A Scenic Tour of the Online World

Web Disruption: It’s Not Just Amazon vs. Local Retail

Friday, February 7th, 2014

On Wired.com this week, Marcus Wohlsen offers an interesting analysis on CVS’ decision to stop selling cigarettes. The focus of most coverage has been on what a great corporate citizen CVS is being and how they’re putting principles above profit.

But that’s only part of the story, and the “principles before profit” part is patently wrong.

The article’s title isn’t short on hyperbole: How Amazon Forced CVS to Stop Selling Cigarettes.

Wired.com: Photo: Kristoffer Tripplaar/Sipa USA/AP

His point, though,is that Amazon is relentlessly focused on making it easier and easier to forego a trip to the store. Their drone announcement may have been nothing more than a vaporware-inspired PR stunt, but their mobile app is real, and by letting consumers scan the products in their homes and offices, it turns “your whole house is an Amazon showroom.”

CVS can’t compete with that. They sell commodities. And commodities that few people need to feel, smell or see in person. Amazon and ecommerce in general win on price and selection every time. And as Amazon continues to nibble away at the problem of immediate delivery, CVS has a harder and harder time justifying its physical locations.

Unless it turns those physical locations into something other than “a place for stuff.” That’s exactly what it’s doing. Jettisoning cigarettes is just the most recent move toward turning CVS stores into CVS care centers.

Those care centers are now stocked with pharmacists, of course, but also nurse practitioners whose focus is on your well-being. Cigarettes are tough to defend if wellness is your bread and butter, and CVS has realized that wellness is providing care are what can insulate them from thin margins of commodity business.

But it’s not just local retail that the web is disrupting. Even in B2B transactions, the web is changing expectations about what is and should be available at the click of a mouse, and what kinds of value have to be offered in order to make a more committed kind of interaction – phone, teleconference, in-person – worthwhile. It changes the sales process tremendously. The whole “trusted advisor” model of selling goes out the window if the buyer can gather all of that information herself.

And since a great deal of information that used to require multiple trips out into the real world can now be had right at your desk, typically in less than a few minutes, there’s more and more reason to strengthen your position online with great content and demonstrations of expertise. Don’t fall victim to hubris. Just because Amazon isn’t targeting your industry, doesn’t mean disruption isn’t on the way. It is. It most surely is.

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