Walgreens’ ill-fated Cooler Screens partnership reveals in-store retail media challenges

The news: Mediocre technology and outdated store infrastructure doomed Walgreens’ partnership with smart screen provider Cooler Screens, according to a Bloomberg report. That forced the former to halt its in-store retail media push, leading to a costly legal battle between the two companies.

The takeaways: The contentious court fight between Cooler Screens and Walgreens has delivered a number of revelations on the potential pitfalls of in-store retail media.

• Measurement can be unreliable. While Cooler Screens’ CEO, Arsen Avakian, claimed its displays resulted in 100 million monthly impressions and boosted sales, insiders questioned those numbers. The sensors on Walgreens’ smart doors often mistakenly counted employees’ bathroom trips, abandoned shopping carts, and even shadows or beams of light, making accurate measurement difficult.
• Having up-to-date infrastructure is vital. Walgreens’ aging store infrastructure often led to power surges that distorted displays or caused them to go dark, making it difficult for Cooler Screens to identify malfunctioning screens and adding to shoppers’—and the retailer’s—frustrations.
• Reliable technology is also a must. Internal cameras used to detect and dim out-of-stock items were often unreliable, and product images were often misaligned with the coolers’ contents.

On top of that, the debacle showed the importance of choosing your partners carefully. At one point during the drawn-out court battle, Cooler Screens cut the data feeds to more than 100 Walgreens stores in Illinois, making it impossible for shoppers to see inside the fridges. The move may have hurt the retailer’s sales during the 2023 holiday season, its lawyers suggested, and was “a brazen pressure tactic” to force Walgreens to agree to Cooler Screens’ demands.

Our take: The acrimonious end to the partnership between Walgreens and Cooler Screens illustrates the challenges retailers face when attempting to integrate retail media into their in-store operations—particularly the importance of ensuring such initiatives don’t disrupt the customer experience.

While the digital screens did result in some memorable campaigns, they garnered more attention for their frequent outages—which, alongside locked displays, made the struggling retailer a less-appealing destination for shoppers.

Go further: Read our report on In-Store Retail Media.

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