Amazon.com Inc. (Seattle) has rewritten retailing over the past 25 years. This year, after nearly all states ordered non-essential stores closed and people sequestered in their homes, Amazon has become even more dominant as a purveyor of every manner of household goods.
Need a laptop? The Best Buy store in your area may have been closed, but Amazon wasn’t. Need hand sanitizer? Good luck finding that on the shelves of your still-opened stores. But Amazon’s got it.
I’m a Prime member, and even though most of my online product searches start at Amazon, I’ve really been only an intermittent buyer. But this has changed drastically for me in the Age of Coronavirus. Over the last three months, I have concluded close to 20 purchases from Amazon – perhaps not enough to make Jeff Bezos a trillionaire, but way beyond my normal quarterly activity.
And that’s the even-more-ominous consequence for physical retailing (as if you needed another jolt of reminder). Amazon has been sucking in a lot of people who never or rarely shopped there before. Not all online transactions are fulfilling, of course, but there has to be an exploding incidence of consumers who find the values of wide selection and doorstep delivery very compelling. This pandemic is creating a world of new online shoppers who Google merchandise and then head straight to Amazon.com.
“Though the cracks in bricks-and-mortar retail began forming years ago, the widening coronavirus outbreak stands to hasten physical retail’s decline and strengthen the monopoly hold of Amazon and other online giants,” The New York Times opined – in early March, two months ago. “Such a consolidation of power among just a few retailers threatens to leave consumers with higher prices and less choice.”
And, of course, who knows which brick-and-mortar retailers will be left standing when the dust clears? Big or small, chains or independents, they’re all vulnerable. J.Crew is the first to succumb to the virus, declaring bankruptcy just this week.
Amazon has long since dominated the living room, the bedroom, the kitchen, the pantry, the entertainment room, the closets, the bookshelves, the utility cabinet, the tables and the tabletops. Is there no end?
Apparently not. The medicine chest is next. In early February, even before the virus had reached pandemic stage, I received an email from Amazon offering home delivery of my prescription medications. Service was free and delivery was free. I’d pay only for the meds themselves.
PillPack Inc. (Manchester, N.H.) is not new. It was founded in 2013 as an online pharmacy and licensed in 31 states. Nor is its association with Amazon new. Amazon acquired the company two years ago for about $750 million. Last year, the subsidiary’s name was changed to “PillPack by Amazon Pharmacy”.
Here is what is new: COVID-19, the virus of locking-your-doors and staying-at-home. If consumers are increasingly resorting to ordering books and videos, groceries and bath towels, from home, why not their blood pressure pills and their anti-depressants?
There are, in fact, a few compelling responses to “why not?”
For one thing, this is not your everyday marketplace. While the nation’s health is in turmoil, so is the nation’s healthcare industry. Hospital emergency rooms and epidemiology and virology departments are being stressed and stretched. The industry is being overwhelmed by roughly 1.2 million confirmed cases of coronavirus, about 25,000 new cases each day.
Even in healthy times, healthcare is a tangle of licensing requirements and regulations, insurance limitations and loopholes, confusing Medicare and Medicaid coverages and provider network restrictions. Just getting a busy physician to approve a refill, once an annoying bump in the open road, has become a nightmarish traffic jam.
Most insurance companies and many retail pharmacies already offer their own online drug-fulfillment. Confused consumers tend to rely on what’s familiar and what works for them, especially regarding health-related products and especially, these days, when they’re overwhelmed by such mundane details as how far apart is it safe to be, how to make a homemade mask and which surfaces are safer to touch than others.
Into this turbulence steps Amazon. Why? Perhaps because prescription medications are a $500 billion-a-year-industry. Perhaps because roughly 60 percent of American adults have at least one chronic illness and 40 percent have two or more (according to the Centers for Disease Control). Perhaps because seniors, the major users of prescription meds, account for roughly 52 million – or closing in on 20 percent – of the American population.
And also because Amazon.com gets more than 200 million visits a month (26 million of those are Prime members) and reportedly is the first stop on online shopping searches for more than 55 percent of American consumers.
In other words, this isn’t the first rodeo for Amazon. How many “experts” have been exposed over 25 years for having bet on the challenge rather than putting their money on Amazon? The house odds are now officially changed. Amazon is the clear home-field pick, the 1-2 favorite.
So take your Xanax as you prepare for the next big industry game-change. You might even be ordering it from Amazon.
As a journalist, writer, editor and commentator, Steve Kaufman has been watching the store design industry for 20-plus years. He has seen the business cycle through retailtainment, minimalism, category killers, big boxes, pop-ups, custom stores, global roll-outs, international sourcing, interactive kiosks, the emergence of China, the various definitions of “branding” and Amazon.com. He has reported on the rise of brand concept shops, the demise of brand concept shops and the resurgence of brand concept shops. He has been an eyewitness to the reality that nothing stays the same, except the retailer-shopper relationship.