Walgreens is closing down Drugstore.com and Beauty.com in an effort to focus on walgreens.com.
The shutdown is expected to be completed by September, the company said Thursday. Walgreens has focused it attention over the past year on enhancing its omnichannel presence and capabilities, including improvements to user experience on walgreens.com, expanding its digital coupon offerings and providing digital tools in-store. “Expanding on these efforts is an important part of our strategy,” said a company spokesperson.
Walgreens acquired the sites along with Skinstore.com in 2011 as part of a $429 million deal, allowing the drugstore behemoth to absorb new digital technology for a stronger e-commerce approach. The Hut Group, which is based in the U.K. and operates lookfantastic.com and myvitamins.com, bought Skinstore.com from Walgreens earlier this year.
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Industry sources say it makes sense for the company, which posted $76 billion in retail sales last year, to shutter Drugstore.com, which offered the same products as Walgreens but no Walgreens brand awareness for customers.
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“Physical stores coupled with digital is really where the true opportunity is,” a source told WWD, who noted the increasing importance of omnichannel strategy for retailers. “Getting those customers, getting them on the app…sending them to another site isn’t the greatest idea.”
For now, Walgreens has not revealed plans to sell either Beauty.com or Drugstore.com, opting simply to close them down and leaving some brands — particularly prestige lines on Beauty.com — in a lurch.
“There’s a little bit of panic because [some] did significant revenue with Beauty.com, and now they’re wondering if that business is gone before the start of the fiscal year,” an industry source told WWD, noting that it’s possible walgreens.com could try to hold on to its relationships with some prestige brands currently being sold on Beauty.com. “[That business] is gone unless they’re willing to go to walgreens.com, which I’m guessing they aren’t.”