Walgreens moves to AI-driven search experience with Algolia

Search and discovery API platform provider Algolia last week announced that retailer Walgreens had joined its customer base and will deploy the solution alongside the Microsoft Azure Cloud platform to help improve the search experience of its customers.

Algolia’s API integrated into Walgreens’ custom front-end architecture to provide an AI-driven search solution that can analyze users’ search terms, predict their intent, and deliver more search results. The intention is to drive an omnichannel browsing experience that enables customers to find the goods they want in less time.

“In the immediate future, Algolia’s API will help Walgreens’ click-and-collect efforts. It’s estimated that, by 2024, click-and-collect (or buy online, pickup in-store) sales will grow to reach $140.96 billion. This movement helps brick-and-mortar retailers compete against the one and two-day shipping of retailers like Amazon — and its push into an in-store pickup as well,” said CEO of Algolia, Bernadette Nixon, in an interview.

In addition, Algolia enables Walgreens to “better tailor experiences for their consumers and predict the types of things people need, not just from their own personal history, but trends in a region,” Nixon said.

“Imagine coming to the website and based on geolocation, if flu is trending, to be able to have a set of results for flu vaccine, testing, tissue box, etc. that are intent-driven selections, but at a macro level as well as based on personal profile and preferences. This will create a deeper level of loyalty and delivery of value that we see brands like Walgreens investing in,” she said.

The provider is part of the enterprise search market, a market estimated at $3.8 billion in 2020 and projected to reach $8 billion by 2027 as technical decision-makers look for new solutions to improve the search experience of on-site customers.

AI-driven search enters the cloud wars 

Walgreens partnership with Algolia comes amid the cloud wars, a technological arms race between modern organizations and retailers to offer seamless digital experiences for customers. Cloud transformation and creating an AI-driven customer experience are at the heart of this race, with organizations trying to build the infrastructure to generate operational insights that they can use to outstrip the competition.

For instance, just a few months ago, one of Walgreens’ largest competitors, Walmart, announced a partnership with Google Cloud in an attempt to better apply API to predict demand, optimize its supply chain, and build a superior customer experience.

As more retailers like Walgreens and Walmart move to the cloud, AI-driven search capabilities are becoming a must-have to remain competitive in the marketplace, as organizations that rely on poorly optimized and less relevant customer experiences get pushed out by those offering a more relevant experience.

A look at the digital search market 

Founded in 2012, Algolia has emerged as one of the leading enterprise search providers and is today in an ideal position to grow throughout the cloud wars era. The organization is currently worth $2.25 billion and maintains a customer base of over 10,000 customers, including some of the world’s leading retailers, like Dior, Lacoste, and Under Armour.

Its flagship solution, Algolia Search, is an API that can automatically extract website content, understand users’ intent, generate AI-driven synonyms, and direct users to relevant results faster.

More importantly, it can also provide product recommendations to customers that encourage further purchases, generating analytics displays of consumer preferences, and ultimately increase an organization’s revenue.

However, many other enterprise search solutions are competing to offer organizations a complete search and analytics solution. One of the most well-known is Elasticsearch, a search and analytics engine that raised $608.5 million in revenue in 2021, successfully working with clients including Adobe, T-Mobile, Audi, and Walmart.

Other competitors include AI search solution Yext, which generated $354.7 million in 2021, and Lucidworks Fusion, which has grown by 200% following a $100 million investment in 2019.

Simplicity may win the cloud search war 

While competing solutions like Elasticsearch offer AI search solutions designed for systems architects with immense configuration options, Algolia instead offers organizations a simplified API-driven approach to help its customers win the cloud search war.

Algolia is attempting to reduce the time organizations need to spend to build a custom search solution and hiring employees with in-demand back-end search expertise by providing a prebuilt search and discovery solution with a lower total cost of ownership.