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How Walgreens is using HoloLens 2 to provide a fresh retail experience

As Walgreens embarked on plans to create a new type of retail experience for customers more than a year ago, it realized that an innovative approach to training employees was in order.

Walgreens employees were used to consulting with customers on the best beauty products, filling photo orders, dispensing medications and providing personalized health and wellness information. But selling fresh produce, delivering groceries to vehicles and helping customers find ingredients for dinner — that was all new, and potentially challenging.

So to prepare employees to handle around 2,500 new food items at its revamped “Kroger Express” stores, Walgreens is piloting an immersive, mixed-reality training program using Microsoft HoloLens 2 and tablet devices.

The program, part of a broader partnership with Microsoft, will use a three-dimensional model of the reconfigured stores and various scenarios to teach employees how to restock products, determine if an onion or banana is past its prime, help customers redeem grocery coupons and deal with unfamiliar customer service situations — for example, offering a substitute grocery item if something the customer wants is out of stock.

“We feel that this very immersive, interactive technology helps team members grasp new ways of learning beyond what I’ll call the paper exercise,” says Steven Lamontagne, vice president of physical design and formats for Deerfield, Illinois-based Walgreens Boots Alliance, Walgreens’ parent company.

The HoloLens training, developed by Microsoft partner Altoura, is first being tested at a Walgreens store in Knoxville, Tennessee. From there, it could be expanded to another 34 stores in Knoxville and 17 in Northern Kentucky and the greater Cincinnati area that are part of a pilot with supermarket retailer Kroger. About 20 Kroger Express stores have opened since the pilot launched in late 2018.

The Kroger Express stores are being remodeled to accommodate the new products, and Lamontagne says HoloLens 2 training offers the benefit of familiarizing employees with the new store layouts even before renovations are finished.

“By using a 3D model for the store, a team member gets to see what the future is going to be like after their store’s remodeled, and they’re immediately within that new physical environment,” he says.

The effort is part of a multipronged partnership between Walgreen Boots Alliance and Microsoft, announced a year ago, that Walgreens envisions as transforming the modern retail and pharmacy experience. As part of the partnership, Walgreens and Boots stores — located in the U.K. and other regions — are migrating their on-premises data warehouses to Azure to improve operations and lower costs.

Walgreens Boots Alliance is migrating on-premises data warehouses into Azure Synapse Analytics — a service that merges enterprise data warehousing and big data analytics — to improve operations and modernize business processes.

The company is also using Azure Synapse to bring together data from disparate sources to understand customer needs and optimize supply chains. Azure Synapse will enable Walgreens to analyze vast amounts of data in real time while applying machine learning to get insights that help employees provide customers with the products they want while preventing unsold inventory from cluttering the back office.

The revamped Walgreens stores are also implementing an anonymous shopping path system, developed by Microsoft partner Acuity, that uses Bluetooth beacons on carts and baskets to understand how customers are moving through the reconfigured stores. That data is then aggregated in Azure, and Microsoft’s Power BI visualization tool is used to identify patterns — for example, how customers are shopping during the holiday season — and help determine whether the new store formats are meeting customers’ needs.

For now, the most visible aspect of the partnership with Kroger will be the rows of grocery items alongside the cosmetics and pharmacy goods. The Kroger Express stores will carry produce staples, dairy, meat items, meal kits and organic products. Customers can also order groceries online and have them delivered curbside at the pilot stores.

With more than 9,200 Walgreens stores around the United States, close to 78 percent of the U.S. population lives within five miles of a Walgreens or other Walgreens-owned store, Lamontagne says, so giving customers the opportunity to purchase food items made sense.

“If you think about the high-frequency purchases you make in your life, food tends to be one of them,” he says. “Having a range of Kroger products and leveraging their expertise within the Walgreens box really gives customers a new retail experience. This allows them to be able to fill their pantries and their fridges, and get a credible range of products to make a meal for their family.”

Read more about the progress Walgreens and Microsoft have made in the first year of their strategic partnership at the Walgreens Newsroom.