s hard to find a better example of a traditional business that has embraced the API economy—and seen tangible results because of it—than Walgreens. Whether through its Photo Prints API or its rewards and prescription refill APIs, this leading pharmacy store operator has successfully built an array of digital services with an important question in mind: What’s in it for developers?
This “outside-in approach” has paid off in measurable and impressive ways. One of the clearest measures of the success of its APIs: a customer who visits a Walgreens store because of a digital interaction (say, the prescription refill app or an online coupon) spends six times more than a customer who just walks in.
So it’s clear that Drew Schweinfurth, Walgreen’s developer evangelist, has an important role to play in the success of the Walgreens API program, and how that translates into the success of the business.
We recently spoke with Drew about the impact API management has had on the Walgreens business and the critical role it plays in enabling him to do his job.
What was it like at Walgreens before and after implementing API management?
The before and after transition is drastic. When you look at the original way of doing APIs, services, architecture, and management, you maybe have a couple documentation pages or PDFs that are passed around internally to different business leaders and developers.
There’s no real security piece in there either. You have these services you make available only to certain environments inside of your system, right? Exposing those blows the minds of business leaders, who are saying, “Oh I thought we were only giving this to internal people?”
That’s where API management comes in. You say “OK, get your external developers set up with an API key. Have them come in to use your services that are setup through proxies in this API management software and bring them back in to hit the services that your team has built internally.”
Tell me about the “6X spending metric” that Walgreens’ digital program is so well-known for.
Customer X comes into the store, and they know what they need and are going to buy. When we bring them in through our convenient services, whether it’s a photo print, a prescription refill, Balance® Rewards for Healthy Choices, rewarding them with Balance® Rewards points, or even a digital offer like a coupon click—we see them spend six times more than we would have with them just walking into the store. This is a result of the convenience provided by the digital service.
Customers come in for the prescription and then buy Band-Aids, they buy the candy, they buy the soda pop, they buy anything else that we sell in our stores six times as much as they would’ve just walking in. This is really exciting for us because it’s grown not only the value of our store, but it’s grown the value of the API program which provides all these services.
What’s next for Walgreens’ API program?
The ecosystem has had a new service or product added to it every single year. So we started with photo, we went to prescription, we then went into a microservices approach. Rewarding customers for making healthy choices was the third year. This last year we started looking at the retail product space.
We had the digital offer service that allows customers to clip coupons directly to their Balance® Rewards card. In the next year we’re focusing more on that retail product space: looking at how we can utilize the services we’ve built internally to make things like a product search API or product inventory API, allowing developers access to build apps that allow their/our customers to see what exactly is in our stores. I think it’s a really amazing space for us to approach this year.
Explain how Walgreens views and uses microservices.
Microservices are a new way of thinking about service oriented architecture. In the past, you had these giant systems where it’s SOAP requests being passed back and forth between each other and one of the things we focused on is making our services as light as possible and easy to develop on a small infrastructure.
With our Balance® Rewards for Healthy Choices service, we said there are a lot of different moving pieces involved with our loyalty and rewards systems. Everything including patient information associated with their pharmacy account. We said, let’s just scrap this whole idea. Let’s build an OAuth login service that allows customers to log in through third-party applications and connect their account with that application using an access token.
The developer can then make POST requests on behalf of the activity data that’s happening inside of the third party’s application, in turn giving the customer Balance® Rewards points for allowing that connection to happen and any healthy activities that customer makes with their connected device/application. That service in itself, just being a tiny request to send over my step data, send over my blood glucose data, or my blood pressure data and then giving the customer Balance® Rewards points is how we look at building a microservice.
Walgreens is really an amazing story, being a 115-year-old company that has built an industry-leading digital platform. How did it start?
With Walgreens, it’s how do we bring that value back into business models that might not be valid anymore. You have a lot of disruption in the technology space—photo is one of those. If you look back at 2008, we had smart phones. Smartphones came out with a camera on them. People weren’t taking their cameras with film and bringing them to Walgreens stores as much.
We banked on that and said: "Alright, let’s disrupt our own photo business. Why bring the customer into the store twice when they only need to be in there once?" So we built a photo experience allowing developers building apps for smartphones to kind of play into that create, edit, share, or store photos space and connect to Walgreens to print out those photos so we could make a better customer experience for that photo customer.
It’s also a better experience for a developer who says, “I’m building an app. I need to bring in revenue, why don’t I call the Photo Prints API by Walgreens to get that revenue”—and now we’re bringing value back into that photo business and helping grow a third-party ecosystem.
Being on the cutting edge of technology and making sure that we aren’t killing our business is really a big challenge that I think API management has immensely helped out with. I think disrupting yourself is something that you need to do. There’s lots of companies out there that are not technology companies. Long-time companies like Walgreens that have been very successful in the way the economy and society have used their business or their products.
There’s a lot of technology companies now who are coming out of Silicon Valley building things where traditional business models break in older institutions. I think there has to be a fear, an internal fear, that these guys could potentially beat us. So why don’t we focus on breaking our business model and disrupting ourselves to bring value back into our business?
How important is API management to a developer evangelist?
Developer evangelism requires not only a certain attitude toward life and how business works, but also having the appropriate tools you need in order to make developer evangelism happen.
Looking at API management tools—being able to track analytics on your proxies and your endpoints, then getting that information to the business lines where they can say, “Hey, we see the developers are hitting our refill prescription endpoint a X times a second" [enables] the business leaders to say, “Oh wow, that’s actually bringing value into our business.”
Every single one of those requests that comes in is a prescription that gets refilled in our stores, and on top of that, we know that it’s six times the norm being spent by this customer which came in through that channel. Being able to find those stories and using the tools API management software can give you to tell those stories is very crucial.
Drew (in his own words) is a self-proclaimed geek with a passion for mobile and a hard-coded background in web development. He stays motivated by moderate amounts of bacon, beer, and beautiful cities (he claims Chicago is the best). At Walgreens, Drew manages developer relations for the Walgreens API team and also serves as the editor-in-chief of developer.walgreens.com. In the last year he has also taken up the responsibility of developing proof of concept web services and APIs for Walgreens.