Dive Brief:

• Walgreens announced Tuesday it has launched contactless delivery in under two hours nationwide.
• With the same-day offering, shoppers can order 24,000 items from the pharmacy chain, and myWalgreens members can earn and use rewards as well as redeem digital coupons. Delivery fees for the service vary by store, but the company said there is no order minimum.
• Walgreens, which also partners with Instacart, Postmates and DoorDash for delivery, can now drive customers to its website and app for delivery orders, retaining more shopper data.

Dive Insight:

By rolling out the two-hour delivery service, Walgreens expands its e-commerce options as its competitors also look to nab online shoppers with faster and more convenient services.

The new service will have Walgreens store workers pick and pack the orders and then rely on drivers from Uber, DoorDash and other third-party firms for the delivery portion, Reuters reported. Stefanie Kruse, Walgreens' vice president of digital commerce, told the news service that the company wants to reduce the delivery fee, which will be $7.99 in most areas, as much as possible.

During Walgreens' second quarter earnings call in March, Alex Gourlay, the company's co-chief operating officer, said meeting shoppers' needs by offering in-store, pickup and delivery options is a priority. Having same-day delivery services available on its app and website can drive customer engagement and increase the amount of customer data it receives, he noted.

"As we continue to redefine our core omnichannel convenience offerings, we are leveraging the data we generate from it, to determine which additional products and services our customers want, and identify new business models and alternative income streams," Gourlay said during the earnings call.

In February, Walgreens teamed up with Instacart on nationwide same-day delivery after expanding its delivery capabilities in 2020 with DoorDash and Postmates. Walgreens also offers combined retail and prescription pickup, along with same-day delivery for prescriptions.

In November, Walgreens added several pickup options — in-store, curbside and drive-thru — that would have orders ready in roughly 30 minutes.

Before the pandemic, Walgreens began partnering with FedEx on prescription delivery and returns. The retailer hired its first global chief supply chain officer in 2019, signaling a focus on talent to drive change and efficiency in Walgreens' logistics arm.

Several other pharmacy and convenience chains and bundling orders and partnering with third-party logistics services. This week, Uber and convenience e-tailer Gopuff announced an online shop for "everyday essentials." Rite Aid and CVS have also increased their partnerships with delivery companies like Postmates, Shipt, Instacart and DoorDash over the past year.