The 2013 HME Handbook: Cash Sales
Making Retail Feel Real
How to create a 'retail experience' for cash sales customers.
For the past five years, providers have been hearing a regular drumbeat calling them to retail sales. As competitive bidding has become increasingly “real” as it nears its near-nationwide implementation, providers have paid similarly increasing attention to retail sales. And now that Round Two of competitive bidding is nearing its July implementation many providers are seeing retail sales as a business imperative. Simply put, it drives new revenues that are completely immune from the constant cuts of Medicare funding.
Provider interest in cash sales perhaps hit critical mass at March’s Medtrade Spring in Las Vegas, where interest among attendees was felt by exhibitors and speakers alike. That’s encouraging news, but providers new to the cash sales game will have to surmount a respectable learning curve when it comes to understanding the various of retail sales, as well as a bit of a mild “culture shock” when it comes to how running a retailsavvy business can differ from a reimbursement-focal business.
Don’t worry, the two business models can happily co-exist, but there are things providers need to understand about cash sales if they want to succeed.
An essential retail lesson providers need to learn is how they can create ‘retail experience’ for customers and patients. When clients come to the providers’ retail location with cash sales in mind, they are expecting an experience that differs from that of a funded patient. A funded patient comes to the provider with a prescription and set expectations. A cash sales customer is looking for options, information and a range of solutions that can help make an informed purchase. Here are some key ways to create that retail experience:
Display product in ways that attract and engage. Putting product on the floor is less about organization and more about presentation. Products must be “showcased” in ways that engage the clients. Retail clients need to see how the product looks, how it works and want to be able to interact with it so that they can see how the product will benefit them. A great way to accomplish this is to display items in such a way that they look like a room from any home. This prompts the patients and their families and caregivers to start thinking about how DME and related cash products would look in their homes.
Use point-of-purchase displays. There is a reason many stores place “impulse” buys near the cash register — they know that customers will browse those displays while waiting to be rung up, and perhaps add them to their basket. In the case of HME, display these products in such a way that doesn’t just display the product, but helps educate the customer. Remember these are clients looking to make a smart, informed purchase.
Leverage the power of effective signage. When customers enter the store, there is no possible way for them to be familiar with your inventory — even if they’re past customers. Use signs to attract buyers to new offerings; direct them to things they are looking for; and perhaps get them to consider goods they might not have had on their shopping list. Also, refresh your signage to drive continued customer interest. Consider changing things up seasonally or on special dates to highlight special offers and to create a fresh “feel” to the store through new signage.
Invest in infrastructure. Any provider serious about creating a retail experience needs to be serious about investing in the tools that will accomplish that. This starts with point of sales systems. Providers want to have cash registers that can scan bar codes, process credit cards, debit cards and other forms of payment, and that are tied into the systems back office information technology. This will let the HME provider not only process retail sales transactions in a way that is familiar to the customers, but also let provider set up special pricing schemes and promotions for retail transactions, and correlate those exchanges to a patient’s overall history within the provider’s records.
Consider offering financing. Not all retails sales are small ticket, small margin items. Many retail sales items can translate into some rather sizable expenses for customers. Examples of higher priced products that attract cash sales customers would include auto access and home access items, and even funded items such as portable oxygen concentrators and mobility scooters that a patient or family member simply opt to purchase instead of fund. By providing consumer financing, providers can attract more clients to these items. Providers can partner up with a consumer financing company, which sometimes partner with DME manufacturers.
Points to take away:
- Cash sales is an imperative for providers needing to drive expanded revenue in the face of competitive bidding and other cuts.
- Providers need to work to put in place the infrastructure and resources that will reinforce the retail shopping experience.
- A pivotal part of that experience is how products are displayed. Proper displays focus less on organization and more on interaction.
- Signs that prompt customers to explore products, in addition to finding them are crucial. Changing signs regularly helps keeps the store and inventory feeling new and exciting.
- Invest in point of sales systems to ensure smooth transactions.
- Some retail sales items, such as home or auto access solutions, can get expensive. Consider offering financing solutions.
- Contact your vendors to see what they offer in the way of assistance. Many manufacturers in the HME space offer marketing tools and advertising resources. Also many offer a wide rage of merchandising tools such as in-store displays, brochures and signage that are perfect for retail sales efforts.
This article originally appeared in the June 2013 issue of HME Business.