CVS Pharmacy Moving Tobacco Out Of Its 7,600 Locations
It’s official, CVS Pharmacy is moving tobacco cigarettes out of its 7,600 locations by October of 2014. While cigarettes are on their way out, the giant retailer has left the door wide open for those who choose to vape.
In a bold move, CVS Pharmacy has said no to tobacco and positioned itself to be among the leading electronic cigarette retailers. Upon making this historical announcement, CVS was immediately applauded in public health circles. President Obama himself called the news a “powerful example”. Tobacco has had terrible consequences for millions of people worldwide and any move toward getting smoking out of our lives is a step in the right direction.
When you consider the fact that CVS brings in 2 billion dollars a year from tobacco, this seems like a great public health move but at the same time it seems like a terrible business move. Not so fast!
CVS stockholders – don’t sell just yet. A successful mega business like CVS would not simply walk away from 2 billion dollars in annual revenue, at least not without a replacement, a replacement in the form of electronic cigarettes.
At this time, CVS has not officially indicated that it will be moving in as an electronic cigarette retailer. At the same time, it has not excluded electronic cigarettes from its business plan. The lack of omission speaks volumes. More than that, it is yet another indicator that electronic cigarette regulation will soon be upon us. Sooner rather than later, the FDA is expected to make several determinations directly impacting the electronic cigarette industry.
Judging by CVS’s announced October 2014 deadline, the drug store chain is moving forward with the expectation that electronic cigarette regulation will be clarified in the coming months and, more than that, they expect to begin replacing massive tobacco revenues shortly thereafter. After all, no business operates with a plan to reject revenues and growth. Given that, the October deadline is very significant in terms of forecasting the future of the electronic cigarette industry. In other words, as fast as electronic cigarettes have been growing as an industry, the clear indication is that we are at the tip of the iceberg in terms of how fast this industry will grow in the very near future.
For those who will opt to vape rather than smoke cigarettes, walking into a store with endless electronic cigarette brands may prove to be confusing. While availability will be increased, electronic cigarette knowledge may not be quite so available. We anticipate online sales to remain strong. Online, consumers can access vital information that will help them choose the electronic cigarette that suits their needs. Beyond the information available, online customers can have replacement cartridges and e-liquid delivered right to their door.
That being said, retail sales of vapor devices will raise the overall profile of the industry and increase product fame and familiarity. This is great news not only for the industry, but also for smokers. The more mainstream and familiar a product is, the more viable an option it will become for the masses as the mystery and exclusivity disappear.
So, is the general public ready to wholly embrace the electronic cigarette as a replacement option for tobacco cigarettes? We think so. More than that, CVS thinks so. In fact, CVS is betting 2 billion dollars on it. Our guess is that 2 billion dollars is not a bet that anyone would take lightly!
Signing off,
Matt
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