The CVS Tobacco Ban

Tom Dougherty, CEO – Stealing Share

29 November 2016

CVS Tobacco. Drop the cigs. Why it’s happening now

CVS Tobacco part ways

CVS TobaccoThe most interesting part for me about the CVS tobacco ban. And, no longer selling cigarettes at its 7,600 locations is that the pharmacy chain didn’t do it sooner.

CVS made the announcement today, claiming it will lose $2 billion in sales by eliminating the cigs but hoping to reclaim those losses by positioning itself with a greater focus on good health.

What does banning CVS Tobacco sales mean?

I already thought that’s what a pharmacy was?

“From a brand standpoint, what the CVS tobacco ban is doing makes sense.”

 

CVS Tobacco BanThe meaning of the CVS tobacco ban

That was the point we at Stealing Share tried to make years ago when pitching new business to a large pharmacy chain. (Not CVS.) As a brand, how can a position of health be believable if you’re selling the cancer sticks?

The answer was that the pharmacy makes too much money on cigarettes – and it (like others) soon added alcohol to its offerings.

Soon enough, the chains lost whatever brand equity they had by trying to be all things to all people. It wasn’t just cigarettes and alcohol they were selling.

You could also find as disparate of items as gift cards to Applebee’s and cheap MP3 players. Nobody knew what the brands actually stood for.

From a brand standpoint, what the CVS tobacco ban is doing makes sense. I also suspect the real reason CVS is doing this is because cigarette sales are dropping (falling 31.3% over the last decade) and it’s only going to get worse. They are not quite the cash cow they once were.

So, good job, CVS. Bravo! But let’s not get on our high horse about it.

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