Walgreens Replaced Fridge Doors With Smart Screens. It’s Now a $200 Million Fiasco
www.bloomberg.com
A startup promised the pharmacy chain its high-tech coolers would track shoppers and spark an in-store ad revolution.

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Where the fridge cases were previously lined with simple glass doors, there were door-size computer screens instead. These “smart doors” obscured shoppers’ view of the fridges’ actual contents, replacing them with virtual rows of the Gatorades, Bagel Bites and other goods it promised were inside. The digital displays had a distinct advantage over regular glass, at least for the retailer: ads.

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These internet-connected fridge panels, developed by a Chicago startup called Cooler Screens Inc., frequently flickered, crashed or showed the wrong products. Every so often, they caught fire. But store managers were stuck with them. As part of a 10-year contract with Walgreens for a split of the ad revenue, Cooler Screens had installed 10,000 smart doors at hundreds of US locations like this one. It planned to install 35,000 more.

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On Dec. 14, Avakian’s team secretly cut the data feeds to more than 100 Walgreens stores in the Chicago area. The dozen or so smart doors affected in each of these stores either glazed over with white pixels or blacked out altogether. Customers could no longer see where the Coke and Red Bull and Hot Pockets and Heineken sat, and either assumed the fridges were out of order or found themselves rummaging through one by one. Some staffers pasted pieces of paper on the opaque screens that read, for example, “assorted sports drinks & coffee.”

  • totallynotaspy@fedia.io
    35·
    9 hours ago

    I would definitely recommend reading the full article. There’s all kinds of hilarious tidbits. Like that the Cooler Screens ceo Arsen Avakian’s leadership seems to be rather fiscally disastrous wherever he goes. Or my favorite bit:

    Avakian discussed the concept that would become Cooler Screens with friends in Chicago business circles, including Wasson [co-founder of Cooler Screens]. As head of Walgreens from 2009 to 2015, Wasson is most remembered for overseeing its fraught international merger with Alliance Boots, a European chain. But he also bet on technology, gussying up its pharmacies with tablets, acquiring e-tailer Drugstore.com and leading the company’s $140 million investment in a then-promising startup called Theranos. (Oops.)

    Jeepers fucking creepers, you would think that Walgreens/ big corporations in general would do some kind of background investigation or get a PI to find out if they have any skeletons in their closets that would prove fiscally harmful if entered into an agreement. Their total lack of operational security and basically saying ‘Yes, Daddy, please?’ when presented with an opportunity from the same guy that dragged the company into the whole Theranos debacle is flabbergasting.

    Wasson set up a demo meeting with billionaire Stefano Pessina, Walgreens’ largest shareholder and his successor as CEO, with whom he remained friendly after departing the pharmacy chain. “‘We’re not tech guys,’” Avakian remembers the Walgreens team saying. “‘Prove it to us.’” He and Wasson say that based on their PowerPoint presentation, the company approved a six-store pilot program for 2018.

    A fucking POWERPOINT is all it took even after Theranos to convince them of this boondoggle.

    • ByteOnBikes@slrpnk.net
      16·
      8 hours ago

      You weren’t kidding! This is a rollercoaster ride of incredible twists and turns!

      The problem, according to three former Cooler Screens executives and a former Yahoo executive, was that their clients thought of the screens as “shopper marketing,” an old-timey ad category that covered in-store promos like the balloons or cardboard displays that clerks hang over cases of beer. Spending in this area was far lower than the more lucrative digital ad rates Avakian hoped to charge. One of the former Cooler Screens execs says that Avakian wanted marketing dollars well above what the industry was willing to pay and that his lieutenants could be preposterously condescending on calls with the Yahoo sales team, which at times devolved into shouting matches. “The Yahoo people hated them!” this former exec says. “Their MO was to ride them [Yahoo] like Secretariat.” (A Cooler Screens spokesperson says that this description is inaccurate and that Avakian’s relationship with Yahoo executives remained positive.)

      Condescending calls with Yahoo sales team. Fucking hilarious.

      • Andy@slrpnk.net
        11·
        7 hours ago

        Agreed. Avakian is fascinating because he’s so entitled in the article. If someone doesn’t want to buy his product he just rails against how unfair they were to him.

        Bro: it’s business. If your product were nearly as good as you claim it is, you wouldn’t need to force people into using it.

        Also, the end of the article points out that Walgreens has been terribly mismanaged and is a very low-performing company, and they’re still experimenting with screens, just not with Avakian. Hilarious.