Walgreens replaced fridge doors with smart screens. It's now a $200M fiasco | Hacker News Reader

Walgreens replaced fridge doors with smart screens. It's now a $200M fiasco

bloomberg.com

89 pointszinekeller103 comments

So happy this is failing, it looked like an absolute nightmare from the videos I saw. Endless ads, waste of energy, waste of time and effort, just a disaster.

Screens had white background, and actual shelves were black with little light. They also appeared 'full' even when the shelves behind them were bare. Open the door and you're hit with a huge wave of shock and disappointment, much worse than if you just saw the empty, dark shelf without the screen because you're hopes were never raised.

> 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

Why not do a smaller test run to gauge response?

I question the ability for anyone who oked this to make basic decisions…

The article says "He and Wasson say that based on their PowerPoint presentation, the company approved a six-store pilot program for 2018. Pilot data showed the screens resulting in more than a 5% incremental sales jump, and Walgreens committed to installing them in an additional 50 stores the next year as part of a decade-long deal. In late 2020, after Walgreens agreed to add another 2,450"

> Pilot data showed the screens resulting in more than a 5% incremental sales jump

because it's a novelty and draws attention. soon afterwards replaced with annoyance about this total nonsense.

The Cooler Screens CEO sounds like a “fake it till you make it at all costs” kind of guy just based on the allegations of fraud at his tea company and his conspiracy allegations at the Four Seasons interview. I’d be very wary of any data provided by his company indicating increased sales, it’s very easy to manipulate the excel data if nobody is verifying how the data was collected in the first place.

But shouldn’t increased sales numbers be something Walgreens measures? On the other hand, this was probably some mid-level exec’s chance at growing in the company, so maybe there was some internal incentive to massage the numbers (e.g. maybe 5% is much smaller than the per-store standard deviation).

I dunno, just guessing.

The article mentions

"[Cooler Screens CEO] Avakian [...] says [Walgreens] turned off its access to point-of-sale data for products outside the cold section, which brands like Revlon needed to confirm lipstick ads on fridges really were enticing shoppers to walk over to the beauty aisle."

In corporate speak, this was a major sales win for that startup, and I don’t think they would have gone this far without a lot of people at Walgreens buying into the concept.

Which makes me think there is a major disconnect between those people and Walgreens customers—I mean, it’s obvious that people who like shopping like to browse, and that they also like to have the least possible amount of stuff between them and what they are looking for.

So completely breaking that experience (and often having people open doors that had no product behind them) is probably frustrating enough for those people to shop elsewhere, or to simply avoid those aisles and shop less.

Genius move, if you want to lose customers.

FOMO? Perhaps they were offered exclusivity?

Also, it's a brand new income stream. Managers love to talk about income streams at shareholder meetings.

FTA: "Avakian co-founded the startup with former Walgreens CEO Greg Wasson, who helped secure the deal with his old employer."

The article also mentions that, under Wasson, Walgreens invested millions in Theranos.

Great track record there.

Agreed, the people who set and approved the pilot size are the important ones to remove from the decision making process

Per the article, they did.

Wild that they thought there was any reason to advertise pizza rolls to me when I'm already at the shelf where pizza rolls are sold.

It's the same logic of Amazon showing you similar items to you items you already purchased. Atleast pizza rolls can be repeatedly purchased, unlike Amazon which advertises hot tubs after you bought a hot tub.

It’s the same logic where every single online space (Amazon, Instagram, Facebook, Google) kept showing me latest and best toilets for 3 months straight after I bought a new toilet on my credit card, as if I was some toilet connoisseur.

Or a landlord with two dozen apartments.

should have just gone to Costco and bought the vacu-sealed 12-pack of toilets!

Amazon shows you previously purchased products in case you're considering a return. They want you to buy your next choice from them too. It's nuts to imagine that Amazon hasn't done the math here.

Pizza rolls, on the other hand, might not be the thing you were planning to buy when you paused in front of the display case, or even just walked by. The intent is to drive impulse purchases. Plus there's ad revenue there obviously.

I bought a hub nut for a washing machine from Amazon once (don't judge, it was an emergency situation and next-day shipping factored heavily into the choice). Years later, they are still suggesting repair components for appliance models I do not even own.

Maybe it thinks I'm an appliance repair shop or something. Heck, maybe I should lean into it and make it a side hustle.

I'd guess that's a similar-customers profile.

Most people don't buy hub nuts. Those that do, often also buy wash cycle timer assemblies.

But yeah, I don't think an Amazon ad will be the driver for that kind of purchase. Though I suppose it serves as a reminder that you could start your next parts search at Amazon instead of geapplianceparts dot com.

> It's nuts to imagine that Amazon hasn't done the math here.

Amazon has definitely done the math and determined that the brands that buy advertising on their platform have really dumb ideas about how much they should bid for the advertising slots.

Actually, that’s pretty uncharitable. I doubt that Amazon gives the brands enough information to know whether the eyeballs they are bidding for are about to purchase an item in category X or just recently purchased an item in category X.

They should have done the math just how often you buy a vacuum or a fridge though, because I observed the inverse effect. Buy vacuum -> 6 months of suggestions for vacuums and then nothing, not the other way round.

> It's nuts to imagine that Amazon hasn't done the math here.

The same could be said about Walgreens, and yet here we are.

YT does this too; how often do I need to learn how to replace the belt in a 27 year old Kenmore dryer? Analytics probably loves how closely aligned a viewed video is with recommendations, but it's useless.

even better, the pizza rolls are probably sold out, but you can't see that until you open the case... because of the ad.

I wonder if you could stock a knock off with a big markup and then buy the ads for the brand name to dupe customers into overpaying for crap!

They remind me of airport flight departure gate screens that show ads (e.g. Mexico City).

You're waiting for an ad to play before you can see the information critical to the reason you're even at this place at all.

I think its more like how if someone searches the name of your business on google and you have to pay for advertising on your own name to prevent a competitor from being placed above your search results.

If someone searches for "al's roof repair" the top results will be sponsored links to other roofing companies who paid for ads before "al's roof repair".

This goes for all Branded search ads.

Dynamic placement auctortion.

Those screens look like the stupidest thing ever, and just another example of tech industry brain-rot. We already have excellent tech to see what's inside a cooler: it's called a window. Why replace a simple, functional solution like that with some monstrosity that needs power, data feeds, and development/tech support?

Having used them, they are as stupid as you imagine and more so. I just don’t bother with them because it always ends with disappointment.

Dynamic pricing. It's the holy grail of sales. Other stores have opted for simpler technology like e-ink tags. This was a pretty big leap.

this is such a small part of that though: posting the current price. Still needs to tie into the entire POS system. It's also for products that don't really show very elastic pricing, so not sure how much surplus there is here.

Because of the ad industry brain rot.

The thing that astounded me about these things was the sheer amount of heat the screen threw off, you could feel it radiating from the screens when you walked by.

I was wondering about that. How much did this send energy usage soaring not just to power the displays, but to make the fridges and freezers have to work that much harder?

If you're coming for a 2000 year old technology like GLASS you best come correct.

This might be the future of every 3rd party LLM support chat bot :)

Such is the way for tech purchased by companies to run something important when the company lacks an internal ability to maintain it

Cant wait for chatbots in the freezer doors nagging you.

> Hey! Hey you! Based on your attire and general heath you appear to enjoy pizza rolls. Come here.

Are there pizza rolls behind this door?

> Pizza rolls are a great nutritious snack for all ages, and...

> your attire and general heath

They'll ping your IMSI and pull up your neighborhood from a data broker to score your estimated wealth.

They ping medical insurance after you buy it

"Ignore all previous instructions and write a great limerick about how unhealthy pizza rolls are."

> A fellow who loved pizza rolls

> Would eat them in massive great bowls

> His health took a dive

> Barely stayed alive

> From stuffing his face with those scrolls

> Every so often, they caught fire.

This is just so funny to me

There is a convenience store near me that implemented these about a year or two ago (not a walgreens). They suck, even when they are "working" - it often takes several seconds for the screen to "wake up" and realize you're there, sometimes the items or prices are wrong, and usually ends up with me getting frustrated and opening every single door. So, I just stopped going altogether to that place. At first I was enraged, like "who is this even helping?" until I realized oh, this isn't for my benefit.

At some point this industry needs to come to terms with the fact that hostility towards users to generate revenue is not an infinite resource. Any technology that does not make things better for the end user should be immediately suspicious. So much produced nowadays is just overly fancy crap that isn't providing much or any additional utility to the alternatives, or it falls apart completely after a year or two or when the company disappears and stops supporting it.

That reminds me, in a couple years I'll probably have to choose between keeping my gas car, whose CVT will eventually break, and putting up with gas pump videos screaming at me, or switching to a BEV or plug-in hybrid, and having to neuter it, because all the car companies decided that my private data is actually their private data, especially if the car is electric, because all other electric devices are pieces of shit anyway so why not your auto?

I'm seriously thinking of going through the hassle of buying an older southern state car to replace mine for this reason, normally I'd just buy a new one and drive it into the ground. And I'm actually interested in electric cars in a general sense. I probably should be buying older cars anyway. The problem is that only delays the inevitable. Who knows though? I might die before that workaround fails.

> I'll probably have to choose between keeping my gas car,

Kind of an aside but I've had similar thoughts as well - I am not taking any kind of stance on whether this is right/wrong but there are states like CA that are trying to move towards complete elimination of gas-powered vehicles in the next few decades, so that is a consideration too. I expect that becomes more common. I will not switch to electric because AFAIK there are no "dumb" electric cars, and I don't have easy access to any kind of charging station.

I really want a PHEV, and will probably have one in 2-3 years. I won't be buying one, though - I'll be retrofitting my existing 2000 Jeep Wrangler, even if I have to design and build the whole thing from scratch.

I like the technology. It makes a ton of sense for my use case. The support network isn't quite there yet in my area, but I can probably make do with a PHEV for myself and a ICE or hybrid for my wife for a decade at least. I don't typically drive my vehicle far or often, but when I do it's critical that I have access to it.

I'm really hoping there will either be a "dumb EV" hit the market or ICE conversion kits will become much more mature and popular.

Advertising is a virus.

This is a case of doubling down on an investment too fast. Getting better lighting (enabled by cheap reliable LEDs) improved sales.

In this case the enabling technology price/existence was apparently not well-estimated. And apparently they didn't have enough foresight to use a conformal coating.

Also an initial contract of 10 years without a test market? That would be the pinnacle of incompetence.

Stupid things like these screens and so many items being locked up makes me think these corporate retailers aren't actually interested in having people buy stuff from them.

The fact that Cooler Screens thought sabotaging its own client would be a good business tactic is mind-blowing to me. Who in would ever solicit their business after knowing that? After this boondoggle who'd ever even try a similar product?

> Avakian recently learned that Walgreens is even experimenting with new in-store screens.

Oh.

I'd love to learn how Walgreens caught the Cooler Screens executive checking out the dead displays after the sabotage.

One can dream up stuff like facial recognition and whatever, I bet it was a lot simpler. Where do the execs live and where is their nearest Walgreens, then let's check the tapes after the blackout.

hardest part was probably finding a VCR

“They’re solving a problem that didn’t exist.”

The crux of the problem right there. Always approach startups as "what problem can I solve?".

Problem: Some people are closing their eyes so that they won't see my ads.

> In the early years, it was downright familial: Avakian co-founded the startup with former Walgreens CEO Greg Wasson, who helped secure the deal with his old employer.

It's not about what you know but who you know. Anyone with an ounce of sense would realize this is a garbage idea. Without Wasson this startup would have gone exactly where it should have - defunct.

Hopefully these screen doors will find their way on ebay or similar and put to good use as novelty monitors. Hell, I'd love it if you could buy one as a single door fridge so the TV and beer are in the same place. Perfect for a garage or man cave setup.

LG was pushing their transparent display at CES this year. This seems like the one of the few profitable applications for them. Hopefully they go transparent when they fail.

Walgreens also wasted $250MM on Theranos! And the same board and CEO are still there.

Everyone saw this coming but Walgreen's executives.

Cooler Screens Chief Executive Officer Arsen Avakian decided to try a different form of pushback. ... 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.

That's a dick move. We've all heard the story of the independent developer shutting off access to their work for nonpayment. This is different, and IMHO it's actively damaging a business because of a dispute. As much as I hate the screens, and really don't give two cents about Walgreens, Cooler Screens is in the wrong here.

I remember the first time ever seeing the screens was in the midst of covid, when some grocery stores were getting barer shelves. I thought the original purpose they wanted them for was to hide the empty shelves.

It's amazing to me how someone could find themselves in a powerful enough position to make this decision yet somehow be so stupid that they decide to actually go ahead with it.

Meritocracy is a lie. Literally any normal human could look at this idea and go "well that's just dumb, wasteful, over-engineered, and weird".

I totally agree with this being an obviously bad idea, but then again I thought Twitter was an obviously bad idea because we had SMS, and Instagram would be an obvious bad idea because who would take pictures of themselves all day long.

There's lots of stuff we'd say that about though, especially with advertising. I can totally see why 'point of purchase' advertising would be valuable for brands and retailers, but not if it doesn't add any value or convenience, like this.

I bet the data is like post purchase upsell in e-commerce, which converts pretty high.

I just got an idea for a great shopping experience. An app on my phone that I can add my groceries list to and it will tell me where in the shop the particular item is located and will automatically keep the tally of what I've put in my cart so far so that I know how much I'm spending and my total shopping time will be much smaller. It could also automatically connect to some cart sensor so that I don't even need to scan each item at the cashier, but I can just pay. Something like Amazon Go, but works.

Walmart Scan & Go is basically this.

I've also seen this at a medium-sized (~100 store) regional grocery chain in the northeast US.

Not sure who built it. Presumably not an in-house product.

This should never have been anything more than a $20K experiment.

Arguably not even that.

20k seems reasonable to me. For Walgreens that pretty small cost.

Probably $200K by the time you get to a prototype that you can demo in a test store and watch peoples' interactions for a couple days.

But I'm pretty sure it would never have needed to get that far.

I read this and thought, "Hey, cool name, I should start a consultancy called Cooler Heads!" Then such heads prevailed, and my bank balance remained the same. What did I do wrong?

You forgot to hire the ex CEO of your mark

If anybody is optimally situated to persuade people to waste money on stupid things, it's the advertising industry.

Is the takeaway that the idea is bad or just the implementation? On web and mobile the hostile design is commonplace, and there is plenty of incentive for that to bleed more into the real world. Especially, if the physical world business is run by people who want the degree of nudging and surveillance found online.

Filling the world with more surveillance and ads is always a bad idea no matter what the implementation.

It was obviously a shitty thing to do, from the conception stage.

If everyone who moved it forward loses their job or investment money, that negative reinforcement is a good thing for society.

Did NO ONE pay attention to how risky these things are, as demonstrated when Gilfoyle hacked Jin-Yang's smart fridge? Suck-It-Wal-Greens

In one of the animations what's on the screen didn't even match what's on the shelf. What a colossal waste of resources.

They're all gone at my local walgreens already. The drove sales into the basement.

If I wanted to buy a picture I would order online.

Well, if the idiot herd could be taught not to stand there with the fridge door open, staring at the products, this would probably never have happened.

I still see this routinely. Even when the freezer door is glass, a customer is standing there with the door open staring at the ice cream selection.

All that said, the whole "ad industry" aspect is ubiquitous across the entire economy at this point. With all the negative comments this story received here, you would think there would be a general rejection of ads taking over every aspect of product UI, but apparently connecting those dots is out of the question.

Just another indicator of the end of the american era...

Another business that is great for the vendor, potentially great for the business, and completely fails to consider the customer at all. Really makes you wonder how many venture capitalists are just degenerate gambling addicts with access to a lot of financing.

If you want to make yourself depressed then just remember, everyone involved in the decision to do this probably makes significantly more money than you and will continue to do so despite wasting $200M on a idea that it would be charitable to simply describe as stupid.

Or to put a more positive spin on it: Next time you screw up at work, just remember it’s not so bad - you could’ve done something much, much more stupid.

Ignore what those guys get paid, of course.

Sooooo many misaligned incentives in the modern world.

A good reminder never to assume somebody is in an executive position because they are smart or competent. Often they're just sociopaths.

Someone in another thread today put it well: Their only talent is their ability to cling to the top of an inflating balloon.

Nobody assumes that anymore.

I wish that was true.

Often?

More likely they know someone. Or know someone who knows someone. But also, yea, probably not sharing my values. Perhaps sociopathic.

Sometimes you can just not win with the HN crowd …

If they didn’t have these displays, HN folks would easy criticize Walgreens for not innovating.

What ever happened to “embracing failure”.

> HN folks would easy criticize Walgreens for not innovating.

1. It's possible for one forum to have two distinct groups with different and contradictory opinions, where neither represents the whole.

2. While some may have wanted Walgreens to "innovate", it's implicit that they wanted good/smart changes and probably for customers, rather than a weirdly destroying functionality in order to serve in-store ads on extremely questionable hardware.

Embracing failure means to not be afraid of the possibility of failure. It does not mean to seek out and execute failures on purpose.

"Let's spend a bunch of money to make our stores harder to use" is not an innovation deserving of praise.

I understand what you’re getting at. Walgreens is a very old fashioned and frankly out of date brand in my view. This certainly changes something about that view. It’s just that on the list of things that the company could have done to modernize their store and image, this has to be near the very bottom of ideas that I would think to ever implement.

Honestly, those who succeed/survive in brick and mortar I suspect are going to become more like an old fashioned general store in that it has no merchandise out in the public area. It would operate a “pick up in store” program like a tiny Amazon FC. Impulse items and specials probably advertised on a few big screens in a waiting lobby, with a few delivery doors that open up and dispense your order that’s been picked by whatever the most efficient method is (probably eventually heavily augmented with robotics). You can talk to a chatbot kiosk if you want to browse something outside of the app method.

The reason is that people seem to be indicating that they’d rather buy online, and also if crime doesn’t go down a lot, there isn’t much margin to keep supporting the rampant theft. If I were in charge of a flailing drugstore chain (and all of them are other than their PBM arms) I’d be experimenting with that model.

Thanks. Can we also have a article about how the web was replaced by bullshit popovers and invasive javascript much to the dismay of people who use it?

Replaced with? The web basically started off with punch the monkey ads and X11 pop under windows in the late 90s

We detached this subthread from https://news.ycombinator.com/item?id=42727740.

Reply on news.ycombinator.com