CVS (NYSE:CVS) runs a wonderful business selling nostrums -- both prescribed and over the counter -- for various ailments, including that comp-sales booster, the mighty influenza. I can't stand the flu myself, but it does add value in the retail pharmacy sector.
Nevertheless, CVS -- like its competitors Walgreen (NYSE:WAG) and Rite Aid (NYSE:RAD) -- does not live on flu bugs alone. To keep those monthly sales growing, all of these companies need to sell a variety of products besides pharmaceuticals. Shampoos, razors, batteries, games, milk, snacks, soda, phone cards -- they're all in play.
Photography is especially big. Pharmacies love the art of picture-snapping -- well, actually, they love to sell you stuff to take photographs, and then they love to develop the film or the film in the disposable cameras they sold you in the first place. They'll even sell you prints from the digital camera they didn't sell you. Disposable cameras have been a tremendous boon to drug stores and consumers alike. Even if you aren't into photography, you can always grab one of those one-time-use cameras for a special occasion -- and you often buy it at your local drugstore.
Now, CVS is teaming up with a company named Pure Digital Technologies to bring the world -- drum roll, please -- a one-time-use digital camcorder. According to the press release, for 30 bucks (plus another $12.99 for media transfer), a consumer can purchase a single-use camcorder that will fit into a pants pocket (we're talking Gameboy-small here, apparently) and is able to record 20 minutes of digital video/audio. You'll receive a DVD of your video-capturing session once you're done. CVS has the technology exclusively in 1,400 locations at the moment -- and expects a wide rollout in more than 4,500 locations by the end of this month.
These pocket-sized ephemeral camcorders are not about to render high-end equipment such as Canon XL2s obsolete anytime soon. In fact, most camcorder makers probably don't have much to worry about. Still, I think the consumer will fall in love with them, just as they did with the single-use film device.
Everyone loves the idea of capturing images or short bursts of video on their cell phones, especially teens, so we know there is a market for this product. And if a teen -- or even customers in an older demographic segment -- doesn't own a fancy camcorder (or didn't bring one along), a quick trip to the pharmacy will offer a useful solution. There are a lot of occasions that this device will certainly enhance, such as proms or weddings. Granted, the price might be a bit steep, but I believe this technology will catch on significantly regardless.
CVS shareholders will be happy to know that their company has another arrow in its quiver with which to target sales. People who enter a CVS to pick up one of these single-use devices present an opportunity for add-on sales, not only at the time of purchase but also on the return visit for processing. Repeat traffic is one of the keys to successful retailing.
I see this program as a definite sales driver once word gets out to consumers (of course, CVS's competitors will surely jump on this too). And think of all those wannabe filmmakers out there who watched Project Greenlight on Bravo and have images of producing the next Blair Witch-type zeitgeist. I can only imagine that someday we'll be reading about some young hotshot kid who got the clever idea to make a festival-winning film with a bunch of disposable camcorders. Hey, maybe I..
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Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.
