| BUSINESSWEEK ONLINE : NOVEMBER 15, 1999 ISSUE | ||||||||
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| NEWS: ANALYSIS & COMMENTARY
Throwing Bricks at the Clicks Big retailers are going after their online rivals You would think that CVS Corp. would save its marketing firepower for its big competitors like Rite Aid Corp. But these days, the $17 billion chain has found a new enemy: All those dot.coms offering prescription drugs over the Internet. The Woonsocket (R.I.)-based drug giant is launching a $25 million TV campaign mocking the service of Internet competitors, warning customers ''your pharmacy shouldn't be a get-rich-quick scheme.'' A dot.com ad backlash is emerging in radio and print and, soon, on TV, too. Giants such as CVS, Toys 'R' Us, and The Allstate Corp. are fighting the inroads of Web-based rivals--even, in many cases, as they gear up their own Web efforts. Online sales of drugs, insurance, and toys remain only a fraction of total retail sales. But every lost sale hurts. So companies such as CVS are ready to pick apart the vaunted advantages of pure e-commerce and point out its drawbacks: no friendly face to talk to, no way to handle stuff before you buy, even the difficulties of returning goods. This year, well-funded startups such as drugstore.com and PlanetRx.com will grab an estimated 0.3% of the prescription drug market, according to Forrester Research. And CVS plans to compete with them through a relaunched Web site. ''The Internet is a great thing. We believe in it too,'' says Michael Hartmann, head of marketing at CVS.com. But, he adds, ''Prescription drugs aren't something you want to fool around with.'' Many dot.com-bashing ads prey on cyberphobia. ''Traditional companies are trying to capitalize on the fears of emptiness in cyberspace while they can,'' says Brian Mulhern, account director at ad agency Cliff Freeman & Partners. In recent radio commercials, for example, Toys 'R' Us derides online-only stores as ''take-my-money-dot-com.'' The ad explains: ''At Toysrus.com, customer service comes first. Just return or exchange your purchase at any Toys 'R' Us store.'' Allstate, which has no online business at all, uses its ads to create doubts about upstarts. In one, an Allstate agent describes going door-to-door in his hometown after a tornado, searching for his clients. ''I wonder who looks for customers who buy insurance online,'' he muses. Meanwhile, some college bookstores are plastering school publications with ads presenting online booksellers as used-car dealers. ''www.maybethey'llshowupin7-10days.com,'' proclaims one ad in a University of California at Santa Barbara magazine. But the real fear for many traditional companies is that they will show up sometime. By Kathleen Morris in Los Angeles _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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