How independents can leverage value across the front-end

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How independents can leverage value across the front-end

By Michael Johnsen - 06/28/2018
There are many programs available at Cardinal Health RBC 2018 that can be implemented to maintain the profitability and productivity in the pharmacy. However, the largest margins and greatest profit-per-square-inch metrics are generated not behind the bench, but across the front end. It’s a key area that independent operators today can ill afford to miss.

[caption id="attachment_589859" align="alignright" width="150"]Sam Hoye Sam Hoye, director of marketing for consumer health at Cardinal Health[/caption]

Consumers are making as many as 42 trips per year in pursuit of health and beauty items. Why not purchase those items from their local pharmacist? “Front-end items have strong profit margins [ranging] between 30% and 50%,” Samantha Hoye, director of marketing for consumer health at Cardinal Health, said. “These [additional] trips can help independents drive [business] because that increased traffic gives them the chance to ensure they are taking care of all the script needs of the shopper.”

Capturing that front-end business does not necessarily require going toe-to-toe on price with the big-box stores across town, although overall value plays a significant role. Customers are loyal to retailers that provide added value to their shopping trip, Hoye noted, and independents can do this in two ways. “First, be promotionally relevant. Giving shoppers great deals along with great customer service gives them the reason to want to come back. Promotional prices also help drive a positive price impression and sales with the shopper,” she said. “This all helps the retail independent stay top-of-mind when a shopper has a need for health and beauty products.”

Cardinal Health has been working on a number of solutions to help retail pharmacy independents win in the front-end market. For example, Cardinal Health has been garnering manufacturer support behind strong promotional deals to the shopper, while keeping the independent whole on the margin generated from these products. “We have introduced a number of solutions to support promotional price reductions in the store and will have several new programs at the show that are a ‘must see,’” Hoye said.

Independents also can boost their value perception among consumers through Cardinal Health’s private-label offerings. “Having a strong private-label offering is key to driving profitability in stores,” Hoye said. “We are launching a ‘Buy More, Save More’ solution [at Cardinal Health RBC 2018] that can help independents increase sales up to 80%.”

While price points on health, beauty and wellness solutions certainly influence a customer’s overall perception of value, it isn’t the only metric consumers use in their evaluation. Independent pharmacy operators are in a great position to leverage their personal relationships with their patients through cross-selling opportunities tied to the prescription, Hoye suggested.

For example, many cholesterol-lowering drugs may cause depletions in iron. Therefore, recommending an iron supplement may not only increase the value of the overall market-basket, but it’s also an opportunity to improve patient care. “This is care beyond the bench,” Hoye said.

In addition to addressing the consumer’s value perception across front-end products through promotions and private label, Cardinal Health is also promoting its line of durable medical equipment products, including bath safety and mobility assistance, at Cardinal Health RBC 2018.

“With 10,000 people turning 65 years old daily, the need for durable medical equipment is growing rapidly,” Hoye said. “We have introduced our Durable Medical Equipment guarantee to ensure these items are available for pharmacists to fulfill the increasing need of their patients.”

If you’re attending RBC 2018, you can visit the Consumer Health booth to learn more about enhancing the front-end of your pharmacy.