Try not to stock hundreds of lines that only service a handful of customers, but offer to order those products in for them

Clever merchandising is not only about improving retail sales, it sends out the right message about your whole business. Emma Charlesworth, Numark’s communications manager, explains

Is your retail environment neglected? What value do you place on ensuring your OTC offering is relevant, appropriate and fitting for pharmacy?

It’s actually a tricky balance. It’s no secret that the split between prescription business and OTC has widened drastically. The average ratio of prescription to OTC business in an independent pharmacy ranges from 80:20 to 90:10 – a substantial shift from around 70:30 just 10 years ago.

This presents us with a dilemma. After all, it’s commercially difficult to justify investing a disproportionate amount of time in your retail business when it accounts for such a small percentage of your turnover. The impact of merchandising and creating that all-important first impression nevertheless will have an overall impact on your overall business, not only increasing your OTC sales but also encouraging customers to approach you for additional services.

Merchandising and range

Merchandising is a fundamental requirement of any retail environment; to display products in such a way that generates customer interest and ultimately delivers increased sales. The psychology of how consumers think, feel, reason and select between different brands and products drive many of the merchandising basics. Customers’ motivation and decision making processes differ from product to product and merchandising strategies are designed to tap into the mind of consumers and deliver sales as well as creating a comfortable shopping environment.

Many pharmacies can very quickly become overstocked. Not only does overstocking create an untidy image, it can also make it difficult for the customer to locate and browse appropriate products and category groupings.

Did you know that 80 per cent of sales come from just 20 per cent of your range?

Start by removing slow-selling lines from the fixture and creating a ‘reduced to clear’ area somewhere in the pharmacy – ideally by the till as customers may gather here waiting for a prescription. Be ruthless; try not to stock hundreds of lines that only service a handful of customers, but offer to order those products in for them.

Category positioning

Ensuring your categories have a logical flow is important. For example, display babycare near the door and adjacent to skincare, haircare, feminine hygiene, etc. Position key subcategories prominently within their core category. For example, within bath care bath foams will tend to be the key subcategory, while within vitamins it would be cod liver oil, and within P medicines it would be oral analgesics, etc.

Ensuring your subcategories are positioned logically in relation to each other (known as category adjacencies) can also help with the flow of your pharmacy. For example, merchandise cough, cold and decongestants next or near to each other.

Well-positioned categories will help your customers navigate your pharmacy and encourage link purchasing and incremental spend.

Beacon branding uses the best-selling, most recognised brands to assist customers in identifying product subcategories. Most shoppers spend around 30 seconds browsing the fixture and won’t spend time reading packs to recognise and select products. Instead, they look for easy to recall visual triggers to help them shop.

Subliminally, customers use the colours and shapes of brand leaders to help navigate their way to the subcategory they want to buy from. These brand leaders may not always be their purchase intention but they are used as a beacon.

Brand blocking and traffic flow

Brand blocking is a technique designed to increase the prevalence of those triggers or beacon brands. As previously mentioned, it is no longer necessary for pharmacies to stock a huge numbers of lines; in fact all this achieves is confusion. It is much better to double and treble face top selling products than offer lots of equivalents which have a lower rate of sale and do nothing to add value to the category.

Effective merchandising is based on the way typical customers shop a fixture. Traffic flow simply means the way customer moves through the store to browse products and categories.

Customers generally shop from left to right; browsing a fixture is much the same as reading a book. Applying this logic, it makes sense to position beacon brands on the left at eye level. And ensure that larger pack sizes are on the left hand side as this encourages the customer to trade up.

The following basic customer decision-making process may help you apply some of the basic merchandising techniques to your business:

• Assume consumers shop left to right
• Beacon brands signal the start of a new category
• ‘Eye level is buy level’ – high rate of sale products at this level • Merchandise by ailment (ie, chesty, tickly, dry cough)
• Merchandise by size (largest to left encourages trade up)
• Merchandise by format (tablet, caps, soluble).

Merchandising is important to pharmacy in this increasingly competitive market. Your retail space should be working hard for you by generating sales and communicating the right message.

Numark provides its members with a series of comprehensive support tools aptly named ‘Retail Therapy’. These are developed to help independent pharmacists get to grips with the retail side of their business, and provide you with advice and guidance to help you maximise sales and profitability.