HME Retail Solutions

Retail's Proven Winners

Must-have categories and products that help ensure cash sales success.

HME retail winner crossing the finish lineOutlining a solid retail sale strategy can pose a tricky challenge. Providers know that retail sales are essential in helping diversify revenues in the face of reimbursement cuts, but determining which categories are right for a providers’ business, and how to sell those products isn’t exactly easy.

In aggregate, the percentage of HME provider revenue that comes from cash sales is difficult to measure, but Maria Markusen, director of development for VGM Retail, says that the number of VGM members contacting the organization to discuss how to implement retail has at least tripled since the beginning of this year.

Markusen notes that generally, those HME providers who have implemented cash sale strategies have seen some measure of success but many providers have not had enough time to move beyond the ramp up to obtain results.

“Those folks who are successful also implemented an inventory and product management plan and a focused marketing plan to propel them into success,” she explains.

According to Kamal Haddad, founder and CEO of HME e-commerce company Health Mobius LLC, many HME providers should be generating more than 30 percent of their revenue from retail cash sales.

“If they are not,” he says, “they should be asking, ‘Why am I not?’ and ‘How can I?’ Just about every funded item has an alternative premium upgrade choice. They also have a number of accessories or complementary items that are used in combination. It’s easy to display the accessories in-store even when the inventory is not onsite by placing the order on your company e-commerce website and having it drop shipped direct to the patient.”

If anything, tapping into top-performing retail categories could be the smartest approach for providers. If they pursue known top sellers, they should be able to get closer to the the 30 percent that Haddad highlights. To dig deeper, HME Business magazine asked a panel of retail experts to discuss must-have retail categories and products and ways they can help you grow your bottom line.

Rob Baumhover, director of VGM Retail

Category: Sleep

Products: Sheets, mattress protector, pillows, back wedge, eye mask, aromatherapy, sleep machines

Category: Bath safety

Products: Bath seats, transfer bench, grab bars, tub bar, non-slip mat and treads, shower head, bath aids, toilet seat riser and safety frame

What makes these items a necessity is the fact that every customer shopping for an item within these two categories needs at least one of the additional items listed as well. It’s what we call Incremental sales or add-ons (see “How Incremental Sales Can Help Your Business”). If you sell the customer a bed, why would you leave them to go elsewhere to get the accessories when they need the items now and you have access to them?

Selling strategies: Make sure everyone is trained on the features and benefits of all the products. Group the products together so it makes it easier for the customers to see everything they would need, and for the convenience of your sales associate when showing them everything. Also, be in stock – it’s much easier to sell an item if you have it there for the customer to touch and feel. Lastly, have the products signed and priced.

Tom Musone, marketing director for Juzo

Category: Compression

Products: compression socks, stockings and sleeves

Strategy: Dealers should cater to the retail-side and medical aspect of their business. The medical side is primarily driven by physician referrals/prescriptions, but as a strategic sales driver, dealers can offer products for more than one condition that impacts circulation. If they are carrying products to help manage lymphedema, why not also cater to vascular conditions? If you carry an inventory of compression garments that are beneficial for both categories, you’ll increase sales overall.

With the unpredictable healthcare landscape and insurance reduction or elimination, dealers have to focus on the retail side, as well. This means showcasing products that benefit customers beyond patients with a medical need. For example, a breast cancer survivor may want a compression sleeve as a preventative measure against developing lymphedema. Healthcare workers who are on their feet all day are likely interested in compression socks or leggings, though they don’t have a medical condition. Both are likely familiar with the HME business, but may not have considered becoming a customer until they get familiar with such products.

To capitalize on retail/cash sales, dealers need to merchandise properly to highlight these products. By allocating ample space to display the right product mix of compression socks, stockings and sleeves in various colors and prints to highlight the fashionable aspect, as well as an adequate size variety, customers will be drawn to at least browse through the selection.

Dealers’ product knowledge is equally important to drive cash sales. By understanding customers’ needs or anticipating their interest based on lifestyle or browsing behavior, a salesperson can point customers to multiple products that can benefit them. Also, if dealers are knowledgeable of a customer’s condition and recommends products that aid in treatment or management, the customer will view the dealers as authorities and develop a trust in their suggestions. Customers are more likely to repeat when they know they’ll receive great products, service and counsel.

Community engagement is another tactic. When customers know that a dealer gives back to the community via event sponsorships, charitable giveaways or partnerships with non-profit organizations, they feel better about giving them their business over a competitor.

Lisa Wells, vice president of marketing for Cure Medical

Category: Incontinence

Products: Catheters and adult diapers

Category: If you want to beat Amazon at its own game in the cash sales market, become an expert in the following product categories. When you do, you’ll run circles around impersonal, off-shored support teams who don’t understand your customers: Aids to daily living, support surfaces, mobility products, nutritional supplements, disposable supplies, including Incontinence, personal care and sleep comfort aids.

Strategy: At Cure Medical, we have found that insurance may not pay for the entire month’s usage of catheters for those who rely on them. Some end users surpass the 200 per month allowable cap on intermittent catheters, so they fill in the gap by paying cash for extras. Also, they may prefer specialty products, like closed systems when traveling or pocket catheters when playing sports. If these items fall outside of their approved items, they’ll be willing to pay cash for the convenience.

Adult diapers are generally cash pay, too, so if you aren’t offering these to your existing catheter users, you are missing an opportunity to generate a new line of recurring monthly cash flow for your business.

Brandon Noble, director of medical sales and marketing for Vionic Group LLC

Category: Orthotic footwear

Products: Slippers and Sandals

Strategy: The idea behind the slipper category is it’s your customer’s first morning step out of bed to alleviate heal pain and to keep their feet, shins and knees from hurting. To successfully sell through the product, we recommend that providers use what we call the hang sell type environment. Basically the product is hanging out on a hook with front and center placement under a category of pain relief. It’s key for the store associate to be educated on the how, what the product does, and what it can do for their customers. The majority of people walking into your store are not there because they feel good — it’s because something’s wrong. So understanding the pain relief category, which is probably the biggest retail category out there, and that there’s profit to be made off of it is key.

The second product is sandals. In the sandal category, there is the typical flip-flop tong-type and then there’s the slide and backstrap type. The sandal category as a whole in the consumer footwear world is actually the fastest growing category in the industry. So with that mindset — and going back to the natural pain relief category— you can provide the patient something in a sandal that’s actually supported. When do you actually go out to any other store and find a healthy sandal that is going to help relieve pain? From ages 20 to 80, people are still wearing sandals and a lot longer than they have historically. So that’s the opportunity. It’s growing and people want to be in them. They want to free their feet, especially in the summer.

Also, whenever you implement retail, don’t set out going 100 miles per hour. Retail is a slow to crescendo business model. So Month 1, shoot for $500, Month 2, $1,000, etc. Don’t get anxious if you’re not at $10,000 a month, even within your first year. Retail takes time to establish but it’s a reliable business that brings in new customers even for other products. So that’s the biggest thing that we find is sometimes providers get antsy and they expect to be millionaires overnight and it doesn’t work that way.

Finally, a good retail operation will have inventory costs. You can’t order one or two products at a time and run a good retail operation on a set route. We have seen that consistent message over and over again. If you want to be a part-time retailer, don’t do it. If you are committed to full time retail, that’s where the success comes from.

Kamal Haddad, founder and CEO of Health Mobius LLC

Picking the right product category is easy: It’s what you know your customer is already buying elsewhere. When they get a wheelchair, walker or bed from you, you know they are buying bath safety, aids for daily living, incontinence, pain relief and other items to keep them more active and make their life more comfortable. To build a successful retail business you must offer products that complement your current funded products and services. Focus on accessories and cash sale items that complement the products and services you already offer and your patients will benefit from.

Much more important than the category may be the supplier you chose to work with that offers these products. Think service over product. What do your customers need? If you can’t stock everything they need, can you get it fast? Are inventory levels and product availability accurate on your point of sale system or website? Can the item be drop shipped direct to the patient’s home via an easy interface? Can it be ordered online on your website? If you think about merchandising and providing information on your website in the same way as in-store, you will be able to capture more sales opportunities.

There are many tools available today that will manage your online catalog and can link up the ordering of drop shipped items on the back end. Use those tools in addition to your in-store marketing to gain maximum results. Tools to consider include ARI, VGM Forbin and Health Mobius.

This article originally appeared in the March 2017 issue of HME Business.

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