Best in Showroom
How providers can create winning retail showrooms that help do the selling for them.
- By David Kopf
- Feb 01, 2015
No one can dispute the importance of retail sales in the home medical equipment industry. Cash sales have helped providers not only stay afloat in an era of sweeping Medicare reimbursement cuts, but have also helped them redefine their entire businesses.
Nowadays, it is common for a provider to derive a significant percentage of their revenue from retail sales. And patients are willing to pay cash. Whether it is because an item is not covered by Medicare or private payor insurance, or because patients want items that are better quality and more feature-laden than what Medicare or private payor insurance will cover, customers are willing to open up their pocket books — even for expensive items, such as power mobility or portable oxygen solutions.
This means that providers are learning multiple retail lessons in short order, and one key element in that learning curve is the retail showroom. Gone are the days of some cramped floor space attached to a warehouse operation. Now providers need to create a venue that speaks to the “retail experience.” They must create a winning showroom that can help do the selling for them.
The Showroom’s Importance
“A provider showroom is especially important to HME retail sales,” says Randy Walsh, vice president of Jazzy and Retail Mobility Sales for Pride Mobility Products Corp., which is heavily engaged in the retail space. “Gone are the days were consumers are simply looking to fill a prescription. Retail HME consumers are just that — consumers — and while they may enter a provider for a specific item, an inviting showroom that displays retail HME products in an inviting way can introduce customers to products that they may not have thought of and encourage browsing. The goal of an HME retail showroom is three-fold: display product, encourage browsing, create comfort.”
One business that clearly depends on its showroom is 101 Mobility Boston, a provider of various home access solutions, such as stairlifts and vertical platform lifts, which are almost always transacted on a retail basis, according to Mary Lynn Miller, branch manager of 101 Mobility Boston LLC.
“The majority of our work is retail,” Miller says. “I would say 90 to 95 percent of it is retail. We do work with the VA and things like that, but the majority of our work is retail.”
Given the nature and size of those sorts of products, clients need to see them in action, and the notion of referring prospective customers to previous customers to see their stairlift or platform lift installations is not realistic. They need to come to a store and see the products in action, Miller says.
Having a showroom, the customers can come to Miller’s location “they can see it, they can touch it, they can sit on it, we can serve them a cup of coffee,” she explains. “It’s important to have.
“You have to have something tangible,” Miller continues. “You have to have something you can show [customers]. I know you can buy things off the Internet, and that’s great, but knowing and seeing it makes a big difference. Here in our showroom, we have pretty much everything we sell displayed, right down to whole ramp system; actual staircases with moving stairlifts. I will have an elevator cab in here soon. Two feet outside my office we’ll have a vertical platform lift from Harmar up and running.
Additionally, that showroom demonstrates commitment, which is important, because that instills the confidence in 101 Mobility Boston’s customers. Confidence is essential when people are buying higher-ticket items such as access equipment; they want to know that dealer has the necessary expertise and resources, and will be there for them over the long haul.
“To me it shows, ‘We’re here, we’re in the market, we’re not going anywhere,” Miller says.
The first issue that providers might have to tackle when it comes to the showroom is where it is actually located.
“The right location mixed with superior retail execution is the magic sauce for retail success,” says Rob Baumhover, director of retail programs with VGM & Associates, which assists VGM members to diversify their HME businesses through improved retail operations. “Location should be considered before anything else. Choosing a good location requires market data and traditional retail analysis.”
If the provider does not have a location that supports retail sales, then they will have to hunt down a new spot if they are serious about cash sales. This means getting solid data.
“Ask the real estate agent for the number of cars passing by the location daily, the amount of foot traffic currently visiting the location, and the demographic of the current shopper in the area,” Baumhover says. “Also find out from a market study the number of people in a given area and their demographics. Are there enough caregivers close by? Are there enough seniors? Is the population healthy and likely to look for life enhancing products? Is the location better than your competitors?
“If the demographics back your business plan, then look at the physical factors of the space,” he continues. “Is there visibility? What are the signage options for the space? Is the space size just right? Is there parking, convenience, and ease to get in and out of the space? Are there similar stores or diverse stores in the same general location?”
Baumhover says providers hunting for a new showroom should then start grading potential sites with an A, B or C.
A — “A locations have the highest traffic counts – both walking and cars passing by,” he says. “Usually there is a national retailer, a grocery store or restaurant in an A location. A locations are often where big box stores are located.”
B — “B locations are sometimes acceptable,” Baumhover explains. “They may not be in the mall parking lot but may be in a secondary strip mall nearby. A nice to have factor is to be close to healthcare providers. Is there a large clinic nearby? Is there a hospital in view?”
C — Lastly, C locations are the sites the provider should pass up.
And if a provider doesn’t have the wherewithal to move into a new location, then it should play to it’s strengths.
“Location is important, but by no means an end-all,” Walsh says. “HME products are a necessity, so consumers do locate providers as needed. A window-display storefront in an area frequented by the aging population is an advantage. A window display of, say, a lift chair and scooter along Main Street or in a busy strip mall can certainly draw in foot traffic beyond a more isolated location.
“However, again, for established providers who can’t move to a window-based storefront, they still have a loyal customer base, where a strategic showroom interior is the ultimate sales conversion tool,” he explains.”
Put the Client at Ease
Let’s all remember why a patient is coming to a HME provider: they or a loved one has a medical condition that necessitates them seeking solutions that will confer a therapeutic benefit or help them improve their quality of life. That fundamental, underpinning reason means clients aren’t coming to providers in the best frame of mind. They might be worried, or frustrated, or quite literally feeling ill. A good overall strategy is to ensure that showroom continually caters to that frame of mind.
“A retail showroom should be a place of comfort for the customer,” Baumhover says. “This is especially important in our business where the patient or caregiver is often uniformed about what products are available or needed or how specific products work at home. Rather than feeling confused or apprehensive when they walk into your store, the customer should take a deep breath and a sigh of relief that they have come to the right place. The showroom should be a place where the customer wants to return as a solution to an oftenunpleasant problem.”
The best way to start this process is to simply welcome customers.
“The first and most important is for each customer to be greeted and helped once they enter the store,” Baumhover says. “But there is an aesthetic element as well.”
Less is More
And that brings us to our next point: how much product should a provider display? There is a temptation to show everything under the sun, which isn’t actually advisable. While it might be counter-intuitive, you can sometimes provide better service by showing less.
“We recommend an uncluttered, organized showroom with consistent paint colors, flooring and fixtures that coordinate throughout the space,” Baumhover advises. “A mishmash of fixtures that don’t belong together erodes retailer credibility. The space looks thrown together. Instead, the space should be laid out so shoppers can see over most of the fixtures, can spot specific products on the shelves and maneuver easily to get to all the spaces in your store. Keeping product back stock hidden or in an easily accessible space separate from your showroom is key. Too much inventory on the floor just causes confusion for the customer. This especially important in our world since often the product needs are specific and require assistance with choice.”
“Having space is critical,” Miller adds. “Having enough room so that you get the proper clearances in front of things; not just trying to cram it in. … We focus on a number of items, but we don’t inundate our showroom by having every little thing in there. … We focus on our core items.”
“Product space on the provider’s floor plan is a vital tool in retail sales,” Walsh adds. “Consumers want to touch a scooter, disassemble it, test drive it, and take it home today.”
In fact, by adding some extra space, this gives the provider the opportunity to change out displays or highlight some items on a rotational or seasonal basis so that customers can see change within the showroom, which keeps things fresh and exciting.
Continuing that thought about keeping the showroom fresh, providers should think hard about how return traffic will help establish and grow the business. Assuming that the provider has a good retail site, it must focus on product and how rotating items can keep the experience new for the customer and keep them coming back.
“Make sure that you carry the essentials that always sell combined with enough changing product to make your customers curious enough to return to your store on a regular basis,” Baumhover explains. “Do you carry impulse items that change at least six times a year? Do you consistently shift your inventory to match the season? For example, creating a summer safety category in late spring or early summer? Or focusing on diabetes during diabetes awareness month? Or creating a caregivers corner with specific products for clinicians and tired caregivers.”
Staff will be key in this strategy, as well, he explains.
“Do you have the staff to manage product purchasing?” Baumhover adds. “If not, can you purchase product assortments already written for you so that you can insure that your product changes with the needs and wants of your customers while bringing new ones in the door?”
Organize by Need
The showroom should help direct customers to what they need and ensure that they get it. This is accomplished by carefully planned organization based around consumers and their HME needs.
“Separate departments such as diabetes management, mobility or pain management should be clearly designated by fixtures and signage,” Baumhover advises. “Shoppers should be directed with signage so they can spot unknown products for purchase. And signage at the fixture and shelf level should also be used to direct the customer and inform the customer.”
But in addition to organizing by department, providers need to think about comorbidities and how conditions can be interrelated, and organize their products accordingly.
“Product adjacency is also key to a showroom’s success,” Baumhover states. “Related product categories should be placed together so that your sales people can suggestively sell related product to a customer. Think in terms of disease states. For example placing footcare, compression, and pain management is a good combination to represent diabetes. Place ADLs and accessories near mobility. Or place sleep, respiratory and pain management together.”
Essentially, the provider has to think like the patients coming into the store, and then start to arrange items around that understanding.
“You have to think past what the customer is looking for, and take it one step further and think of what they need,” says Rob Heglin, product manager for diabetic shoe manufacturer Dr. Comfort, whose products are regularly sold by providers on a retail basis.
Reinforce Your Brand
At the same time, providers must also create continuity and identity. Most businesses try to create a brand identity through marketing materials, brochures, websites and product packaging that all look alike. They drive home the same “feel” to the consumer. Effective retail showrooms do the same thing. Thing of a large retailer such as Target; the store has highly defined departments, but each one still affirms that you are in a Target store. HME retailers should attempt to do the same thing.
“There has to be some consistency within the place,” Heglin says. “I’ve gone into places that, as things come in, they put products where they can find space,” Heglin explains. “But that’s not the best solution.”
Providers need to brand through their displays, and that means putting some tender, loving care into the process if they want those displays to communicate the right brand image and promise.
“If you have a rickety display that is meant to turn and doesn’t turn too smoothly, or look like its cheaply put together, unfortunately that can have an effect on how the customer perceives the product being displayed there,” he says.
Going back to the concept that “less is more,” when organizing by need, providers also want to create flow in the way that they arrange different departments so as to encourage customers to walk around the store and interact with different departments.
“Moving away from walls lined with product to a more walkaround retail-based floor plan makes a big difference,” Walsh says. “Again, you want customers to walk by and naturally reach out to touch the product – that first intuitive interaction is where a sale likely begins.”
By fostering that kind of interaction, the showroom helps sell the product. Now that the customer is walking through, exploring and getting to know the product, he or she is less likely to use the store simply to collect product information, and more like to make a purchase.
Use Displays that Educate
As most providers know, educating patients on the benefits of DME products is critical in ensuring they get the right product to support their needs. That mission becomes even more critical in the showroom and displays need to help execute on that mission, says Peter Bryant, director of national accounts for Dr. Comfort.
“We have consumer-facing pieces that call out why, if patients are diabetic or pre-diabetic, why it is important to monitor their feet,” he says. “We have literature that explicitly goes through all the things they can do to protect themselves and what they can do beyond that with our products. … It’s proven to be really effective.”
In fact, those kinds of educational displays can become a key part of the staff’s sales and service process as well.
“Depending on the size and the scope of the provider, there could be a dedicated person that is responsible for each section,” Bryant explains. “We evangelize as much as possible and try to create that ownership within the store for that particular employee so that he or she is as knowledgeable as can be.”
That way, the employee can rely on those materials and displays to ensure they are asking customers the right questions and using their answers to direct them to the ideal product.
Moreover, a display that educates can become an additional employee. During instances of high customer volume, a display that offers education can keep customers engaged until an employee can break free to help them.
“You don’t want that customer to leave, because you can’t assist them right away,” Heglin says. “… If the display educates the customer on the product, that can not only save a lot of time, and still help the customer so that you don’t lose them and they don’t walk out the door.”
Partner With Manufacturers
Lastly, there are many manufacturers in the industry, from makers of aids to daily living to power mobility devices, that are working overtime to ensure their products will help providers succeed in retail sales. Those manufacturers are constantly developing displays, signage and support materials designed for the retail environment, because they know their success is linked to how their providers fare.
Retail-minded providers must work with those vendors and tap into their retail expertise and resources as they have made significant investments in that regard. They understand that their futures are tied to their providers’ continued success, and they want to do anything they can to help make that happen.
This article originally appeared in the February 2015 issue of HME Business.