As many suppliers of home medical equipment (HME) are already aware, making a living on Medicare reimbursements is difficult and becoming increasingly more so every year. As a result, many suppliers are turning to retail sales to expand their businesses. While this can be a dramatic change for some, the market potential is strong because of increased demand from aging baby boomers, some of whom can afford to buy the products they want and may not depend on Medicare at all. As a result, retail sales of HME are likely to grow, and smart suppliers are getting prepared to profit from this potential opportunity, which will also decrease their dependence on Medicare reimbursements.
Indulging Boomers’ Self-Expression
By 2017, it is estimated that 50 percent of the population of the United States will be over the age of 50 and will hold 70 percent of the disposable income. Unlike their parents, who probably live on a limited or fixed income and depend on Medicare to pay for HME products, boomers do not have to wait for Medicare eligibility or jump through all the hoops to ensure Medicare payment. Instead, baby boomers may opt to take a direct route to retail.
However, even if they are old enough to qualify for Medicare, many baby boomers (who still consider themselves relatively young) prefer to satisfy their personal preferences through customization. As part of the “me generation,” boomers like individuality and will not be satisfied with one-size-fits-all options.
Therefore, you may want to expand your inventory to include some creative options. For example, rather than supplying canes, walkers, scooters, etc. in a standard, single bland color, consider offering a few in bold prints and fashionable hues that will appeal to those customers who seek a little pizzazz in their self-expression. To truly appeal to all who enter your HME business, it is a good idea to have a few exciting options on hand, but you may have to rearrange your showroom space to accommodate some flashy new items.
Expanding Online Presence
Adding inventory items in a range of prints and colors—along with expanding your showroom, would be a significant investment—and the uncertainty of what would appeal to your clients increases the risk. Because many boomers have embraced technology (the 65 million boomers and even older consumers who use the Internet make up about one-third of all Internet users), supplying a broader range of inventory via a website is a cost-effective option.
If customers enter your business seeking something beyond what you have on hand, you can show them your online selection. They may opt to order while in your store, or they may opt to browse your online inventory at another time.
Your website could also attract shoppers who may never enter your physical location. According to a 2013 eMarketer report, nine out of 10 boomers have purchased items online. Because boomers are comfortable making online purchases, it is even more important that you have an online inventory for consumers to view and purchase from immediately.
To truly capitalize on the potential of a retail website, you must ensure that yours is optimized for mobile devices and is capable of processing credit cards. This could mean that you have to invest in updating your online space, but the investment should be reasonable.
Pointers for Getting Started
While there are always new point-of-sale (POS) options being developed, such as mobile card readers and scanners, touch screen monitors, display screens, chip card readers, etc., you don’t need to spend a lot of money to get started. In most cases, you should be able to utilize hardware you already have to perform basic sales functions.
However, as a new venture, your retail sales may get off to a slow start, so some marketing might be necessary to get the retail ball rolling. Social media is an obvious and affordable option, especially if your HME business already has established accounts. Window displays and store signage can also make an impact if you are in a high-traffic area.
To move beyond the basic sales functions, you may want to invest in some sort of point-of-sale software system, so you can easily capture and analyze your data to monitor progress. A fully equipped POS software application will enable you to easily monitor your retails sales and compare them with sales from your other operations as well as track the items people are buying most. This is valuable insight because once you begin to get a feel for your clients’ preferences, you can refine your inventory and focus on those items that sell best in your area. POS software will also help you track the performance of your sales clerks and monitor daily cash discrepancies, so you can easily visualize areas for improvement.
You will soon find that retail shoppers will be pleased to have some choice in their medical equipment purchases, and one sale of a leopard-print cane can quickly lead to another. With expanded inventory, an increased web presence and strategic monitoring of your retail sales, you can improve your profits and reduce your reliance on Medicare.