Money in the Bag
Seniors represent a critical cash sales category for HME businesses. Industry experts share top tips to help providers expand their retail sales by targeting this growing demographic.
- By Joseph Duffy
- Aug 01, 2014
Senior cash sales? It’s money in the bag. With 10,000 seniors turning 65 every day, don’t ignore this booming sector. According to Pew Research center, about 10,000 people will turn 65 every day for about the next 15 years, making it an excellent time to target this growing market segment with a cash sales strategy. Other statistics, which were provided by VGM’s Retail team, that support a cash sales strategy for this demographic include:
- Baby boomers outspend other generations by an estimated $400 billion each year on consumer goods and services (U.S. Government Consumer Expenditure Survey).
- Baby Boomers account for nearly $230 billion, or 55 percent, of consumer packaged goods sales (Nielsen).
- In the next 10 years, U.S. baby boomers will increase their annual spending on wellness-based services from approximately $200M to $1 trillion (Paul Zane Pilzer, “The Next Trillion”).
To help you start or improve a senior retail strategy, here are top tips from industry retail experts:
Invacare’s Mary Kander, Vice President, Lifestyle Products, and Chris LaPorte, Business Manager, Personal Care Products, says Invacare’s best selling products for seniors include bath safety items and walking aids.
Having a “safe bathroom” vignette in a showroom shows seniors and their families all of the product options they can pursue to make sure the bathroom has the safety features needed to make the senior feel comfortable in the bathroom. The vignette also will show how to install, place and use the various products. “While initially seniors might be resistant to adding safety products to their bathroom, when they have an opportunity to see how the products would be placed in the bathroom and understand how they would be used, it’s much easier for them to understand the benefi ts and be comfortable with modifying their bathroom to incorporate these products,” says Kander.
With respect to walking aids, having a range of products in the showroom, including accessories, lets seniors try out different versions and styles to decide what suits them best.
“A senior who expects to be walking outside likely will choose a product that can better accommodate uneven surfaces than one who expects to use the walking aid mostly indoors where surfaces are more even.” Says LaPorte. “They may have preferences for transport (lightweight) and low storage profi le. In addition, people who expect to use the walking aid for longer distances or periods of time likely would prefer a version that includes a seat. Having the accessories readily available provides the senior with the opportunity to better understand how products might provide additional benefi ts, such as a tray for carrying food or a pouch for carrying/storing personal items.”
Since most seniors want to stay in their homes as long as possible, providing them, and their family/caregivers with options to keep them safe in their home lets them stay there, says Kander. For the senior’s family, they are more willing to accommodate their loved one’s wishes if they know that the environment has been adapted to make it safe for them to continue to live in their home.
Sydel Howell is an HME provider with a retail store in San Diego. During the dawn of caps, cuts and Medicare reimbursement becoming less reliable, she set out to make her store independent of Medicare. Today she has contracts with HMOs for only two items and the rest are cash sales only. About 60% of her sales are from seniors. The rest are customers sent by doctors for compression garments, post-mastectomy products or other caregivers.
She didn’t bid during San Diego’s competitive bidding process and stopped billing Medicare in August 2012.
“I knew that in 12 months I wasn’t going to be able to take care of those patients and I didn’t want to have to grandfather and deal with Medicare not paying me even though they says they would grandfather,” she says. “I didn’t trust them so I was done.”
Howell’s retail strategy is to provide high-quality customer service and high-quality products and she says she couldn’t do that at the rates Medicare wanted to pay her.
Sine this transition, Howell says her business has become better and more profitable.
“The same people who walk through the door and want something through Medicare come back the same day or within a week and buy it from me because they can’t get it or their insurance won’t cover it or it’s taking too long to get approval,” Howell says.
Howell’s store is 2500-square feet with three spacious fitting rooms. Each fitting room can accommodate a wheelchair, the patient and a caregiver. The rooms are big and comfortable so people can feel like they are at home, says Howell.
“Our job is to educate,” she says. “When people trust you and they know you are going to give them exactly what they need, they keep coming back. And they will tell their friends. And that’s how we became successful: high-quality products and high-quality service.”
Another successful strategy Howell uses is she tells a story.
“When you walk into Nordstrom’s ladies department you see a mannequin wearing the clothes that are displayed in front of you,” she says. “All the jeans are together, all the shirts are together, the casuals together and the formals are together. It may have a splash of jewelry. You are telling a story about how things work together. So when somebody comes in for a cushion, they are also going to see other items that will go with that type of product. When people walk into your store, don’t make them feel lost. It needs to make sense why you group items together.”
Doug Francis, Principal and Founder, Drive Medical, says that the look and feel of storefronts are important but so is the actual customer experience.
“Consumers aren’t aware of most items in our industry,” he says. “Because people, in general, don’t like to be sold to, it’s important to have representatives for education and counseling rather than ‘sales associate.’ Having someone greet all customers, identify what their needs are and then respectfully guide them toward items they may not have been thinking about that will help with their unique situation is very important to the consumer.”
Francis says it’s also important to market a positive message of independence when marketing to seniors.
“Seniors are simply getting older,” he says. “This does not make them automatically sick. They want items that will aid in their ability to live an independent life. Seniors, like everyone, respond to ‘free.’ Doing an in-store giveaway of a product or service is a great way to generate store traffic and a great way to generate leads.”
Ty Bello, President and Founder, Team@Work, says that when selling to seniors, remember that they are the experiential market segment.
“What does that mean?” says Bello. “It means that this is the generation that made every shopping event and experience throughout their lives. We need to take a lesson from the big department stores and provide seniors with an experience. Starting with the way we greet them and not just let them wander throughout our store. Engage them, educate them, and sell them what they need and not what is on special.”
Flow is critical to the successful HME Provider who wants to have above-average cash sales.
“Leave plenty of room between isles, do not overstuff your shelves,” says Bello. “This tends to look like a bargain basement store. Clear, large print signage throughout the store is important. Give them a tour, show them your store, even if they don’t need that product today, they may know someone who does or they might in the future. Just give them a tour and make them feel at home.”
Bello says to reach out to seniors by advertising in senior newspapers, senior villages and communities. He says that this is how they respond today, but this is an evolving generation and in several years most of the seniors served will get their news on-line.
VGM Retail, a division of VGM Group, says that seniors are more likely to buy products or services they have knowledge or recommendations to buy. Because most seniors are retired, they often spend time researching the best product for their specific needs. Carrying products specifically recommended or developed by local or well-known physicians or other clinicians or experts is a key sales strategy with this group. Partnering with your local hospital or medical groups to carry and market those products will add the extra trust factor this group looks for in its purchases.
Host seminars with those same experts to discuss specific disease states or trending healthcare and wellness habits and how the product can help make life better. In addition, you can set aside and advertise specific times when clinicians and experts will be in your store to demonstrate and answer questions about what products are needed for different disease states or wellness trends. Often clinicians and other experts looking for clients will work with you for free as they can generate clients leads for themselves and obtain exposure.
Provide plenty of research and data to seniors about your HME products, and present them with options for comparison. For example, install video monitors near the products placed on your sales floor. And work with the product manufacturers to run a video how-to or testimonial loop on the product. The availability and accessibility of information will allow them to more easily make a decision when it comes to their purchasing needs.
This article originally appeared in the August 2014 issue of HME Business.