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Why retail matters & how to incorporate it into your HME business

Home medical equipment (HME) businesses already provide crucial, lifesaving, health-enhancing equipment and products. Adding retail to your offerings helps support revenue growth and strengthens customer loyalty.

In 2020, retail/patient paid as a payer type increased 40% as a percentage of total revenues.1

"Who doesn't want or need additional revenue for their business?" says Rob Baumhover, director, VGM Retail. However, increasing revenue is only one reason to add retail to the mix.

"With the addition of new cash items, you become the go-to shop for all things within that category, and a one-stop-shop for customers," Baumhover says.

This adds ease and convenience to your customers' shopping experience.

"Now your customers don't have to go elsewhere to find the accessories they'll need, and [get to] keep their daily routine as normal as it can be," he says. 

And by serving customers in person, you become a "trusted partner" in patients' health care because your staff helps customers find what they need, when they need it.

How should you start?

While adding retail or growing your existing retail mix may seem like a daunting task, it doesn't have to be, Baumhover says. He suggests businesses dive into retail by adding cash products in categories they're already known for.

"I'd say start with your top two to three categories. That's a lot less risky than going out and buying hundreds if not thousands of dollars' worth of products in a new category that may be a little out of you or your staff's wheelhouse," Baumhover says.

By adding cash items to your top sellers, you're already attracting the right customer to the right product, he adds, which may translate to less marketing effort needed.

Seek customer input to support "caretailing"

Once you benefit from carrying additional cash items in categories you're already known for, "it's time to dive into new categories and retail products," Baumhover says.

The best source to uncover what you should sell for cash is your existing customer base. "These folks already know you, trust you, so they'll be open and honest on what they'd need and want. I've seen it firsthand that some of the bestselling items came from customers' suggestions."

This also enables businesses to move into "caretailing" — where providers tailor sales to the customers they already have, helping them feel seen and provided for.

"A caretailing-centered provider creates an unrivaled experience encompassing a customized, needs-based strategy specific to each customer."1 — Think bigger: A retail playbook

Check out our ebook, Think bigger: A retail playbook for more insights into launching retail in your HME.

What lines should you carry?

If your customers provide many suggestions, consider narrowing down your list. Baumhover recommends starting in two areas:

  • Pain management
  • Mom & baby

"Providers have had great success [with these product lines] as people from all age groups have aches and pains, and babies will continue to be born," he says.

Additionally, Baumhover says, vendors and distributors are great sources of information about which products to bring in.

"Have the vendor show you all the bells and whistles, or have them send you a sample so you can compare to other like products," he says. You can also analyze what your competitors are carrying, especially if they're successful.1

Manage your inventory

Having new retail products may make your business feel more productive right away, but avoid excess inventory.

Monitoring your inventory is crucial to keep it moving, according to HME News. It's easiest if you use a software that tracks inventory as opposed to doing so manually. When you digitally track your inventory as it comes and goes, you can also easily identify and promote popular products to sell them even more quickly.2

Identifying your top selling categories, or "bread and butter categories" as Baumhover calls them, will help determine which retail products are worth buying in more quantities.

Also, reorder only when necessary to help find the balance between ordering just the right amount of retail product and having too little of it. For optimal success, run inventory reports daily, weekly, monthly, quarterly and annually.1

"The most successful retailers know the cash items that are driving their business and which ones aren't," Baumhover says. "This allows retailers to have the right items and the right amount of inventory on-hand and to merchandise the products appropriately."

Prepare for the retail sales floor


The goal of your retail sales floor is to create an environment that feels welcoming and reflects health and wellness. This can mean replacing old fixtures, putting up new signs, or using color and lighting strategically.

Colors can impact your customers' experience.

  • Use bright, warm colors, like red, orange and yellow, to draw customers' attention to a new product
  • Invite people to feel healthy and calm with the use of greens and blues
  • Or, use black as an accent color, but only in signage and displays, and use white for a crisp, clean look

Of course, subtlety is key with color. Too much of any shade can overwhelm or discourage shopping.1


Once your new retail products have arrived, display them with the customer in mind for maximum sales.

"First, pull all like items into categories," Baumhover suggests. "This will make it easy for customers and staff to see everything you have, making the shopping experience simple."

An example of this can include putting all CPAP items together in the right kind of display that fits the packaging, such as a slat wall section, a floor fixture, or a custom fixture, he explains.

Baumhover also suggests providers keep their best sellers near the top of any display using the 80/20 rule: "20 percent of your items do 80 percent of the business." Then, he suggests stocking middle sellers below that, and lowest sellers at the bottom.

"If you don't have data showing this information out of the gate, ask your suppliers to share which items performed best based on like demographics."

Check out our retail merchandising planners for guidance on how to display your retails products for key categories:

How to market your new retail products

Provide the right training/staff

Retail products won't just sell themselves. Baumhover stresses it's important to train staff on the retail products you're selling, and to have at least one dedicated retail staff member to interact with customers. This sales representative should have excellent, in-depth education on retail products and their uses.

"I'd recommend this employee be a designated retail person who does all the welcoming and qualifying of customers, while other staff are focused on customer insurance needs," Baumhover says.

Distributors and manufacturers can also help you sell retail products. Ask about training they can provide to help build your staff's product knowledge and increase your chances at selling.1

Encourage word-of-mouth

Baumhover says that customer word-of-mouth is often the most effective marketing tool.

"Provide top-notch service, carry items customers need and want, and let them and your referral sources do the work for you," he says.

Know your target consumer

You may also want to run analytics to determine the demographics of your customers . For example, marketing to Gen X — who are juggling jobs, families and other responsibilities — may look different than marketing to the elderly, who are often retired and have more time to shop.1

Use social media

Baumhover also recommends providers use social media to spread the word. "In today's world, everyone has it, and everyone is using it."

Consider the target demographic, and then identify which social media platform aligns to your customer target. Bonus: Advertising on social media platforms is a highly affordable way to get the message out about your products and services.

Reward loyalty

Repeat customers will bring you more business than new ones. In fact, your most loyal customers are spending 67% more on average than new ones, according to Bain & Company.3

Loyal customers not only shop more, they also refer other customers to you.

Consider implementing some sort of retail loyalty program with financial incentives to both attract new customers and reward existing ones. Whether they receive discounts on products or cash back, a loyalty program can make customers feel special.1

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