CVS announced its plans to begin closing its doors--about 900 locations across the country. Though that looks like a lot, it's only 10 percent of the company's retail locations. Though don't expect the remaining 90 percent to look 100 percent like CVS stores as we know them. Because the big news is really less about its closures and more about what's to come for the future of the pharmaceutical retailer. And that's the accessibility of healthcare services across the nation. What CVS is doing is exactly what it set out to do when it first launched nearly six decades ago in 1963.
In the words of the company's mission, its goal is to "make high-quality health and pharmacy services safe, affordable and easy to access."
This is a crucial reminder to businesses everywhere: growth doesn't mean getting bigger, it means getting better. That does not mean getting better at everything, as many are compelled to do. But getting better at what matters most: your core offering. Because it's also the core reason customers choose your business over the alternatives. And in the case of the pharmaceutical retailer, that's healthcare.
Your local CVS will no longer necessarily be a place to go when you realized you're out of milk or to pick up a greeting card--and never mind a late-night destination to grab that 6-pack when no other stores nearby are still open. But your local CVS will be turned into "destinations that offer a range of health-care services, from flu shots to diagnostic tests," according to the company's news release.
In other words, a place to go for all things health--as one would expect a pharmacy to be. However, it had become a company that wore many hats. Not only does it serve as a drug store, but also as a convenience store, a grocery store, and in some places, even as a liquor store. With so many revenue channels, there were a number of ways in which the company could grow.
For example, in an effort to expand it could have worked to more directly compete with Walmart, which also offers in-store pharmacies. Or it could have gone after the eCommerce giant, Amazon, which acquired PillPack and entered the pharmaceutical space with its own online pharmacy.
But in a wise--and evidently strategic--decision, it opted to expand in terms of depth. In other words, rather than continuing to be a jack of all trades, it will focus on being the master of easily accessible healthcare And to make strides towards this decision that reinforces its mission, it's stepping away from offering the breadth of its current offerings. After all, cigarettes and scratch tickets aren't exactly synonymous with health.
Though it's entirely possible to be a jack of all trades--and a master of everything--something Elon Musk proves. But he does this as an individual, creating multiple brands, not one brand entity.
So sure, CVS could have carried on as it were, earning its approximate $269 billion in annual revenue, but it wouldn't be living its mission. Nor would it be best serving its customers or setting itself up for its next century of success.
Companies, like CVS, that stand the test of time with decades in business and billions in profits, aren't those that sit idle. And they aren't those that get distracted and sidetracked in the pursuit of their mission. So yes, CVS will be closing about 900 stores nationwide over the next three years, but it's hardly shutting its customers out.
In fact, with its newfound focus and added health-related services, it just might become America's first true pharmacy of the 21st century.