Getting Retail Rolling
12 great ways for any provider to rev up retail revenue.
- By David Kopf
- Oct 01, 2014
Like a racecar, the relevance and value of retail sales in driving revenue for HME providers gathers momentum with every passing day. Retail sales offer a compelling way for providers to reinforce their cash flow and even grow revenues beyond expectations. Why? Straightforward cash transactions don’t involve Medicare, private payor insurance carriers or anyone else — only the provider and the patient are doing business in a retail transaction; no muss, no fuss.
Moreover, retail sales capitalize on providers’ existing expertise and customer base. There is no better expert on home medical equipment and related products and supplies than the HME provider. Also, providers have a built-in cash sales clientele, thanks to all the funded patients that they already serve.
This means cash products such as bath safety items, home access upgrades and aids to daily living offer a wide variety of appeals to patients that are already coming into the store for other items. Whether retail sales items are impulse buys or are actively sought, it’s clear they are part of the spectrum of products providers need to serve up to their patients.
However, this also creates news challenges for providers: how can they best create the right product mix for their patients and how do they properly serve them up on the showroom floor? How can they set up engaging signage and displays? How will they implement retail sales and marketing strategies that draw in customers and staff a team that can sell to them?
There are answers to those questions. Whether you’re a retail veteran or new to cash sales, these 12 techniques and ideas should help you expand your retail revenue:
1. Understand Merchandising
First off, understand the core concept of merchandising. Most providers comprehend merchandising in the context of how products are arranged within a store, or how a showroom looks, but merchandising encompasses more than simple arrangement or aesthetics. If anything merchandising represents a broad strategy: Effective merchandising attracts and invites a shopper to enter the store, then it convinces them to interact with it and truly go shopping by moving through the retailer’s wares to investigate what is available. Signage, displays, arrangement and shelving all contribute to the merchandising process.
2. Strategically Place Products
Start with planograms. Many vendors and other industry resources can supply providers with diagrams that will help them effectively arrange their wares on stores. Believe it or not, there are very well-thought-out strategies for why one product goes in a certain place on a shelf or end cap. Rather than reinvent the wheel, leverage the lessons others have already learned and apply them to your store.
Also, because providers are trading in both funded and retail products, they must consider carefully how to create a good mix between their funded products and their retail products. It’s very important to have products placed near complementary items. This is why cereal is located near milk in grocery stores. So, for providers, sheets and mattress covers are ideally placed with beds and mattresses, for example.
Moreover, merchandising plans for retail HME not only must incorporate pairing retail and funding products for display in the showroom, but also need to keep things fresh. Rearranging what is in the store every three or four months is a great way to get patients coming back, and perhaps buying more.
3. Devise Engaging Displays
A key element to any successful merchandising strategy is displaying the product. 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. So, products must not only be shelved in an organized way, but they must be “showcased” to customers. The idea is to come up with ways to engage the patient. A great way to do this from an HME perspective is to display items in such a way that they look like a room from any home. This gets the patients and their families and caregivers thinking about how that DME — and the related cash products — would look in their homes.
4. Create a Showroom Floor that Sells
Most people come into a store with a specific list of things to buy. The goal of a good showroom is to get them thinking about additional items they might also want. When planning the showroom, try to arrange product in such a way that it promotes “flow” through the store. Done right, displays and signage will all work in concert to help direct the customer from section to section of the store and get them to explore more than they had initially expected. And staff can help in this regard. When a new customer walks in, staff can offer to give them a tour, and show off the store. Even if they’re not in the market for something else, they may know someone who needs something or they might need something they see in the in the future. And when they do, they’ll know which store sells it — yours.
5. Create a Retail Experience
Now is the time to assemble all of these components into a holistic cash sales strategy. 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:
Effective merchandising attracts and invites a shopper to enter the store, then it convinces them to interact with it and truly go shopping by moving through the retailer’s wares to investigate what is available. Signage, displays, arrangement and shelving all contribute to the merchandising process.
6. Fine Tune the Point of Sale
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.
Work carefully to tie funded workflows and infrastructure to retail workflows and infrastructure. 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. Done right, the provider will be able to promote based on patient records and habits, or tie retail promotions to re-supply items for funded items, for example.
Also, use the point of sale to sell. Point-of-purchase displays are an important element in merchandising. 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.
7. Leverage Signage
Signage is an important tool in merchandising. When a new or even existing customer comes into your store, there is no possible way for them to be familiar with your inventory. Signage is a powerful tool 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. They might have come in for compression garments, but they might leave with a couple grab bars thanks to some attractive signage.
It is important to keep your signage fresh and new. In the same ways companies constantly change out their advertising on television, in print and on the web, providers need to change up their in-store signage to keep attracting patients to products. Fresh imagery and message are key, and a great way to do that is through seasonal changes. You can not only use seasons and special dates to conduct marketing and special offers, but also use them to create a fresh “feel” to the store through new signage.
8. Get Manufacturer Support
Don’t forget that many of your vendors offer a variety of retail tools and resources to help your increase your cash sales. Many vendors will offer signage, displays, literature, demonstration videos, brochures and other resources to providers in order to help them create a showroom that helps sell the product.
Most come at low- to no-cost in comparison to the alternatives, as well. Why would vendors offer these resources? It’s in their self-interest to ensure that their providers enjoy success with their retail products, so they are willing to offer marketing support that ranges between customizable brochures and tri-folds, all the way to print, radio, web and even video advertising support.
As you craft your retail business plan, make absolutely sure to contact each of your retail DME vendors to find out what tools they have to offer. You might be pleasantly surprised at not only what they have to offer, but the results, as well.
9. Maximize Your Marketing Efforts
You can’t have true retail success without employing effective marketing. True, you can generate retail sales through your existing customers coming into the store, but you’ll go much further if you advertise to past, existing and prospective clients that you have retail DME solutions to their daily challenges. There is a wide variety of channels to get your message out, including local papers and mailers, as well as radio and possibly even local television advertising.
But don’t stop at traditional marketing. Consider getting out and doing a little public speaking. In the same way that you conduct in services for referral partners in the local healthcare community, consider hosting local seminars for patients at community centers, assisted living centers and other venues that let you present and discuss your homecare solutions, as well as answer questions.
When it comes to the specific marketing messages, consider appeals that resonate with the different segments of customers and patients, and determine which venues — print, social media, email, web, print, and even TV and radio — will spread awareness and drive interest and traffic to the store.
Also, engage in in-person marketing opportunities. Take out booths at local fairs, community events and similar venues. While you might not make a presentation like you would at a seminar, you’ll at least have another opportunity answer questions and offer information. Offer a free give away or game or contest to attract prospective clients to your booth. Interfacing with your local marketplace will help establish a reputation for being a local expert who is willing to share his or her knowledge, and that will pay off in additional retail revenues.
10. Invest in Sales Training
Once those patients get to the store, staff will need to know how to sell their retail wares. For some HME businesses, retail sales can represent a whole new ball game. For many “making the sale” can seem counter-intuitive from the typical process of working with referral partners and filing a claim. This means you must ensure that your staff has the necessary skillset, training and disposition that will help them make your retail business a sales success story.
A key aspect of empowering your sales team is ensuring that they have rock-solid product knowledge of the DME you are offering and how these various items relate to various patient needs. If they are doing their jobs right, they will function as an expert consultant that will help your patients make the right decisions about what they need.
11. Offer 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.
12. Consider Your Clients’ Needs
Remember, sales is not a dirty word and it is not counter-ethical to providing good care. Bearing that in mind, consider the clients you serve and the types of products that could benefit them. For instance, if you serve a large number of seniors with diabetic supplies and respiratory equipment, you could offer them a whole range of retail offerings that they might value. Products such as incontinence supplies, compression garments, bath safety upgrades, home access, aids to daily living, and personal mobility scooters would be cash sales coups for provider and client alike.
This article originally appeared in the October 2014 issue of HME Business.