A Targeted Compression Strategy
Compression offers a chance to expand revenues serving both existing and new patients, but there are a variety of key considerations.
- By David Kopf
- Nov 01, 2017
Many DME providers and DME pharmacies are hopping on the compression train. There’s good reason to do it: with most of its revenue derived from retail sales, compression lets providers expand revenues while serving both existing patients, as well as giving them an opportunity to reach out to and new clients and drive new business.
As compression providers know, it is a solid cash sales category serving a number of patient groups that are regular pharmacy customers. A wide range of compression garments and wraps are used to treat conditions including foot swelling, mild edema, varicose veins, thrombosis, varicosities of varying severities, and diabetes. Moreover, there are a number of related products, such as donning and doffing devices to help patients, particularly those with reaching and stretching limitations, put on and take off their compression garments.
With the right product and care education, a pharmacy can offer compression, but the key lies in maximizing the opportunity. To do that, pharmacies need to understand how large a role factors such as merchandising and marketing play in a successful compression business.
UNDERSTANDING THE OPPORTUNITY
The worldwide compression market is projected to swell from $2.4 billion in 2012 to $3.4 billion in 2019, at a compound annual growth rate (CAGR) of 5.1 percent, according to “Compression Therapy Market to 2019,” from research and consulting firm GlobalData. Better yet, in 2012, the United States was home to the largest market for compression therapy, with 49 percent of the market revenue. GlobalData’s report forecasts the U.S. compression market will grow from $1 billion in 2012 to $1.6 billion in 2019, at a CAGR of 6 percent. Those market numbers are certainly hard to ignore.
What’s driving that growth? Increasing populations of diabetic patients and elderly patients with venous diseases, according to Global-Data’s report. These are patient groups with whom most pharmacies do a considerable amount of business. With a clear market opportunity and existing customer relationships already in place, many pharmacies will find themselves in a prime position to tap into compression services.
That said, also think outside the box. There are non-healthcare markets that are also interested in compressional garments. The athletic market is a perfect example: runners, triathletes, older athletes and other sporty types can benefit greatly from lighter compression hosiery, sleeves and other garments. While non-traditional for HME, they represent a don’t-miss market opportunity.
FOCUS ON FASHION & SELECTION
While compression garments provide a therapeutic benefit, compression providers must remember that at the end of the day, patients consider these items are clothing, so fashion plays a role — and in many cases a strong role. Bearing that in mind, who wants a drawer full of just one color hose or stockings? Therapy or not, people want to feel that what they’re wearing makes them look good, not just feel good. Bearing that in mind, provide a wide range of product types, sizes, colors and styles. In fact, color and style are more important than you might initially realize. Compression garment manufacturers are well aware of your customers’ desire for a wide range of choices, and are constantly updating their range to address seasonal changes and fashion trends.
Display the products in an attractive and engaging fashion, perhaps showing how your compression garments can pair up with other articles of clothing. Also, change your displays on a regular basis to keep things looking fresh and new. (Consider taking a trip to the local mall or department store to get ideas on how to display your items.) Provide signage and product information to help the products do the selling if staff are attending to other customers. Focus on product packaging, which can often be as important as the “look” of the actual compression garments. Seek out products that are packaged like other retail items.
Also, if you are reaching out to diverse groups of compression users, make sure that your merchandising reflects that. For instance, if you are serving athletic users, as well as seniors, you might want to create separate merchandising that appeals to both sets of customers.
MAXIMIZE YOUR MARKETING
Remember that compression is largely retail. This means that if you want to boost your sales, you need to boost your marketing. Moreover, given that there is such a large and diverse range of patients that need compression the provide must develop a variety of marketing messages that will resonate with each patient group.
In terms of marketing channels, social media, email and web marketing are obvious, lower-cost starting, but because you are also reaching out to seniors, you will want to use a variety of media, including traditional formats, such as print, direct mail and possibly TV or radio.
Also, because these are retail items, seasonal marketing and special pricing promotions are essential. If DME pharmacies strategize in advance, they can create pricing and discount plans that will keep customers returning to the store to take advantage of the latest values and fashion trends.
- The market opportunity — particular in the United States — is massive and is poised for continued growth.
- Diabetic patients, seniors, and people with venous diseases are driving the growth, but there are other markets to reach, such as athletic customers.
- Because compression is essentially clothing, this is a product-driven market segment; providers must provide a wide selection of items that will appeal to a broad range of tastes.
- Just like their merchandising, providers must use a broad range of marketing channels to reach their customers.
This article originally appeared in the DME Pharmacy November 2017 issue of HME Business.
David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.