Reinventing Retail

The problem with the home medical equipment business, muses BJ Bowser, is that “we basically sell a product that no one really wants but they have to have.”

Which begs the question, how do you best sell a product that no one wants? Bowser, director of Elkins, W.Va.-based Davis HomePlus, believes her team has found the answer: Buy the best products out there and showcase them in an attractive, user-friendly retail setting that invites people to try the equipment and get a sense of how it can improve their lives.

“Everything we sell in the store you can try out before you buy it,” Bowser says. “You can see how it works and, best of all, you can see how it helps you.”

Very often, “need” turns into “want,” according to Bowser. It’s a formula that has worked well for Davis HomePlus, a 27-year-old, Joint Commission-accredited respiratory company that only got into retail two-and-a-half years ago when it became a full-service HME company.

To say that the company is flourishing might be an understatement. In less than three years, the HME has nearly doubled its staff, from 12 to 23. It has six respiratory therapists and nearly 800 oxygen patients. It has two locations, one of which was relocated in December to a facility that is four times larger than its former site. A third location is being sought as well.

Handwriting on the Wall

Bowser is no neophyte, however. She is well aware that this month, her company, like every other HME business that bills Medicare, will see a significant decline in its bottom line thanks to the 9.5 percent reimbursement cut and implementation of the 36-month cap on oxygen rentals.

“We’ll be losing $45,000 a month,” she states bluntly.

Retail, she believes, will help make up for that. “People are willing to pay for what lends a better quality of life,” she says.

The company saw it coming several years ago. Competitive bidding loomed in the HME industry’s future; the Centers for Medicare and Medicaid Services had respiratory products and services in its gun sights. Medicare reimbursement would be dropping precipitously. “It was a no-brainer to go into retail,” Bowser says.

At least, it was that way for Davis HomePlus. The business is located in a somewhat rural area in the center of West Virginia (“I know people think all of West Virginia is rural, but we have a number of big cities,” Bowser says) and services 12 counties. The company, which had always been dedicated to oxygen, was getting calls from hospitals and referral sources seeking other home medical equipment.

“We were referring them to other HME companies,” Bowser recalls.

Reading the handwriting on the wall, the company decided to become a full-line HME company — and to do retail.

“A lot of companies don’t want to do retail, but we wanted to establish a relationship with our customers the first chance we got. And for those that are buying heel cups or insoles or whatever — that might be the first time,” Bowser says. “They’re going to come back to us for the wheelchair, the oxygen, the hospital bed.”

She recognizes that retail isn’t for everyone. “I think each individual company has to look at their demographics and the population they serve. It’s not right for everybody, but for those who do it and do it right, it’s going to pay off,” Bowser says. “It’s a big reward. Retail pays your rent or for a loan; it pays for your employees and their benefits.”

As customers embraced the new retail store and one product led them to another, Davis HomePlus outgrew its facility.

In December, it relocated to a 12,000-sq. ft. site — quadruple its previous 3,000. About 3,500 square feet in the new location is dedicated to retail, Bowser says.

She’s excited that this is no ordinary retail store. While many HME retailers have areas set up like bathrooms or bedrooms, Davis HomePlus has created an entire house in its new arena, one with all the HME trimmings. The idea came from planning meetings that involved the entire staff, the architect and the contractor.

“It was a collaborative effort, with everybody saying, ‘This is what our customers are asking for; these are our biggest problems; here are our strengths and weaknesses and here are our needs,’” says Bowser. “We brainstormed: What are we hearing, what can we do and what is going to serve our customers best? We went back to the drawing board many times.”

The home idea, however, she says, “seemed a natural fit for us. We are home equipment providers, and we want [the customers] to feel at home.”

So customers walk into the house-in-a-store and the rooms flow just as they do in a real home. There’s the bedroom, the kitchen, the bathroom, the living room, even cabinets and closets. Each area is outfitted with every conceivable HME product pertinent to that room.

For example, explains Bowser, customers often tell company employees that they don’t read the newspaper anymore because the print is too small. “So we thought, why not have a kitchen table in the kitchen with the current day’s newspaper on it and magnifying glasses in different strengths?”

Customers can sit down at the table and test out the magnifying glasses. They can roll up to the table and see if their wheelchair fits, and they can try out the eating utensils. There are cups in the kitchen cabinets (the coffee pot is always on), and folks can see if they can reach the cups or need a reacher.

Since one of the biggest questions is whether a wheelchair or scooter will go through a doorway at home, the new location features a “yardstick” doorway. Similar to a pocket door, the door can be adjusted to the width of the customer’s door so he or she will see if the equipment can pass through easily.

“They see what’s available to help them,” Bowser says. “If there is difficulty in the bathroom, they’re going to see what’s available. If there’s difficulty in the kitchen, they are going to see what’s available. If there is difficulty in their vehicle, they are going to see what’s available.”

A special feature of the new site is an enhanced women’s boutique, Bowser says.

“Women’s health care is really big and in the area we’re in, our patients have to travel so far [to get products],” says Bowser. So Davis HomePlus put together a wide variety of products and set up the department like a high-end spa.

Bowser says women are invited to come into the store even before their mastectomies to meet with one of the two registered nurses on staff.

“We’re with them every step of the way,” Bowser says. “For any woman going through that, she has to know that there is someone that’s going to walk her through the steps, someone she can rely on.”

In the private room that houses the women’s boutique, customers can try on wigs and even style them, check out numerous products, sample various lotions specifically for women going through radiation therapy and browse through books.

It’s a continuation of the Davis HomePlus philosophy that permeates its stores: Let the customers try products and equipment before they buy it.

That philosophy is no more evident than in the new store.

“It is very hands on,” Bowser says, noting that DVD players with signs reading, “Play me” are located throughout the store so, for example, customers can see how a bathroom modification might work.

In what Bowser calls a “Best Buy mentality,” fact sheets on various products are readily available. And there’s no more paging through catalogs of products; customers can simply touch a computer screen and see all the products the provider carries. They can order right there and have the item drop-shipped to their home.

Returns on Retail

All of this has built up enthusiasm for the products, and it has had an ancillary benefit, as well.

“The best way to solve the return problem is to let the customer try it out [before they buy],” Bowser says. “The chances of their keeping it to enhance their quality of life is so much greater.”

While many HME companies complain about the huge number of product returns, Bowser says her rate is negligible. “We have such minimal returns because the patients get to try it to see if it is going to work and they know in the store if this is what they need or not.”

Perhaps the biggest benefit of Davis HomePlus’ retail enterprise, though, is that it positions the company to meet the challenges that lie ahead.

“You have to be so on top of things — you always have to be looking ahead,” Bowser says. “And with everything going on in our industry, there’s always a big challenge out there for HME providers.”

As tough as the environment currently is, Bowser says now is not the time to slack off. “You can’t just be adequate anymore or you’re not going to be here,” she says earnestly. “You have to be superior in everything you’re providing.”

Routinely, she says, providers need to take a look behind the scenes at the part of the business customers don’t see. “We have to tear everything apart and make sure everything is working so we can ensure that the show can go on,” she says, noting that employee training must be up to date, billing must be continuously monitored and staff must be top notch.

“Our people are our major strength,” she says. “You cannot do this right without the right people. You’ve got to take a critical look at yourself as a company and you have to ask if you have the right people. The wrong people are going to sink you.”

Having the right people aboard who are enthusiastic about your company’s mission will propel the business forward, she says.

Bowser is also keen on networking. “We’ve got a lot of really good companies out there that are not afraid to network, not afraid to share their ideas,” she says. “I think that’s one of our greatest strengths.”

“It’s a different industry than what it was 10 years ago, five years ago — how about three years ago? It’s completely changed,” Bowser says. “If you’re doing things the same way you did, you’re not going to be around. It doesn’t work anymore.”

5 Things to Remember

BJ Bowser, director of Davis HomePlus in Elkins, W.Va., says her company has adopted a strategic plan that highlights diversity and meeting patient needs. For Davis HomePlus, that has meant embracing retail. In helping to build the company’s retail structure, Bowser has learned some important things, which she shares here:

1. Don’t be afraid of change You have to change with the times.
2. Learn from your mistakes Making the same mistake over and over is costly, not only in time and money but perhaps in customers.
3. Don’t let anyone tell you it can’t be done. “So often, I have heard that retail is not a money-maker,” Bowser says. “If you think there is something your business is lacking, be passionate and go for it.”
4. Listen to your customers and listen to your employees. “If you want to know what’s going on in your business you need to listen,” Bowser says. “A lot of times, we get buried in the paperwork, the industry news, and we quit listening.” Such a disconnect, she warns, can be lethal to your business.
5. Be proactive rather than reactive “We try to anticipate the future. Then we can be ahead of the curve,” Bowser says. “If you’re going to be here five years from now, 10 years from now, you’ve got to be thinking about five years from now, 10 years from now. The smart companies went ahead and planned for the worst but hoped for the best. The best didn’t happen, but the people who planned are going to be OK.”