Analyzing the HME industry’s struggles to embrace online retail
by Kamal J. Haddad
November 26, 2019

The home medical equipment (HME) industry hasn’t learned from the retail apocalypse.

Providers have neglected to learn from and duplicate those who have successfully adapted in a world that includes Amazon.

It is time for the HME industry to assess retail expectations and consider a road map of solutions.

Brick and mortar merchandising and online catalogs are part of a successful retail plan for home medical equipment providers, but a retail strategy that includes better planograms, open space and proper merchandising no longer works on its own.

While these are great methods to improve retail sales and provide a better customer experience, they do not address the realities of space limitations, restricted product selection and competition from online retailers who can survive on lower margins. Traditional retailers in all segments who are not evolving are slowly dying.

Analyzing the Setbacks

It is impossible to create a road map without first understanding where the industry is. Taking a moment of reflection will make the strategies outlined in this article more useful and easier to implement.

Dealers should not duplicate what failing big-box retailers do; following what an HME dealer with a single location does with some success may only be moderately successful for larger operations. Rather than doubling down on filling retail space with products that customers can get more conveniently and cheaply online, take a look at the bigger picture of how consumers shop and how their online and offline experiences are connected.

Many HME dealers have catalogs on their websites to showcase products to patients. Online catalogs can be frustrating, however, if there is no way for the customer to buy the product, either for delivery or pickup. Investing in browsable website catalogs to react to declining reimbursement was a good decision several years ago. But better tools for e-commerce management exist today.

Many dealers isolate the retail business from the reimbursement business and develop different processes and sales strategies, as if they are independent entities. A dealer may have a solid reimbursement game plan when it comes to establishing relationships with referral sources, but be unfamiliar with retail, online marketing and e-commerce. Building a website that assumes HME retail is the way to attract traffic so that customers will then visit the retail showroom in person doesn’t always work.

Establishing a Road Map

The reality is that Google AdWords, search engine optimization and social media marketing don’t drive retail sales. The competition for attracting online customers is fierce and expensive. The online advertising budget for even small online-only retailers makes it nearly impossible to get a decent return on your investment.

It is time to take a look at solutions that respond to the miscalculations HME providers make. Here is how the industry must leverage innovation to thrive in the online retail space:

1. Treat retail as a logical extension of your business.

It’s not a separate bucket or silo—it is intertwined with your reimbursement business. You own the relationship with the customer. They may come to you through a referral source, but if you do not provide cash products as well, they will get them elsewhere. Guide the customer toward making the right product choice, capitalize on the trust they have in you as the expert and offer better customer service.

2. Become an HME marketplace.

This means working with the right vendors and removing products available at low margins when compared to online pricing. Work with vendors committed to your retail success through online brand protection, distribution protection and minimized advertised price policy enforcement.

It is also important to keep abreast of new product innovations and trends, such as CBD products. If you don’t attend trade shows, then you should read industry publications and subscribe to free webinars offered by manufacturers and service providers to stay current.

Don’t be restricted to the confines of inventory in your store. Work with drop shippers who will deliver to the patient’s home. This keeps patients coming back to your store’s website for future purchases.

3. Provide customers with real e-commerce.

Your customers research, compare and buy online, so provide them with a place to research, compare and buy. If people can’t add something to a cart and check out on your website, you are losing out on the best advantage you have over other online retailers. Keep your e-commerce website current, with detailed product information. Integrate your platform with your drop ship vendors, and display products the customer is interested in that may not available in your physical location. By connecting your e-commerce store to an endless aisle of products available through suppliers who offer home delivery, you reduce the chance of a customer walking out of your store without purchasing something because you did not have it.

4. Empower employees with sales training.

Every employee who interacts with a customer is a salesperson. Your employees are likely already discussing cash sale items with patients, even if you don’t currently sell them. When you implement Step 3, then your e-commerce website becomes a powerful sales tool. Employees can guide the patient through the website to purchase the recommended cash sale items they would otherwise buy elsewhere. Employees
should have access to a computer or tablet that is always open to your e-commerce store.

You do not need to spend money on Google AdWords to attract new visitors to your website; instead, find ways to do more business with the customers you already have because there is a lower acquisition cost. HME dealers are in the patient’s home and have a competitive edge over unknown online retailers. That is the most profitable and productive use of your e-commerce store—providing great customer service.