Walgreens' smart freezer doors were a $200 million misstep

[Shawn Knight]

In context: If you've stepped foot in your local Walgreens at any point over the past several years, there's a good chance you witnessed a technological innovation that's now at the center of a messy legal dispute.

The pharmacy chain started testing digitized refrigerator screens from a startup named Cooler Screens at select stores in early 2019. The idea is simple enough: replace the clear glass doors in the freezer section with digital displays, sensors, and cameras that can be used by marketers to serve targeted ads to shoppers based on factors like age or gender.

The pilot was successful enough that the two sides entered into a multi-year contract, but the story doesn't end there.

Cooler Screens ended up suing Walgreens for $200 million in June 2023, prompting the pharmacy chain to countersue for monetary damages. According to Bloomberg, Cooler Screens had already installed 10,000 smart doors at Walgreens locations across the country and had plans for 35,000 more when the pharmacy chain tried to back out over claims of faulty hardware and software. The publication notes that the screens often flickered, crashed, or showed the wrong products. Some units even reportedly caught on fire.

At one point, Cooler Screens went so far as to cut the data feed to screens at 100 stores in the Chicago area. As a result, shoppers at those locations saw blank screens. Walgreens argued that it may have impacted their sales for that quarter.

A spokesperson for Walgreens told Fortune they were disappointed in the company's attempt to interfere with their customers' experience in certain stores. Cooler Screens CEO Arsen Avakian, however, claimed they cut the feed to get Walgreens to respond to overdue invoices for the tech.

"I got to tell them once, twice, three times, five times, 'Guys, you got to pay the f – ing bill!'" Avakian told Bloomberg.

For now, the legal dispute remains ongoing. Cooler Screens, meanwhile, has undergone several rounds of layoffs, and even rebranded as CoolerX. The company is now focusing on software than can be installed and run on existing platforms rather than also having to supply its own display hardware.

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Walgreens' smart freezer doors were a $200 million misstep

 

[godrilla]

It would have been more cost effective to put in smart vending machines at this point.

 

[BadThad]

Some old school things like transparent cooler doors should be left alone. If it ain't broke...

 

[airbornex]

The idea of targeted ads on fridge doors was already feeling a bit dystopian, but then they added flickering screens, blank displays, and literal fires... turns out, no one wants their frozen pizza purchase interrupted by a tech glitch—or worse, a flaming freezer door.

 

[Neatfeatguy]

Digital menus are okay if they're displayed and used properly. They help cut down on time at the venue because you don't need employees changing information on them or taking time away from employees so they can focus on other tasks.

Using them on a cooler door...that's foolish. You're having a monitor screen on something that is constantly getting touched and moved (open and closing of door) and mistreated (slamming shut, hitting, kicking) by all the hillbillies that don't treat things nice. You're just asking for troubles.

Having worked at a company that started doing digital menu boards about 15 years ago there were always a lot of issues that you couldn't just simply overcome by calling the store and getting someone that works there to help and/or fix the issue:
* If the computer running the board went down, your menu is down. Replacing the computer or troubleshooting it requires some sort of IT technician and not a store employee - so you need your own tech or a third party approved tech to visit the site and troubleshoot.
* If the problem can't be resolved by the tech visit then you need replacement equipment shipped out and then you need a tech to replace it all.
* If the boards are not well ventilated for cold/heat they could fail (the board itself or the computer).
* Maintaining the software on the board is handled by the company for a fee. If you didn't want to pay the fee you had to do the software work yourself and at the time it was a pain in the as$ to do as a customer. Then if you couldn't do it on your own and needed help, you were charged a lot because you're not under contract to have the work done for you.
* Basic technical issues - computer for the board didn't power back on after a power outage, now you have to try and get an employee to locate said computer to power it on or you need to find a tech to do it.
* Cabling gone bad? Need a tech.
* Bad software update pushed out? Ohshit! If it causes systems to crash and you can't remote to them and push corrected updates.... Yep, you need a tech on site to assist.

Digital menus, when they work, they look good. When they fail who the hell knows why it failed and getting it resolved may be more work than an average employee at said store is able to do or willing to do.

I wouldn't want digital cooler doors, that's just stupid.

 

[BobDolesGhost]

If the cooler doors are screens and showing you targeted ads, how the hell are you supposed to know which cooler door to open to find what you specifically want to buy? Sure if you're familiar with the store, maybe you innately know, but if I walk into a random store away from my typical area - do I just have to go down the line opening every door until I finally find my pint of Cherry Garcia?

 

[p51d007]

Wonder if the person or persons that thought up this stupid idea still work for Walgreens, or the company they hired to come up with this silly thing.

 

[RudyBob]

I avoided Walgreen's already and this reaffirms my decision. It's a bad store but kudos to the guy that got them to buy this idea.

 

[toooooot]

So correct me if I got it wrong, the company that created this tech turned off screens to pressure Walgreen into keeping the agreement? If they had a legal agreement, why did they need to behave in such way?
And if it was not legal, who do they have to blame beside themselves.

 

[human7]

So correct me if I got it wrong, the company that created this tech turned off screens to pressure Walgreen into keeping the agreement? If they had a legal agreement, why did they need to behave in such way?
And if it was not legal, who do they have to blame beside themselves.

Sounded like desperation to me. Company's probably only got one major customer, Walgreens, and it's probably running out of cash, a lawsuit to uphold the agreement is expensive (and still pending), so turn off the screens and put pressure on them to pay the bills.

 

[Underdog]

Advertising has become a plague as long as I can remember. I suspect toilet paper will have advertising printed on it soon. Those ad guys won't miss a trick.
Surely people can't be dumb enough to buy something they didn't want just because they see an ad pushed in front of them.

 

[human7]

Advertising has become a plague as long as I can remember. I suspect toilet paper will have advertising printed on it soon. Those ad guys won't miss a trick.
Surely people can't be dumb enough to buy something they didn't want just because they see an ad pushed in front of them.

Oh, they and paper towels already do. When you buy this package, you're not getting 12 rolls, you're getting our super duper sized rolls where 12 rolls = 48 rolls, or whatever. I have yet to find a "regular sized" package in the store (I have not been so curious as to look online, where I'm sure, so that they can claim to have a regular roll, there is one somewhere).

 

[erickmendes]

What if we try an innovative material developed to allow light to pass thru allowing customers to have an immersive experience? It's called glass.

 

[Win7user]

I don't know about the smart freezer doors, but I'd buy that brunette dinner, any time!

 

[BuckarooBonzaii]

Funny thing is people will still open the door no matter if it's glass or a screen just to look inside. I do that just to cool off before buying something.

 

[Tyler Dur Den]

The advertising screen thing sounds very distopian for sure, something you'd see in Cyberpunk 2077. However the bigger concern is that if you're buying groceries or food items at a Walgreens, you're paying very high price compared to a traditional grocery store. If you're a tourist in a tourist area, ok, but otherwise try to avoid buying these kinds of things at Walgreens.

 

[BadThad]

If the cooler doors are screens and showing you targeted ads, how the hell are you supposed to know which cooler door to open to find what you specifically want to buy? Sure if you're familiar with the store, maybe you innately know, but if I walk into a random store away from my typical area - do I just have to go down the line opening every door until I finally find my pint of Cherry Garcia?

The real truth behind why it failed. The screen just t-ed off customers because they couldn't just look through and clearly see what they were after. We've been buying things out of coolers for decades - hell, I get mad when they fog over and I can't see in. LOL

 

[BadThad]

Advertising has become a plague as long as I can remember. I suspect toilet paper will have advertising printed on it soon. Those ad guys won't miss a trick.
Surely people can't be dumb enough to buy something they didn't want just because they see an ad pushed in front of them.

Toilet paper ads! AAAAAHAHAHAHAHAHAHA

Don't give them ideas!

 

[A Tabby Person]

Not mentioned in article, but I think half of W’s initial eagerness lies in price display. When there is a price change, no more having to physically update.

 

[erickmendes]

Not mentioned in article, but I think half of W’s initial eagerness lies in price display. When there is a price change, no more having to physically update.

Thinking about it... (as I'm kinda bored at work....) aggressive dynamic pricing based on user... If they advance this thing to it can track you using your phone the price can vary based on your buying history.... If you buy 4 cokes a day you won't bother to pay 10 cents more in one of these occasions, and if coke supply is low it can also highlight other beverage offers to you...

Like AR version of what e-tailers do... nice, seems like we are doomed, as always.

 

[johnjohn87]

Well, kudos to Walgreens for trying something new. Maybe they'll hit a home run sometime.

I wish their partnership with Theranos had worked out. I'm not saying Theranos didn't turn out to be an awful scam, but my veins are hard to hit and I would be glad if a finger prick could produce enough blood for all the tests.