The HME Retail Revolution
I receive weekly e-mails and calls from home medical equipment (HME) providers who want to become retailers. Unfortunately, most of them are not successful in this niche because they fail to understand that they must adopt a new and different business model. Thinking retail is not natural if you operate a traditional reimbursement-driven HME business. The following questions should be taken into consideration:
- How do retail HME businesses operate differently than traditional models?
- How can you convert Medicare patients into retail cash customers?
- What changes need to made when transitioning into retail?
- How can you attract new customers and sales on a daily basis?
The following article will provide you with important guidelines to follow when transitioning into retail HME.
Location, Location, Location
Retail businesses offer physical locations that are highly visible, easily accessible and convenient. They are easy to see and pull into, and they provide an easy shopping experience in which it’s easy to park near the entrance, check out and exit. Just visit any national retail chain, fast-food franchise or chain drug store location to see how these components fit and flow together.
Warehouse vs. Retail
In contrast, traditional HME businesses are usually hidden within commercial areas or industrial parks where they benefit from paying low warehouse rental rates. Even armed with a GPS, most retail customers couldn’t find their locations easily.
If your business is far away from other retail businesses, then you will never benefit from impulse customers who happen to drive or walk by your location. You must spend significant sums of money to attract consumers to your location via continuous advertising that is usually more expensive than the gross sales you generate. Translation: if you’re not in an accessible location, retail will be a money-losing proposition for you.
I was recently asked during a presentation by a traditional HME provider if I could help them convert the 200 square-foot office area in the front of their warehouse into a retail showroom. When I politely explained why the answer was “no” at their current location, they still did not understand why they would not be successful in retail. Please remember the above differences between our two business models before you jump into retail.