CVS Differentiates Itself by Shunning Tobacco

February 25, 2014 | Branding, Business

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CVS logoCVS recently surprised many by announcing that it will no longer sell tobacco products in their 7,600 stores. As one of the nation’s largest drugstore chains, it was a bold move, one that is expected to decrease their sales by $2 billion.

They’ve shown leadership in the industry, and I can’t wait to see how this affects CVS’ perception in the marketplace.

In my area of Maine, there are 3 large drugstore chains: Rite-Aid, Walgreens and CVS. While each has a distinct and recognizable brand identity, there is little to distinguish them in terms of their positioning.

My personal anti-tobacco story

I hold strong anti-smoking sentiments. My dad started smoking very young—”before we knew how dangerous it was” he used to say. Although he managed to quit, his lungs were already damaged. By the time I was in high school, he was constantly hacking away with the persistent cough of emphysema and chronic bronchitis.

Interestingly, it was our local drugstore in Lexington, MA, Theatre Pharmacy, that I connect in my mind with his illness. They were local, independent and trusted. They filled all of his prescriptions.

I don’t remember if they sold tobacco products or not.

But when I think about it now, I clearly see the opportunity for a drugstore to position itself as promoting health and not selling something like tobacco: a well-documented, highly-addictive, all-around-terrible health hazard.

Currently, from my home in Portland, Maine I can walk to a Rite-Aid, Walgreens and a CVS. I view them all as glorified convenience stores; somewhere I’d pick up a candy bar, a greeting card or a bottle of shampoo. I feel no connection or loyalty to any of them. I’m tired of fishing through my wallet for their rewards cards. I certainly don’t feel any “trust” in their brands.

CVS’s move to eliminate tobacco products from their stores is making me take a second look. I don’t think it’s enough to transform their brand image yet, but it’s definitely an interesting direction to move.

What’s next

For CVS to really make any movement in its position in the marketplace it needs to push this idea further.

First of all, it needs to promote this change in policy clearly in the fall when it takes effect. CVS also needs to do better at  demonstrating how it cares about its customers’ health. Maybe it’s just me, but it seems that providing health services (pharmacy, vaccinations, etc.) is different than stocking Easter candy and magazines.

They are going to have make some adjustments in how they promote their products and services. Those sales circulars announcing the cheapest prices on hair color do not match with an industry leader in the health care services.

Finally, it will be interesting to watch how this affects CVS’ bottom line. Will they be able to attract more customers, or will customers be willing to pay a premium to do business with a company committed to their best interests.

One comment

  1. Dan Sexton | February 28, 2014 at 1:55 pm

    I was surprised by CVS’s gusty move to drop a $2 billion department. I have read their strategic plan includes having medical clinics in the drug stores. That service may differentiate them from their competitors.

    My dad ran a local drug store for decades, so I try to support local stores. That said, I have to admit that I have taken the easy route and get prescriptions at the local “mega pharmacy”. But my town (Portland) has a local pharmacy, Pharmacy By Design, with a real emphasis on health. I guess I need to put my money where my mouth is and move my prescriptions there. People vote with their feet so I need to cast by ballot there and support a local store where the pharmacist knows your name.

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