Call it a historical fact. The home medical equipment industry is a service — not a retail — industry. But in the age HME is entering now, and with an aging population willing to pay for products that will keep them active, retail could help save endangered small companies by shoring up sagging bottom lines.
Certainly that has been the mantra of many industry consultants over the years, and it's a cry that has grown louder as HME has lately been hammered by legislative and regulatory mandates that threaten the very life of many companies.
Meet two companies that, while accredited and accepting Medicare assignment, also have managed to build strong and successful retail divisions.
Sparrow Regional Medical Supply
Lansing, Mich.
From its beginning 22 years ago, retail was an integral part of full-line HME Sparrow Regional Medical Supply.
“From day one, we've had retail,” says Darwin Brewster, company director. The company's major product lines are oxygen, CPAP and diabetic supplies, but through the years, the retail segment has grown steadily, particularly in the flagship Lansing store, one of five Sparrow locations.
“Our retail has gotten so busy we need to add some customer service reps up front,” Brewster says.
Now, the retail part of the Lansing operation accounts for about one-third of the location's business. “We get a little less than 3,000 walk-ins a month,” says Brewster.
Perhaps people are drawn by the recently remodeled store. It's bright and spacious at over 3,500 square feet, as Brewster describes. “It's not some dark, dingy place. It's got nice, high ceilings and a lot of light. I think [customers] feel more comfortable.”
Guided by the idea that the customer comes first — “How would you like to be treated if you were the customer?” Brewster asks — the company created a retail setting designed to be customer-friendly.
Plentiful signage points people to various products, which are attractively displayed along walls and in home-like settings that show off products. “We actually have bathroom displays with tubs and showers; same thing with bed products,” notes Brewster. The CPAP section features glass mannequin heads fitted with various masks and cannulas “so people can see what they really look like.”
Prior to the remodel, there was a problem with people waiting to be checked out. It was lost time to them and sometimes they just walked out of the store, Brewster recalls. Sparrow brought in Lisle, Ill.-based Gladson Design Group to help.
“We asked Gladson to come in and do a customer flow for us and show us how to keep folks busy so they just don't stand in line and walk out,” Brewster says.
Now customers “take a number and then they are free to browse the store,” he says. “Then, when one of the five customer service reps calls them up, they can take care of whatever they came in for and, if they found anything else while they were browsing, they can take care of that, too.”
Another happy feature was designed with kids in mind.
“One of the neatest things … is a children's area,” Brewster says. “The kids can be watching TV or playing with blocks or reading books, whatever they want to do. They're not climbing all over the scooters anymore or making the lift chairs go up and down.”
The changes have been so positive that Brewster says the look is likely to be repeated as Sparrow's other locations are remodeled. “As we move stores and remodel, we are remodeling them with the same fixtures so that when customers walk in they get that consistent feel,” he says.
The retail segment has been a boon, he adds, strengthening Sparrow's ties with its customers, bolstering the bottom line and also saving on delivery costs.
Capitalizing on that, Sparrow's customers can call in or go online to order products, which can then be picked up at any of its locations. It's just another way of “treating people the way you want to be treated.
“That's the way to go,” Brewster says.
Central Nebraska Home Care
Kearney, Neb.
You could say that Central Nebraska Home Care is structured around the three Rs: retail, respiratory and repair. It is a focus that has paid off.
In the 23 years since CNHC was formed as a joint venture between two Catholic Healthcare Initiative hospitals — Good Samaritan in Kearney and St. Francis Medical in Grand Island — its retail segment especially has not only been a stable source of revenue, it's been a growing one.
And that's nothing to sneeze at in an industry that is currently defined by turmoil and decreasing profits. While CNHC is a full-line HME company specializing in clinical respiratory equipment, like nearly all such companies, it is susceptible to the industry's mercurial legislative and regulatory twists and turns. The retail segment of the business has helped the company weather the frequent storms.
“It keeps growing,” says Jerry Culver, RRT, general manager. “Retail has always been a very significant part of our business, about 30 percent. It's very steady.”
That isn't by chance. Culver and his 30-member staff are deliberate in their retail offerings and the way they are displayed. Gladson designed the retail space, which is about 1,500 square feet, Culver says, and together they created a showroom that is easy for customers to get around.
“We designed a floor plan that is very open so the customers walk in and can immediately identify the products that they are looking for,” Culver says.
Overhead signs point people in the right direction, and customers find complementary products clustered together — walkers with reachers, for example. A hospital bed is featured with a patient lift and a portable bedside table. The bed is dressed in a stylish comforter for a more home-like appearance.
“The most common things that people come into the store for are up front — canes, walkers, bath benches, toilet seat risers, grab bars,” says Culver. Such products draw customers in off the street, but if they purchase something, they don't get out without seeing the whole store.
“Our customer service counter is in the rear so customers have to walk through the whole showroom,” Culver explains.
He and his customer service manager keep a close eye on what is selling — and what isn't.
When Culver came on board a few years ago, he found obsolete products that had sat on the shelves and on the floor for months, even years. He eliminated them and hired a customer service manager who is empowered to track requests and add new items.
Products are rearranged as needed. “Retail changes quite a bit. We had a whole wall dedicated to diapers and pads and it just wasn't moving. So we … put them into a smaller area and used [the larger space] for lift chairs, which were moving,” Culver says.
While he has discontinued some items, not everything has to have a high margin for CNHC to carry it, he notes.
“We have four national companies in both of our service areas,” Culver points out. “What makes us different is the fact that we carry a lot of items they will not carry, because they tend to carry only high-gross product lines. We carry products that don't carry a high-gross profit, but without our service, beneficiaries would have a difficult time trying to locate these items. We're kind of a convenient source for them,” Culver says.
“Convenience” is a key word for customers, he notes, particularly when you're involved in retail. The space must be conveniently laid out so people can get around easily and find what they are looking for. Even the parking must be convenient.
“Parking concerns are often an issue for the elderly,” Culver observes, noting that parking lots without enough spaces or that are at a distance from the store become too inconvenient for prospective buyers.
But perhaps the most important factor is where the store is located, according to Culver. A retail store must have sufficient foot and drive-by traffic, he notes.
“If I had to underscore one of the most important parts of doing retail, it would be location,” he says. “To be successful as a retail business, your location is primary.”
5 Tips For Successful Retail Spaces
Take it from the experts. Both Darwin Brewster, director of Sparrow Regional Medical Supply in Lansing, Mich., and Jerry Culver, RRT, general manager of Central Nebraska Home Care in Kearney, oversee home medical equipment companies that boast successful retail divisions. Here are the five key elements that Brewster and Culver say can help create a successful retail showroom.
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Location is key. A showroom must be visible and have a lot of foot and drive-by traffic.
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Plentiful parking is a must, and the parking spaces should not be too far from your front door.
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An open floor plan allows customers to locate products easily and navigate around the showroom.
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A children's area with toys, books and a TV showing children's videos allows parents and grandparents to shop in a more leisurely manner — and it helps keep youngsters from climbing on products.
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Light and bright showrooms are more inviting to customers and go far in highlighting products.
