HME Providers Move into Wal-Mart

On March 17, Lake Forest, Calif.-based Apria Healthcare opened a pilot store inside a Duncanville (Dallas), Texas, Wal-Mart.

The Scooter Store, New Braunfels, Texas, is running branches in Wal-Marts in Montgomery, Ala.; Daytona Beach and Pensacola, Fla.; Hendersonville, N.C.; and Fort Worth, Texas.

Salem, Mass., provider Hutchinson Medical has opened two branches inside Wal-Marts in Epping, N.H., and Waterford, Conn.

And Lawrenceville, Ga.-headquartered National Vision Inc., which operates 400 eye care centers in Wal-Mart stores in the United States and Mexico, will open one or more HME test stores inside the world’s largest retailer in the second quarter.

All of these companies hope to capitalize on Wal-Mart’s astronomical foot traffic. Worldwide, more than 138 million customers walk into the mass merchandiser every week. Its U.S. operations currently include 1,478 discount stores, 1,471 Wal-Mart Supercenters, 538 Sam’s club stores and 64 Wal-Mart Neighborhood Markets.

Hutchinson Medical was the first provider to set up shop in the retail powerhouse last October, making a commitment and completing preparations to open a test store in fewer than six months. A 30-plus-employee company, the HME has been in the same family for three generations and runs two branches outside Wal-Mart — its main location in Salem, and a Concord, N.H., branch specializing in sleep products.

The company’s Wal-Mart locations are exclusively retail-sales-driven with product lines including prosthetics, bath safety, power mobility, lift chairs and compression therapy.

President Tom McAuliffe said Hutchinson “recognized the built-in marketability that Wal-Mart affords. A lot of the decision on where to put your retail location is a non-issue, in that [Wal-Mart has] already done its homework and determined all the logistics.”

He added that the cash-sales climate in the giant stores has been “kind of refreshing …. People who come into a Wal-Mart are more likely to pay [cash] for a scooter, lift chair or ambulatory product.”

“We are satisfied with the growth of these two locations,” said Troy Burke, Hutchinson’s quality assurance manager, “and we’re anticipating opening another Wal-Mart location in the not-too-distant future.”

The Scooter Store began roll-out of its Wal-Mart locations last November, according to Dan Gibbens, vice president of strategic analysis. “So far,” he said, “we’re happy with the results.” He added that “Wal-Mart caters to the same kind of customer demographic: the older Medicare populations.”

The Scooter Store inside Wal-Mart operates like the company’s other stores, just in a smaller space — between 500 and 700 square feet, Gibbens said. Revenue comes from a mix of retail and third-party-payer sales. The mini-stores feature a range of mobility products, including scooters and power wheelchairs, along with “lower-priced products to cater to the consuming public that comes into Wal-Mart stores,” Gibbens explained. Additional items include aids to daily living (ADLs), lift products and bath safety products. The stores also offer delivery services.

One of the nation’s largest home care providers with 425 branches, Apria will stock its new Wal-Mart location with cash-and-carry DME. The merchandise mix features a Pride Mobility lift chair and scooter, an Invacare walker and bath transfer bench and a variety of ADLs. The store will not accept third-party-payer transactions.

“We are excited about the opportunity to explore the retail HME setting since it is projected to be one of the fastest-growing [industry] segments in the coming years,” said Lisa Getson, Apria’s executive vice president, business development/clinical services. The 504-square-foot store has “excellent visibility to [an estimated] 7,000 Wal-Mart visitors every day,” she noted.

Apria’s Wal-Mart branch does not offer delivery services, Getson said, but pointed out that “additional products and services [are] available through the three Dallas-area existing Apria locations.”

In its first Wal-Mart location, National Vision will offer a mix of retail and insurance-covered items. The fifth-largest optical chain in the country with $250 million in revenue and 2,600 employees, the company “got interested in home medical [equipment] because we were looking for another growth vehicle inside Wal-Mart,” according to President and CEO Reade Fahs. The eye care chain serves two million customers each year.

While many items sold at Wal-Mart are self-service, Fahs explained, “optics is a consultative sale, where somebody has to hold your hand through the entire process. A DME sale is the same.”

Fahs sees additional similarities as well. “We have developed expertise in managed care because that’s a large part of the optical business,” he said. The store will be staffed with employees from within the industry “well-trained to take care of customer needs,” he continued, adding that he considers HME “a natural growth choice” for the eye care chain.

Some Wal-Mart stores already carry a limited assortment of HME products on shelves in the pharmacy area. But one Atlanta-area store recently discontinued its medical products section because of low sales volume. “We were only selling one [bath transfer bench] every few months. That’s just not enough,” said a store official.

Whether Wal-Mart’s customers will warm up to buying merchandise such as a scooter or wheelchair at the same place they shop for underwear and fishing tackle is the question, according to some industry-watchers. Though awareness of home medical equipment is increasing, many consumers simply don’t know that such products exist unless they or a loved one has required the equipment. Some also question whether placing the products in a well-defined area in the store will make a difference, and whether customers will shell out their money for the medical products, many with higher price tags than the store’s other goods. Commented one observer, “That’s why we test.”

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