The scooter market is one of the most multi-dimensional segments of the home medical equipment industry. The variety of models and the way scooters are purchased continue to offer a plethora of choices for both consumers and HME providers. Consumers are savvy in terms of product research and knowledge, driving providers to offer a broad selection and superior customer service.
"More often than not, people who want to purchase a scooter know what they want before they walk into the door," says Cy Corgan, national sales director of retail mobility, Pride Mobility Products. "The baby boomer generation is one of the fastest-growing online populations, doing more research than ever before. End users or their caregivers go online, find the best-selling brands and have the information handy when they go to purchase a scooter."
The good news is that growth in scooter sales should continue to hold steady, or even rise, as the baby boomers age and the elderly population increases. That said, the current state of the HME industry does have an impact — and changing market conditions bring with them both challenge and opportunity for scooter providers.
"There are certainly challenges in the marketplace. For the provider, there is competitive bidding, purchase option elimination and the financial implications such as cuts in the other product categories. Competitive bidding impacts cash flow and the way they do their business," says Corgan. "However, the marketplace for scooters is very positive, and we are seeing some very good things happening."
Invacare offers a similar scenario.
"Over one-third of all scooter sales are still reimbursed rather than retail, so the 9.5 percent cut [effective in 2009] has been significant. The downturn in the economy has hurt the sales of large scooters, while sales of microportable scooters remain strong. This is because large scooters are more expensive to begin with, and, because of their size, are very rarely reimbursed due to the Medicare in-home rule," according to the company.
Despite Medicare's payment changes, "the scooter and power chair demand remains unchanged," says Jeffrey Davis, national sales manager for FreeRider Healthcare, "and, as the baby boomers' needs increase, we find the demand growing." However, he continues, "One thing is certain: Everyone has changed their direction and is moving to more cash sales."
Davis stresses that the businesses whose models change with the industry will survive — but those that continue to depend on their old ways will feel the financial crunch.
"Competitive bidding clearly affects providers and many will need to find other means to be competitive," he says. "Ideally, cash products enhance business, so finding the new innovative products that draw business in is very important."
Dale Nash, business development manager for wheelchairs for Drive Medical Design & Manufacturing, agrees there is obvious opportunity for scooters due to the country's changing demographics. Yet, he says, other factors such as strong sales and marketing efforts are in the provider's court, and he notes that HME management should consider these programs when they are trying to maximize scooter success.
He, too, notes the growth of Internet-based marketing. "Not just the traditional Internet companies are involved," Nash says, "but many providers are taking advantage of this opportunity to let future customers know where they are and what they offer and to market their business beyond traditional methods."
Consumers in the Driver's Seat
While these scooter manufacturers say research and development remains a priority, they point out that whether it is in new designs or functionality, it all boils down to what the consumer wants.
"We see that consumers want exceptional products with exceptional value that build trust in that product with exceptional design," says Corgan. "Consumers want to see that you are paying attention the little things and that the design, which is critical, works for them. People want high-end features on cost-competitive models and to make sure they are going to be happy with the product now and years from now."
One particular advance the market may see is an emphasis on lithium battery use because these batteries can offer a longer range and lifetime than a standard battery.
"We are working on lithium battery technology, which is on the horizon," Corgan says. "Lithium delivers a lot of benefits to the user and to the provider since it is an upsell product, which is something we always advise providers to consider as with all areas of retail."
But such innovations lose their value if consumers do not know where to purchase the product and providers do not understand their market, he continues.
"In the minds of the consumer, they are looking for access to the product. The demand is there and will increase. They want access and a good selection of products. So, providers have to consider what [consumers] are looking for when they come to the showroom," says Corgan.
Davis says aesthetic changes in particular have bumped the market due to demand. "New designs and colors have been the primary changes [in] revamping old models," he says, "offering more flexibility for customers [in terms of choices]."
According to Drive's Nash, most manufacturers are working on the "next generation" of products, and for some, that innovation is cutting cost. But just like HME companies, he says, "all of us are in search of that 'defining feature' for our product lines. We are looking for something to separate us from the others."
He advises providers to consider and understand some basic ideas to attract scooter customers and make the sale when they come in, among them:
- How do customers find and access scooter products?
- What drives their selection process?
- How do they purchase?
- How do they take delivery?
- How do they get that scooter serviced?
Success Relates to the Setting
Even though scooters can be funded by Medicare or paid for in cash, manufacturers believe that to grow sales in the category, it is essential that providers have a showroom that looks and feels like a retail environment — and a business model that reflects the same.
"The showroom has to be well-lit and well-merchandised with planograms and appropriate signage," says Corgan. "The staff needs to be able to answer all the customers' questions and be able to close the sale."
Corgan emphasizes that providers should adopt a "best practices" approach to retail for scooters (or for any product category) that includes:
- Creating awareness in the marketplace;
- Targeting consumers to get them in the showroom;
- A good location;
- A wide selection of models;
- Effective advertising;
- A method of collecting information on customers; and
- A well-trained staff, with employees who ask questions that can help customers through the selection process. How and where will they use the scooter? Will they travel with it? Which model will best fit their needs?
Corgan emphasizes that providers need to be "truly engaged" in boosting retail sales. "They just can't do it halfheartedly," he says. "If you are going to be in it, get in it and invest the time and resources to really make it a success."
He adds that another important component of cash sales for scooters is consumer financing. During scooter selling season when people are actively looking for these mobility products, he says, it can mean the difference in making the sale.
Invacare encourages providers who sell scooters to think about add-on sales. "New strategies such as bundling scooters with ramps or lifts and upselling scooter accessories along with every scooter sale will help maximize retail sale profits," advises the company.
Nash agrees that the cash model is appealing, and he thinks providers are just beginning to see its potential.
"Scooter providers tend to see more cash sales commonly based on the desire of the client or client's family to have the product," he says, and those customers may not be the industry's traditional Medicare client. "Remember, scooters work for the physically challenged at many levels of ability … Providers who expand their marketing vision may open these additional doors of opportunity."
Corgan adds that with the industry's current regulatory and reimbursement roadblocks, he sees providers becoming more open to getting engaged on the retail side.
"It is good for the industry for providers to expand their business model. They are not just selling a scooter but they are selling accessories for it as well. If they are into lifts and ramps, they can market it as a package," he says.
A Well-Rounded Approach
Providers who choose to invest or are already involved in the scooter market have many choices to make. One choice is determining which products they will carry. A number of manufacturers offer marketing and retail support services, so it pays to research the support that can be provided and balance that with the products that would be a compatible fit for their businesses.
"It is important, now more than ever, for providers to align themselves with a manufacturer that can help them create an economically sound, patient-first model," says Corgan, "one that will help them determine what is the right product for the patient and what is the right product for the provider to carry."
Likewise, decisions on how to advertise are essential. Marketing to consumers through newspaper advertising, direct mail and television, which may or may not be as effective, are standard practices for providers with retail operations. However, it is prudent to consider all alternatives.
Corgan says providers should make sure their current referral sources are aware they have a scooter business or are adding new products to their portfolio as they may have clients who do not qualify for a power chair but would pay out-of-pocket for a scooter.
This leads to his advice that providers should utilize all advertising and marketing to promote their company's offerings on a consistent basis, ensuring all clients know the complete line of products offered.
While a focus on scooter sales, or retail sales in general, may not completely offset the negative effects of decreasing reimbursements and competitive bidding, it does offer a growing revenue source to explore.
"The retail channel will continue to evolve, products will have to respond to new customer desires, and new price points and, possibly, new product categories, will emerge," says Nash. "As for competitive bidding, any opportunity for cash sales will help to offset losses in other product categories. This is one of many products with that capability."
Selling scooters, agrees Corgan, "is a positive way to increase cash flow. It is just a matter of making the commitment and changing the business model around slightly."
Experts Interviewed
- Cy Corgan, national sales director of retail mobility, Pride Mobility Products, Exeter, Pa.
- Jeffrey Davis, national sales manager, FreeRider Healthcare, Rancho Cucamonga, Calif.
- Dale Nash, business development manager, wheelchairs, Drive Medical Design & Manufcturing., Port Washington, N.Y.
