Author: Crystal Bryan, PharmD, Chief Clinical Officer (Cascadia Pharmacy Group)
‘Be Nimble’ was a common theme all week at the Cardinal Health RBC Conference in Chicago. You would hear that thought-provoking phrase at every turn, whether it was Tim Mitchell from Mitchell’s Drug Store at the opening session, Doug Hoey, NCPA’s CEO at the industry session and even from numerous technology partners on the tradeshow floor.
With that same passion, Jeff Harrell, CEO of Cascadia Pharmacy Group, presented a CE workshop, ‘Optimizing Front-End Sales.’ Jeff challenged pharmacy owners to think critically about their current offerings and consider fresh ideas to take their front-end businesses to the next level.
Many pharmacies are about 10% or less for front-end sales and include supplements, OTC’s and health needs. While the basics are a great place to start, there may be many more opportunities within easy grasp. Considering the current pharmacy landscape and the need for PBM reform, creating a more urgent need for additional revenue and cashflow, it’s a great time to get creative.
Jeff encouraged pharmacy owners to embrace ideas that have been working well for his team and also discussed a few tips for picking vendor partners and evaluating the success of each new offering.
Be Unique: Meet Your Community’s Vibe
Independent pharmacies across the nation are unique, and their front-end offerings play a large part in what differentiates each one and makes it special. Affiliates of Cascadia Pharmacy Group retain their uniqueness too and it’s fun to see how each one truly reflects the heart of their communities, much like many of Chicago’s contextualist skyscrapers (surrounding us at RBC) highlighted the beauty of their surroundings.
Each pharmacy carefully considers the needs and perspectives of their communities, whether it’s the historical soda shop at Grants Pass Pharmacy (southern OR), the ocean-themed gifts of the stores along the Pacific Coast (WA state), or the country-chic apparel and bags that can be found in our more rural stores, such as Goldendale Pharmacy (Goldendale, WA).
It’s important for each independent pharmacy owner to evaluate the opportunity gaps in their community, while also listening to their patients in order to anticipate their needs. Some communities need a place to buy local high school merchandise or gifts for every occasion. Others may need licensing services for hunting or fishing, a coffee shop, or access to quality supplements and education.
Beverly Schaefer, owner of Katterman’s Pharmacy (Sand Point, WA), shared a great example of listening to her customers. She started to sell little plastic sleeves for immunization card protectors at the start of the pandemic. At only $1 each, her patients were thrilled and it provided a great margin.
With a great team, fresh ideas and a willingness to pivot, each pharmacy can continue to stay fresh and appeal to their clientele.
Various Offerings & Vendors
Some of the categories that do really well for our group include coffee, candy, toys, cards, home décor and gifts. We have found significant success working with local artisans for everything from soaps and bath bombs to candles, cards, jewelry and more. Anything unique that can’t be bought from Amazon or big chain stores will keep everyone coming back, especially with great merchandising and rotating variety. Some of the things you least expect can have a big impact.
Allison Zimmerman from Purdy Cost Less (Gig Harbor, WA) shared about how well their warm nuts roaster has done for them. “Not only did it pay for itself in the first month, the warm nuts are a great thing to offer guests while they wait, they are a wonderful addition to gift baskets, and since every bag has our logo on it, it makes great marketing as well!”
Allison Zimmerman, Owner, Purdy Cost Less (Gig Harbor, WA)
“Not only did it pay for itself in the first month, the warm nuts are a great thing to offer guests while they wait, they are a wonderful addition to gift baskets, and since every bag has our logo on it, it makes for great marketing as well!”
The category that has done the best at one of our newer locations, Madison Park Pharmacy & Wellness Center (Seattle, WA) is naturopathy and complementary medicine. Although Madison Park Pharmacy is centrally located in an affluent neighborhood, this category is likely a wonderful opportunity for any community pharmacy to build on.
Patients want to support their bodies’ natural ability to perform optimally, and partnering with an herbalist or naturopath who listen to patients and provide education can help this area of your business grow. The herbalists and naturopath on staff are clerks and help support the entire team while also being able to offer that 1-on-1 help their patients have come to love.
Many vendor partners are also willing to provide education about their products so your team can feel more comfortable making appropriate recommendations. Your pharmacy may not be ready to hit $43,000/week in front-end sales, but you can set goals to lift front-end sales by even $500/week and continue to make incremental progress over time.
Selecting vendors can be tricky, but the resounding advice was to look locally and then to look further away! Look locally for smaller artists in your area that will create great partnerships and a community feel. Sometimes farmers markets can be a great spot to find these while other times you can find them online. Then look further away so you don’t bring in the same gifts someone down the street might be offering. Some suggestions were some of the bigger gift shows in Atlanta or Vegas.
No matter where you find your vendor, always consider the quality of the product, minimum order quantities, payment & shipping terms as well as product dating and customer service. There are a lot of really great vendors out there.
Merchandising, Marketing & Team Engagement
When it comes to sales, the products are important but so is everything else that contributes to the shopping experience. Jeff recommends putting yourself in the shoes of the customer and walking through the front door. What catches your eye vs. what is a distraction? What lighting could be better? Where is the premium real estate you want to optimize? Even stopping to consider exterior paint and signage can make a big difference.
Once you get past lighting and fixtures, the ideas are endless. Some of his stores get creative with vintage pieces from antique stores or yard sales that can serve as displays and even be sold for a high enough price! He also recommends creating gift baskets at three different price points to meet the needs of all your guests. These can be created for every occasion from holidays, to teacher appreciation, hostess gifts and graduation. Plus, they can be a nice way to slide in some slow-movers or hot items, and to move out some inventory.
As you create a great-looking store with amazing products, don’t forget to tell everyone about it. One of the easiest ways to do this is with social media. Regular posts and reels can be a powerful marketing technique and a great way to involve the younger people on your team.
As we know, it can easily feel like there is too much on the owner’s plate, but you can ‘do it all’ with the strength of a wonderful and diverse team behind you. Whether it’s someone on the team filling the pharmacy with the sweet aroma of freshly roasted nuts, trained professionals walking around to engage with customers and understand their health needs, or the person in charge of Instagram, everyone is working together. Be sure to celebrate your team as you build a culture that is fun, empowering, and attracts top talent!
Evaluating Success
One of Jeff’s favorite phrases is ‘Data doesn’t lie. People do.’ So it’s important to look at front-end sales as frequently as you look at everything else. We don’t want to make business decisions on what we think people love, because evaluating sales will help us better evaluate what they actually want to keep coming back for and what needs to marked down to clear shelf space.
Jeff Harrell, CEO Cascadia Pharmacy Group
“Data doesn’t lie. People do.”
Be sure to evaluate both margin and sell-thru. As sales start to soften on an item, get rid of it and be ready to pivot to something better. When you are setting your goals, aim to make incremental increases in specific categories, and you can even consider a bonus structure to help support that.
Final Thoughts
Independent pharmacists are fierce and nimble. We aren’t backing down to PBM’s and we are more forward-thinking and creative than ever. Be sure to walk through the front-door of your pharmacy and look at your pharmacy in a new light. Then get ready to embrace the new opportunities awaiting your front-end that your community will love. Especially when accompanied with service and a smile that is consistent with every independent pharmacy.