The profit margins on many OTC medicines and other sundry goods are typically higher than the margins earned from prescriptions. Even if they were not as high, the profit yielded from the sale of these goods represents a needed diversification of revenue streams from that of the prescription department, only. In addition, patients might very well be attracted to and have their prescriptions filled at a particular pharmacy because they like the way it looks, enjoy shopping/browsing there, and believe it’s a one-stop, time-saving destination that mitigates the need for making 2-3 additional shopping stops when running errands. Moreover, a prescription patient acquired through the merchandising of other store goods can end up being someone for whom you provide MTM services and improve their health outcomes. So, more is riding on proper merchandising in your store than just having a nice-looking place to work.
Annabel and Scrymgeour review some tenets of effective merchandise ‘engagement’ to keep in mind as one considers store layout and what to stock the shelves with.1 The authors describe how many pharmacy brands are merging and that discounters continue to grow; and as such, those who have not made changes to keep pace will find themselves swimming upstream. They describe merchandising as affecting what the customer sees and experiences. They provide 8 key tips/strategies: (1) Freshness, ambience, and reassurance (current/modern signage, decluttering the first 3 meters in the store, or its “landing zone”, playing music at a soft volume); (2) Layout (clean, simple, long straight runs of gondolas, as short gondolas imply higher prices); (3) Range (use plan-o-grams, localize items since many customers completely change stores for the sake of just one item); (4) Price (every product needs a shelf ticket that is preferably black type on white paper); (5) Analysis (Conduct research/analysis to be absolutely sure of what your customers want and are buying); (6) Cross-merchandising and promotions (a promotion is designed to sell but might also be for the purpose of creating foot traffic or grow total store sales rather than sales of just one item); (7) Cleanliness (pharmacies should be “hospital clean, with proper determination of personnel responsibility for keeping in that way); and (8) Presentation (shelving, promotions and off-location displays must be well presented, and products should be faced, pulled forward, neat, straight, and orderly all the time).
Pharmacy managers should know how “fickle” customers can be, but also the importance of loyalty if you can create it. Sometimes that’s done in the prescription department, but it also is achieved among the non-prescription items. A bad impression about this part of the store can foster a bad impression about the prescription department, as well.
Additional information about Merchandising can be found in Pharmacy Management: Essentials for All Practice Settings, 5e. 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, 5e. If your institution does not provide access, ask your medical librarian about subscribing.
1Annabel B, Scrymgeour M. Rules of merchandise engagement. Austr J Pharm. 2017;98(1166):60-61.