Is CVS addicted to wasting money?

Queues will form because of the long winded CVS mobile payment system process.

Queues will form around the malls because of the long winded CVS mobile payment system process.

Every single analysis I’ve read of the digital transformation of industry (and I’ve read an awful lot) agrees:

  • The full advantages of tying tech up inside the way we work in the real world can only be realised if they reduce friction by making things easier to do and to use,
  • Management must adopt new working practises and partnerships
  • Management must break down internal silos
  • Business practises and traditional approaches must be changed as well.

So why is CVS ignoring all this advice with its decision to introduce its own payment system rather than supporting Apple Pay?

Think on this:

Here is how customers shop with Apple Pay: Pull out the iPhone or Apple Watch, tap, choose payment card, pay.

Here is how customers shop with CVS or Walmart: Pull out the iPhone, open the app, tap the app to find the correct section of the app, show their device to someone on the desk, that person will scan the app, customer chooses the payment card and pays.

Which of these systems reduces friction?

I have no idea who is advising CVS. I’m sure they got paid handsomely. But the only motivation to do this must surely be to force customers to use the CVS app  in order to capture data about shopping habits.

What makes that tragic is that now Apple plans to introduce Apple Pay APIs, retailers should be able to figure out nice ways to implement Apple’s solution through their own mobile apps if they wanted to capture similar shopping habit data. This is the logic: 

Loyalty card apps + Apple Pay payments = data.

Denial of Apple Pay + separate loyalty card systems = no data and customer dissatisfaction.

I understand that retailers want to ensure they are not in thrall to the big tech firms, but they are wasting time and money in this attempt.

They should get ahead of the puck and create  solutions that enable customers to pay with their choice of mobile payment system, but implemented through their own loyalty apps. That way customers can choose to share the shopping data Apple won’t, gain loyalty discounts and points, and everyone wins.

That’s friction free, partnership and breaking down of silos right there.

I think CVS has been poorly advised, and if that’s how the chain’s management think then I doubt the company will survive the digital transformation of retail.

 

Jonny Evans

Watching Apple since 1999. I don't say what they should do. I say what they might do. They sometimes do.

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2 Responses

  1. Gary says:

    CVS isn’t innovative. This from s company who lines their shelves with blatant design infringements of most competitor packaging. As Apple might insist, they slavishly copy every packaging design element of competing products then hope the consumer grabs the CVS brand by mistake.

  2. Michael J Sheeran says:

    I never saw it that way. To me they do it so I can quickly scan the shelves to find their generic version. It’s my guess that you’d have to be a special kind of stupid or monumentally unattentive to mistake their store brand for the actual thing.

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