CVS-Aetna augurs new health care experience

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The pending $69 billion acquisition of Aetna by CVS could yield valuable lessons for others in the health care and drugstore sectors as they seek to forge stronger ties to consumers.

What interests us here is the potential for the CVS-Aetna merger to create new, meaningfully differentiated brand experiences for consumers. CVS has nearly 10,000 stores; Aetna covers 22 million people. If they can combine to better meet the clinical and patient needs of such a large swath of the U.S. population, it will be a game-changer.

One key component likely will be MinuteClinic, CVS’ retail health clinic operation. The addition of Aetna could ultimately translate into more in-store clinics for CVS — it already operates about 1,100 — with expanded menus of available medical services, including those for patients with chronic conditions. In turn, this could help CVS further sharpen its focus on its core business and purpose — namely, to be a health care company.

For far too long, U.S. chain drug stores have suffered from a bit of an identity crisis. Despite the coolers and front-of-the-store merchandise, CVS, for one, has realized that it isn’t primarily a food seller, nor is it a discount retailer or c-store. Increasingly, CVS has been trying to act like a health care company.

An even stronger health care push by CVS would create some intriguing possibilities with respect to integrated store design, signage, packaging, naming, logos and other forms of creative marketing. Still, the actual experience of receiving health care in these locations will arguably be the biggest factor in bolstering the brand.

Potentially, this union is a step away from a disjointed, broken system toward greater coherence. The question is, what philosophy and mission are driving this? Is it pure profit or a true commitment to consumer care? Given that CVS has already demonstrated a commitment to consumer care at a loss to its revenues — namely, by taking tobacco out of its stores — we are glad CVS is doing the acquiring here.

More broadly, other U.S. pharmacy chains and health care-related companies could benefit from thinking creatively about how to better connect with their customers, and they will no doubt be paying close attention to how the CVS-Aetna deal evolves.

Connecting is second nature to manufacturers of soda, breakfast cereal or laundry detergent, but the calculus for health care companies is quite a bit more complex. If CVS and Aetna can put consumer care first and offer greater usability, transparency and value, there will be lessons as other companies seek to follow suit.

At the same time, we need to sound a cautionary note about the trend in the U.S economy toward vertical integration. While the list of resulting pros includes lower prices, easier access and more convenience, there are also significant costs as more consumers live within closed, vertically integrated ecosystems.

Consumers will soon be forced to pick their ‘team’: “I’m a Walmarter” or “I’m an Amazoner,” All of their info is in the vertical, and so all of the value they can reap — from loyalty rewards, to custom and leveraged pricing — is in that vertical. The thing is, the goods and services on offer are just about the same. The danger is a growing sense that Big Brother is truly here. Is that a good thing for consumers? Could it eventually spark a backlash?

Brian McDonagh is a Minneapolis-based strategy director at brand agency CBX, and Gregg Lipman is managing partner of CBX, based in New York. CBX specializes in creative marketing services, including strategy, naming, branding, retail design and packaging design. Its base of clients includes Saks Fifth Avenue, Lord & Taylor, Shinsegae, Walgreens, Wawa, Hain Celestial, McCormick, General Mills, Kimberly-Clark, Big Heart Pet Brands and AT&T.



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