Community pharmacies aim to, among other things, sell merchandise. Given the decline in profit margins for the prescription department, the success of a pharmacy’s “front end” is critical to the total financial success of the business. Many front-end products such as over-the-counter (OTC) drugs, vitamins and minerals, sundries, first aid supplies, and candy and seasonal items usually offer a higher profit margin. Merchandising provides the pharmacy with an opportunity to position goods so that the ones with higher profit margins are more visible and tempting to the consumer. This is done not only through product placement, but also how the product is presented, in which aisle it is placed, how close in proximity it is to the prescription department, and so on. Merchandising, though, also does a lot to connote a story to your patients; that is, what sort of business you are in. Too much “fluff” might connote one message to a patient, whereas carrying a more extensive array of strictly health-related goods says something about you being in the business of well-being rather than just creating convenience.
The pharmacy chain CVS made a big splash when it announced in 2014 that it would no longer sell tobacco products. The message to consumers/patients was that while these products are profitable, if CVS is to consider itself a destination for health and wellness, then carrying these products went against that mission. Lopez-Trigo attempted to discern the extent to which CVS was doing so as a sincere health gesture or more as a strategic marketing ploy.1 In a comprehensive discussion of this issue, the authors stated that while a company like CVS will make decisions that will in all likelihood be positive for their bottom line, that this was a huge step forward for community pharmacy, as CVS was aiming to seize opportunities available from the Affordable Care Act to become recognized and paid as bona fide providers of health care.
Pharmacy managers can concurrently improve the pharmacy’s earnings and send a positive message about the store being a destination for health and wellness with proper merchandising.
Additional information about Merchandising can be found in Pharmacy Management: Essentials for All Practice Settings, 4e. If you or your institution subscribes to AccessPharmacy, use or create your MyAccess Profile to sign-in to Pharmacy Management: Essentials for All Practice Settings, 4e. If your institution does not provide access, ask your medical librarian about subscribing.
1Lopez-Trigo P, Khanfar KM, Almeddine S, Harrington C. Banning tobacco sales at the retail pharmacy: Natural evolution of drug store as responsible or effective marketing strategy? Health Mark Q. 2015;32:382-393.