February 21, 2019
Inside: The front end of your store requires a different strategy from the pharmacy side of your business. Avoid these nine merchandising mistakes that could be stalling your retail sales.
Running an independent community pharmacy means wearing a lot of hats. For many pharmacists, the role of merchandising expert doesn’t come naturally—but it’s important.
Good merchandising can make or break your front-end sales. And front-end sales can keep your business afloat while drug reimbursement rates continue to shrink.
If you’re making these common mistakes, you’re missing out on front-end sales. Here are nine errors to look out for and how to avoid them.
Planograms are guides for arranging retail shelves to maximize front-end sales.
These visual diagrams show pharmacies exactly where to place their front-end products. They offer a plan based on research-backed factors indicating products should increase profits and turn quickly.
Companies like Hamacher Resource Group and some wholesalers use your sales data to design the optimal product arrangement for you.
Here are just some of the factors HRG considers when determining product placement:
Doing this yourself would take extensive time and energy, and you still might not do it as well as professional analysts. So it’s best to leave this to the experts.
Optimal product placement is an easy way to increase front-end sales. But that means you have to know what products your customers want.
Make sure you never run out of inventory in the top five categories for independent pharmacies:
It may make sense to add additional products to your pharmacy’s list of “never-outs.” If you live in a seasonal allergy hotbed, antihistamines might be products you take care to stock continuously. In a desert climate, items like lip care and body lotion might be nonnegotiable. To get a good idea of what sells in your pharmacy, mine your store’s data.
If you’ve got items that consistently don’t sell, it’s probably time to evaluate whether you should stock them at all. Every inch of shelf dedicated to an item that won’t move is space that could go toward a high-margin, fast-moving product.
Private label products are some of the most lucrative items in your front end. They give you better margins than the national brands—sometimes as much as 70 percent.
Place your private label version of a specific item right next to the national brand version so patients know they’re equivalent products. They’ll also see the prices side-by-side, and the lower price for a private label product is often compelling.
Although you may want to showcase the items you carefully selected from thousands of available products, having more options than you’ve got room for can make your front end seem messy, and even discourage customers from shopping at your store.
Clean, thoroughly stocked shelves will impress your pharmacy shoppers and encourage impulse purchases. It’s important to find the right balance of items to place around your front end.
Cluttered, crowded shelves are an eyesore, but shelves left half-full can be even worse. Gaps and sparsely filled spaces will make your pharmacy feel like a forgotten museum, not an active, modern business. Patients will wonder if you’re in danger of closing soon or having some other problem that prevents you from fully stocking your front end.
Take a look around your store. Are there any barren areas that need attention? You may be able to solve the problem by rearranging products you already have. If not, it’s probably time to order more inventory.
Reorganizing and updating your pharmacy’s front end will help guide customers to where you want them. For example, experts say 90 percent of customers will turn right after entering a store. Are you using the space to the right of your entrance to play up high-margin products or build an eye-catching display? You should be.
Continuous change will have patients strolling through your aisles each time they visit your store. Grocery stores are experts at this: You never know just what will be featured on the end caps each week. So take a page from the grocer’s playbook. If you aren’t rearranging end caps at least every two weeks or resetting your pharmacy’s planograms once a year, customers may have less reason to watch the end caps.
That doesn’t mean you should move things around just to change things up. Repeat patients will expect products to be more or less in the same place at each visit. Instead, focus your freshening up on end caps and check-out displays.
One way to freshen up a boring store arrangement is to play to the season. Think about what holidays, popular activities, and traditions are coming up and use your endcaps to feature relevant products. For example, a smart choice in the summer might be a display of sunscreen, aloe vera, and bug spray.
Your front end is naturally dominated by visual stimuli. But to set yourself apart—especially against online retailers—try engaging patients’ sense of touch, smell, sound, and even taste.
If you know merchandising isn’t your strong suit, you should know the value of a front-end manager. Having a dedicated member of your staff to focus entirely on your pharmacy’s front end can maximize sales and help things run smoothly while you focus on running the pharmacy side of things.
Avoid these merchandising mistakes to strengthen your front-end sales.
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy side of their business. The company is an independently owned pharmacy services organization based in Kansas City, Mo., that serves independent pharmacies with group purchasing services, expert contract negotiations, distribution services, and more.
PBA Health, an HDA member, operates its own VAWD-certified warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products.
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