Wednesday, March 11, 2015

CVS Abandonning Categories To Mark Strategic Changes

The year has already started, but I wanted to share with you some insights I  found on Retail Dive on the retailers you should look at in 2015.

One of the trend I would really like to look at is CVS Health move to abandon the distribution of tabacco in its stores. The retailer used to count on $2  billion thanks to this category. But they have decided to stop it in an effort to change the position of its store, and to set its chain as the leader of health retailing.

Indeed, it is difficult to claim you are working on health products if you sell cigarettes. But what I like about this move is the retailer is eager to quit one profitable category in order to have a comprehensive shopping experience and have a clear position in the market. Retail marketing is a difficult trade, and it will be interesting to see the results both in terms of store concept and in sales.

Here is a video of CVS CEO discussing about the topic. I like the way he emphasizes the long term benefits for CVS businesses of this move.