How to Apply Customer Buying Habits to Your Pharmacy's Front End
By Kristine Cosmai
As independent pharmacies continue to fight for fair reimbursement, business diversification and knowing how to increase pharmacy front-end sales is becoming increasingly critical to their longevity. This is a constant struggle for many pharmacies that have traditionally concentrated solely on the prescription side of the business, but consistently prioritizing two bedrock concepts can be the key to unlocking the full potential of your front end.
First, you need to uphold good store standards, which means properly placing products, making sure they're sufficiently stocked and keeping the store clean and organized. Second, you have to engage patients through the lens of personalization and strong customer service. For example, rather than guessing what supplements your customers may be looking for, you can identify a subset of patients who are taking certain medications and make it standard practice to recommend a supplement that will complement their therapy. In other words, when you focus on the needs of your patients, you’ll start to generate better ideas to increase pharmacy sales and have an easier time putting those new tactics into action.
Fortunately, just about any independent pharmacy merchandising strategy can succeed if you apply the right mix of proactive and reactive measures. Let's dive deeper into each area.
One of the best places to start when looking to bolster your front end is by using independent pharmacy planograms. These schematic renderings, available in standard increments from four to 16 feet, depict how your shelves should look to consumers based on the findings of comprehensive buying habit research. Planograms bring structure and sequence to specific product categories, enabling prospective buyers to readily find what they need and compare similar items. Studies show a direct correlation between planogram use and increased unit sales.
At the same time, however, leveraging your own data collected at the point-of-sale (POS) registers in your store also plays an important role in determining the best things to sell in a pharmacy that serves your unique community. Intuitively, it makes sense to refine your pharmacy's list of products sold by tracking metrics such as retail dollars per unit, gross margins and profit per acquisition cost—all of which can be gathered and examined through your POS system. This can also be done with the help of a trusted vendor partner that has pharmacy analytics expertise.
In practical terms, use POS data to identify what's selling well and then consider how to capitalize on those items. For example, you may find that probiotics and other supplements have been outperforming oral care products, but both categories occupy 12 feet of shelf space. A reasonable adjustment would be to devote 16 feet of space to supplements and 8 feet to oral care.
It's also essential to gain a strong understanding of the demographics of your customer base. In short, know who's shopping in your store. A straightforward online search of U.S. Census data can reveal your patient community's average age, gender designation, education and income. Use that information to inform your product-selection decisions. For instance, if your store serves a predominantly low-income population, you'd likely do better by displaying generic OTC items more prominently rather than showcasing their name-brand counterparts. Conversely, if you're located in a relatively affluent area, you might do well by ramping up offerings of high-end skin care.
In any case, be sure to evaluate product placements at least annually in terms of sales by category and shelf-space allocations.
Besides the analytical approaches described above, you should also devote time and effort to observational assessment and customer engagement.
When customers are waiting for their prescription fills, take notice of where in the store they tend to gravitate. Also watch the path they take to do their browsing. If a display or category seems to be attracting more attention than others, a good option may be to move it to a more prominent location, such as an end cap.
In addition, your pharmacy's culture, from top to bottom, should reflect an ongoing commitment to customer satisfaction. Just as you counsel patients with their prescription medications, you want to make sure you’re guiding your customers to the products they need in the front end of the store, too. Put popular products in easy-to-spot areas. Help customers compare similar items. Make thoughtful recommendations if you don't have a customer’s preferred item or offer to order it so they can pick it up the next day. And take a cue when multiple customers ask for the same product; if you don't regularly stock it, you should start doing so.
Finally, keep an eye on new products that resonate with consumers. Bear in mind that manufacturers spend most of the advertising dollars on new product rollouts. When you see or hear commercials for items that would work well in your community, strive to get those products on you shelves as quickly as you can. In today's environment, consumers are particularly focused on keeping their home medicine chest fully stocked. A special shelf section or end-cap display devoted to products such as thermometers, sanitizers, gloves, masks, vitamins and pain relievers should do well for the foreseeable future.
When you know what's working well, and then follow through with solid execution of independent pharmacy planograms, store standards and customer engagement, you can expect your efforts to drive extra sales.