CVS quit selling cigarettes and tobacco products in 2014, made $139 bn, and saved 65,000 lives. That’s the best kind of retail health there is.
It’s been a year since CVS quit selling cigarettes, I’m reminded by a one-page ad in today’s Wall Street Journal on page B5. This is a big investment in an ad for a business strategy that’s had a huge return-on-investment.
The ad reads: “One year ago, we took a deep breath and quit selling cigarettes in our pharmacies. Now we’re working to create a tobacco-free world. We just want to help everyone, everywhere, breathe easier,” with the company’s tagline, Health is everything. This prompted an overall branding change from “CVS/pharmacy” to “CVS Health”
At the time of CVS announcing this transformational change in February 2014, pharmacy industry analysts were concerned about how CVS could replace the foregone $1 bn revenue CVS would forfeit by dropping tobacco from store shelves.
Not to worry: 2015 revenues for CVS were enhanced by the company’s operations in other areas — especially via the prescription benefit management (PBM) company, Caremark, which helped drive CVS Health revenues to $139.4 bn for the year ended December 31, 2014, a total revenue increase of nearly 10% over 2013.
Dr. Troyen Brennan, CVS’ chief medical officer was quoted in USA Today saying if the results were extrapolated for pharmacies across the USA, it would lead to 65,000 fewer deaths a year.
Health Populi’s Hot Points: CVS Health made a bet that rebranding would be good for business. It’s definitely been good for public health and individual smoking-quitters’ health outcomes, number about 65,000 consumers a year who will survive, work, pay taxes, raise families, and be able to shop at CVS. That’s a kind of brand-love in the making.
There’s a move afoot among pioneering retailers who have quit tobacco like CVS has. You can check out the CounterTobacco.Org website for strategies on tobacco-free pharmacies. You can also visit the Campaign for Tobacco-Free Kids.
Retailers, from pharmacies and grocers to discount and Big Box stores, are morphing into important health destinations for consumers seeking convenience, access, transparent prices, and high levels of customer service. Consumers are also buying more mindfully and consciously when it comes to shopping based on personal values. Witness the growth of Tom’s Shoes, Patagonia, Warby Parker, among other companies who seeks to share revenue with consumers who cannot afford to shop their brands. CVS’s move to quit tobacco falls into this category, as well.