Independent pharmacy owners need to pay more attention to the front end of their store.
Independent and small chain pharmacy owners are often far too busy to focus on creating success through OTC retail sales—understandably so. They face the trifecta of dispensing lifesaving medications, honoring their Hippocratic Oath, and focusing on getting remuneration from insurance companies. Finally, they must deal with the overall management responsibilities inherent in owning a retail business with employees, and all that comes with it.
How and why should they pay attention to that vast wasteland of their front end? Let’s start with some essential truths: Americans—and plenty of humans worldwide—are true red, white, and blue consumers. I contend that as soon as your customers hand off their prescriptions, they often scratch their bottom and look for something to eat, drink, or read. If they’re elderly or ailing, they usually look for somewhere to get off their feet.
I focus on these obvious human behaviors because recognizing them is the foundation of successful retailing. Where your patients sit or congregate are the prime locations to merchandise products that are purchased impulsively. All pharmacies are provided with, and utilize, their drug wholesalers’ OTC products planogram. There are departments of analgesics, cough and cold remedies, foot care, and so on. If someone needs these products, they will seek them out or ask for help finding them. Most of these departments are critical and are required to take care of patients’ needs. But a pitfall of these departments is that they’re based on national averages; there are bound to be non-selling items taking up space and creating non-income producing inventory. Additionally, many of these items can be found anywhere, often at a discounted price—particularly in the major chains. Even so, these products are a necessary evil. But these issues can be mitigated by culling out the “dogs” and through creativity elsewhere in the store.
To create change in any business, it is helpful to take an alternative outside view. If any retailer looks down at their product mix and departments, they might come to some rather easy, obvious conclusions. For example, if a store had 20 feet of greeting cards displayed on old, discolored metal shelving, a business owner might quickly guess that, with people texting and emailing assorted greetings, there may have been a drop-off in these sales. They might imagine a terrific variety of cards in only 10 feet of space, presented on an upgraded display. With an inventory-reducing sale, they would (1) lower their inventory to an appropriate level and (2) make available space for a fresh, new department with sales-producing merchandise. This isn’t an attack on the greeting card industry, but an example to make a point.
Another general no-no in retailing is holding on to dead merchandise. I once stood in an average-size pharmacy with small front counter. Although there was limited room available, they found the space to display a small, cut-open cardboard box containing assorted discolored greeting cards for 10 cents each! If asked, I would have recommended that they burn them—or at least toss them in the trash—and instead use that limited, precious, highly viewed space to display a tester of either a specialty hand lotion or pain relief cream, something not available at a chain store. The resulting sales are an obvious, immediate win, and the potential of creating future refill sales from those limited-availability products is often more important. Decisions like those can turn the store into a go-to destination for sought-after specialty brands and products. Making a store unique, interesting, and visually appealing can be rather easily accomplished, and presenting new, impulsively purchased items that have counter or floor displays—provided by manufacturers!—can create quick, long-term results.
Recognizing categories of items that show movement offers an opportunity to add companion products to build success. Snacks, candy, gifts, toys, cell phone accessories, and crossover health food industry alternative remedies are some great options.
At the end of the day, additions, subtractions, and moving around products and departments will make a substantial impact on a pharmacy’s bottom line. Recruiting an employee to aid in the project can be very helpful, and great improvements can often be accomplished quickly and with relative ease. Remember, you’re paying rent for that front-end real estate; it should help pay the light bill and the rent as well!!
We must be prepared for successes and failures in our selection of new product mixes. It’s always wise to walk before we run amok. Close out mistakes and expand or evolve successes. Many improvements take mindful, but minimal, effort. Success breeds success, so the process can be mildly addictive. Take these suggestions as prescribed, and remember to have fun along the way and bank the fruits of your labor.
Dan Langerman is the owner of Langermania.