Get Your Pharmacy’s Front End to Work Harder for You
- Profit margins. Front-end sales generate nearly 10% more profit than prescription sales. While the gross margin on prescriptions has fallen or been relatively steady in recent years, the margin on front-end products can range up to nearly 40%, and most pharmacists say business in the front of the store is growing or remaining steady.1
- First impressions. When customers enter the front of the store, they will make judgments about the health of your pharmacy business, quality of products and cleanliness. Empty spaces on the shelves, for example, will look like the pharmacy is struggling. (Check “Is Your Appearance Turning Customers Away?”)
- Foot traffic. A great front end will draw people into your pharmacy and encourage them to buy more. Instead of picking up prescriptions at the drive-through window, they may walk inside to pick up a gallon of milk, if you offer that. If you are the only place in town for people to buy gifts or specialty items or receive a service, then your pharmacy becomes a destination for more than people who need medications.
Example: How one pharmacy increased front-end sales by 60% in 3 months
With the front end generating less than 1% of total sales at Robalo Pharmacy, owner Nirav Patel said he paid little attention to that part of the store. When he revamped that section, however, front-end sales shot up 60% in just three months. Customers who previously bought little in front-end products now regularly spend $30 to $40 in a typical visit.
Located in Lake Park, Florida, Robalo Pharmacy serves a low-income area. Patel learned through experience that customers weren’t interested in the expensive creams, stationery, and gift items, such as plush toys, it previously stocked. When Patel and his partner, Amio Das, changed wholesalers, Patel decided to take advantage of the vast selection of dollar products available from their local McKesson distribution center.
The results surprised even the pharmacy owner. Customers don’t buy just one of the dollar perfumes. Patel said, “We sell a dozen at a time.” Another example is toilet bowl cleaner, which is so popular the pharmacy is selling two cases every week, a total of 48 items. These low-cost products not only fit customers’ budgets, but they also provide customers a low-risk way to try new items without spending a lot of money.
After seeing how valuable the front end can become with the right mix of products, Patel now plans to make changes in the front-end section at his other pharmacy, Chemists N Druggists in Stuart, Florida. That location serves both low- and higher-income customers, so they will need to find the proper mix of products.
Ask your wholesaler or buying group for ideas to improve your front end. (See also “9 Ways to Help Increase Front-End Sales.”)
No matter what your customer mix, keep these lessons in mind to help maximize the value in the front end of your pharmacy:
- Plan the layout. When customers enter Robalo Pharmacy, they see the durable medical equipment section to the right and vitamins on the left. The 30-foot dollar section is located around the waiting area. When customers face the exit, they see that month’s buy-one-get-one-free offering, which the pharmacy promotes in a flyer. Robalo also places dollar items on end caps, but pharmacies should experiment with offerings and designs on end caps to find the right product mix for their particular location.
- Change it often. The change alone piqued customers’ interest and drew them to these products. “Anytime there is a change, there is always curiosity,” Patel said. Because of this, he recommends making frequent changes. It is also important to advertise your new products and/or specials to give customers a reason to come back regularly.
- Schedule time to reset. Initially revamping Robalo Pharmacy’s front end took about eight days. A front-end expert from McKesson worked in the store for five days, and two pharmacy staff members spent three additional days completing the transformation. They finished the reset just before Robalo’s high-traffic period, the first two weeks of the month, when customers receive their Social Security and other payments. The time was well worth it, Patel said, and now it takes only about two hours a week to maintain the front end.
Consider designating a front-end manager with the training and expertise to maximize profits in that section of your pharmacy. (See “What You Can Learn from Small-Chain Pharmacies.”)
Share your tips for boosting front-end sales in the Comments section below.