Recent consumer research conducted by the National Association of Community Pharmacists (NCPA) illuminates some interesting differences in perceptions between what pharmacists think their customers want and what those customers actually desire. Such research can help direct decisions about what to stock in the pharmacy’s front end. In particular, consumers are looking for health and wellness services and information to aid their pursuit of a healthy lifestyle and want a wide variety of information related to wellness. This is an area that independent pharmacists perceived to be less of a need than the actual research shows and attention to health and wellness items as well as core departments is important when making layout and stocking decisions.
When looking strategically at the pharmacy’s front-end, appearances and strategic pricing do matter. Ensuring the pharmacy has attractive and neat signage both inside and out, bright lighting and wide aisles, and neat, up-to-date décor. Some pharmacists make it a point to walk the perimeter of their buildings at least weekly to ensure the exterior is operating and is as inviting as planned. Carrying the same thematic and color scheme both inside and outside the pharmacy is a proven winner. Once inside, ensuring appropriate inventory levels, clean products and shelving, and up-to-date promotions is key to success.
Core departments should be near one another. These include analgesics, cough and cold, antacids/laxatives/digestive health, first aid, foot care, oral care and hygiene, personal care and hygiene products (hair care, deodorant, lotions), baby care, and vitamins/minerals/supplements and nutrition. Durable medical equipment and home medical devices should also be nearby. Beauty categories should be bridged by the personal care products. Having a waiting area near the pharmacy with a variety of health and wellness oriented materials is important. Some pharmacies convert this low-traffic area into classrooms to support disease management activities and seminars. Others have used televisions and kiosks to support health-related information delivery and promotional messaging.
Pharmacists are not trained to be merchandising experts but can tap into that expertise among a number of their partners. These may include their wholesaler, buying group or other vendors that specialize in designing front-end layouts, provide planograms, and offer other category management services, including competitive pricing programs. It is important to not “over” fixture a store, a common mistake seen by some front-end specialists, who advocate for ensuring the pharmacy has enough space to display the merchandise neatly while focusing on creating those wide aisles and attractive spaces consumers are seeking. Another common pitfall to avoid is stocking one or two of each front end product which can leave the customer with the sense the pharmacy is not doing well or going out of business compared to their experiences at other retail formats.
Strategic pricing of front-end products is also critical in today’s economic environment. Understanding which items have the most price sensitivity on the part of consumers is a place to start. These are items that customers buy or use each day, week or month. Think about hair care, oral care and personal care items. One front-end consultant, Gabe Trahan, suggests keeping these items at cost plus 15 percent to remain competitive. By pricing competitively, the pharmacy can see increased sales of front-end items, helping the entire pharmacy “foot print” contribute to profitability. Knowing the pharmacy’s demographics and customer mix is critical to creating a front-end that is effective. The pharmacist/owner sees their customers everyday and has a feel for those demographics. However, having a point-of-sale system can help provide further analysis of front-end merchandise and allow integration for selling OTC and other front-end items with prescriptions dispensed.
Keep up with front-end trends and ideas through Gabe Trahan’s featured columns in NCPA’s monthly magazine, America’s Pharmacist. Gabe has an independent retail consulting practice and works closely with NCPA on merchandising issues. Another good resource for staying current on new products and OTC items are the Product Showcase and OTC Today features in the monthly magazine, Pharmacy Today, published by the American Pharmacists Association. Each February the magazine has a separate focus on the top pharmacist-recommended OTC products.
While many pharmacies have ventured into cards, gifts, and other departments, it is important to remember the pharmacy’s core business first and foremost is healthcare. Review of the pharmacy’s selection of health and wellness items should be a point of analysis given the results of the NCPA consumer research. At the end of the day, the best run pharmacies are those that are visually appealing, well organized and neat. A well-planned and executed front-end strategy can contribute to the pharmacy’s overall success and position it as a health care destination for consumers.
To download a copy of this article, click here: Stocking the Pharmacy: Stick to the Basics