CVS Quits for Good: Purpose or just PR?

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There's been a lot of discussion lately about CVS Caremark's decision to stop selling cigarettes by October 1, 2014 in its stores.

Critics claim it's just a red herring gesture to outflank competitors for lucrative healthcare contracts.

The company's CEO Larry Merlo announced the decision saying that selling tobacco products is inconsistent with the company's purpose "to help people on their path to better health."

But really it's a nearly perfect merger of purpose and business strategy. It's a relatively small move that keeps turning the giant CVS ship toward its long-term business goals. The big fish of the future is not selling to smokers; it's in selling health services to the many people who need affordable, accessible care. And this aligns perfectly with the company's purpose.

While Merlo stated in his announcement on the CVS website that this is the "the right time and right thing to do," it really comes down to seeking out the opportunities that align best with the company's business prospects AND its purpose, a mutual and symbiotic relationship.

Inconvenient convenience foods
Critics claim the change is purely a PR move to replace a declining category with new revenue streams. They cite the inconsistent application of the "path to better health" because the company still sells alcohol and processed snack foods that contribute to the country's growing obesity epidemic. After all, it's hard to overlook the irony of a company selling high calorie, low nutrition foods up front while it sells insulin and pills croppeddrugs for hypertension out of the back.

Path to stronger purpose
If CVS truly wants to deliver on its purpose, it will need to look hard at all of the offerings on its shelves and decide if it's willing to apply the same rigorous judgement on junk foods as it did on tobacco. And where does that leave alcohol? Perhaps Merlo would say, "well, maybe now isn't the right time."

What would replace the lost revenue from those convenience foods?

  • health foods
  • fresh foods
  • nutrition programming
  • an in-store cafe

And if CVS wants to think really big, how about a mini-gym?

Healthy internal culture
And additionally, what is CVS doing to promote a culture of health with employees? It could also consider:

  • offering smoking cessation programs to employees at no cost
  • ensuring working environment has ergonomic computers and equipment
  • providing greater employee discounts for purchases of healthy items
  • organizing walk/run events in the community

CVS may be the first national pharmacy chain to stop selling tobacco, but it may not remain the innovative retail leader in overall health. Watch your back, CVS. If you don't lead the way, someone else will.

 If you need help aligning purpose with your business strategy and with building your brand from the inside out, call Alex at 785.383.3689.

Tags: external brand, internal brand, brand alignment, employee engagement, brand value, ROI, culture, business strategy


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