Merchandising, as a practice that promotes the sale of products, is ubiquitous in retail. Modern retail outlets are not sustainable without carefully thought-out product placement, creative packaging design, and other ways to encourage consumers to buy more.
Pharmaceutical retail is no exception and also needs merchandising, but, of course, taking into account the specifics of pharmaceutical sales. As a reminder, pharmacies sell prescription pharmaceuticals that cannot be promoted like other products. However, keep in mind that a significant part of the assortment of pharmacies consists of non-prescription drugs, as well as vitamins and supplements, hygiene and cosmetics, and other related health and beauty products.
Therefore, improving merchandising in pharmacies is important, although it has its own peculiarities. We will talk about this further, suggesting a number of practical tips that will help pharmaceutical retail.
Merchandising of medicines and related products: how it works
The psychology of potential customers and limited sales floor space compared to stores of everyday goods are the main factors that should be taken into account when developing sales promotion measures in pharmacies.
Therefore, it is no coincidence that pharmacy merchandising focuses on the promotion of over-the-counter drugs, common medical devices, and other related products. After all, these goods are most readily available to buyers on the sales floor rather than behind the counter.
So, the lack of space and the peculiarities of the psychology of pharmacy visitors, namely, their characteristic sense of awkwardness, play a major role in placing various categories of goods in retail outlets. Traditional goods display techniques also do not remain unclaimed. We are talking about placing goods with certain characteristics at different levels, following the rules of visual perception, etc.
Let's look at all this in more detail, highlighting the problems and giving advice on solving them:
- Separate medications into groups. Let's begin with psychology. As a rule, people are quite shy about their own health and are hesitant to show interest in certain topics by discussing them with a pharmacist in the presence of other customers. Therefore, many visitors to pharmacies prefer to choose a drug, focusing only on the information presented in the display window. If a person gets confused by the variety of medicines on display or does not understand some terms on the plates and price tags, they can simply leave without asking the pharmacist the necessary questions. This is how misunderstandings arise that lead to visitor dissatisfaction and lost sales.
To address this, all offered medicines and related products must be divided into disease groups (so-called treatment groups). This approach helps buyers see what they need and make a choice.
When placing treatment groups, one should encourage the purchase of related goods that the buyer might also need to address their specific health issues. For example, it would be convenient to see a rack with thermometers, saturators, etc., next to the case featuring cold and flu medicines.
- Structure large product groups. The group of goods you have selected, according to the previous recommendation, may turn out to be quite large. Then it is advisable to further divide it into planogram blocks for displaying goods. Make it easy for your customers to navigate specific categories. These can be, for example, areas of goods for pregnant women, nursing mothers, and newborns; products for disease prevention and maintaining a healthy lifestyle, including dietary supplements and vitamins. Do not forget to compactly place orthopedic products and medical equipment. Consumers of phytomedicines and homeopathic products should also find the products they need easily.
- Follow the principle of omnichannel in practice. Even at a point of sale, the buyer can interact with the retailer not only at the counter but also via the internet. In many countries, it is important to allocate places on the sales floor where a customer can obtain a recipe or create an online order using the “Click and Collect” method. In the UK, for example, the “Click and Collect” buying model is actively gaining popularity, and according to Global Data forecasts, by the end of 2022, 13.9% of pharmacy purchases will be made in this way.
- Spare no effort to stimulate sales of related products. Frankly speaking, visual merchandising is not needed to sell prescription drugs. But it will help those shoppers who came for prescription drugs remember the other products they need. Impulsive shopping is also possible in pharmacies. You just need to grab the attention of visitors. For example, lay out impulse demand items around the “Click and Collect” points, which are usually located in the far corner of the sales floor. The checkout counters are also positioned in the same way, encouraging customers to browse as many items as possible as they pass through the sales floor. Cross-merchandising is a long-proven sales technique.
Always offer something else to the buyer, even if they’re headed straight toward the exit. Yes, we are reminding you about checkout racks, which should contain popular common medical products, and also taking into account seasonality and/or popular goods. Speaking of seasonality…
- Observe the seasonality of the range and display of goods. Just keep an eye on the calendar and the weather forecasts. In the warm season, you should display sunscreens, allergy and insect bite products within easy reach. In the cold season, feature cold medications.
- Follow trends. For example, over the past few years, some drugstore retailers have changed their approach to point-of-sale formats, moving from sterile or traditional to more "boutique" options.
- Facilitate the buyer's movement and orientation in the outlet. When visiting a pharmacy, the last thing a person wants is to enter a labyrinth. The entire sales area should be clearly visible, so it’s important to use low racks. A cluttered pharmacy with chaotically arranged shelves and display cases can be difficult to navigate. The visitor may perceive this environment as unfriendly and try to leave it as soon as possible. It should be easy for the customer to enter the pharmacy, find where they need to go, and pick up the item they are looking for.
At the same time, remember that with the abundance of related products, the trigger for purchases for buyers will always be medicines. Therefore, make sure that the counters and display cases with medicines of your outlet are visible, not only in the sales aisles but even from the street.
Sales promotion through customer research
Important tip: Always consistently study your customers, their age, and social affiliations. Also consider the location of the outlet.The age, race, gender, and income level of consumers are important characteristics to keep in mind.
Meeting the needs of the predominant ethnic or age group in the area where the pharmacy is located is useful in attracting these potential customers. For example, older people are more likely to prefer a pharmacy that stocks a wide range of durable medical equipment. On the other hand, it makes no sense to concentrate many different childcare products in a retail outlet if young families are not the main customers.
- No small thing: Pay attention to every detail. There are simply no small things in retail in general and in merchandising in particular. For example, did you know that the main customer in drugstores is a woman with an average height of 153 cm (about 5’2), or that visitors scan the shelves the same way they read, that is, in most countries – from left to right? You should not ignore such information when forming planograms, as well as choosing retail racks and fixtures.
- Realize that you can interest the buyer in the here and now. There will most likely be no lag time or second chances. Today's shoppers have a short attention span. They don’t want to spend more than five minutes at the pharmacy. So if they can't find what they're looking for quickly, they immediately give up and go elsewhere.
In fact, when entering a pharmacy, buyers do not always consider the products presented. More often, they simply move quickly to the prescription department while searching their smartphone for the information they need. Offer your visitors a different scenario. For instance, say hello to them at the entrance to attract their attention.
Most pharmacies have a counter at the entrance, which is supervised by a staff member. That's a really good idea. When visitors hear, “hello,” they will pause for a moment to respond to the greeting and then look around the sales floor. And, after having heard a friendly greeting from your employee, visitors often decide to use this help to quickly make the right purchase. This will result in another successful sales action for your team.
- Create additional points of attraction. Install, for example, a modern colorful display near the most frequently used aisles. Set up some furniture to sit on and a small table with themed booklets and brochures. And, by the way…
- Use POS (point-of-sale) displays and materials. This still works. An island or stand with products featured in media or advertising is also often useful. Buyers are often interested in such goods, so they must be visually accessible to them. Also, vendors, aware of media advertising campaigns, often offer promotions for such products. Accordingly, a special compact layout of such goods is also important.
So we’ve recommended quite a few visual merchandising techniques for pharmacies. However, their successful application requires visualization and processing of a large amount of information. How can this be handled? More on this in the following tips.
Automation of merchandising in pharmacies
A lot of information accumulates when analyzing sales and consumer behavior. When arranging a retail space and placing goods, good visualization is needed, including retail equipment, which allows you to plan the replenishment of shelves. We recommend that you use a planogram. And, given the wide range of pharmacies and limited retail space, we recommend automating planogramming. Automation helps you follow one of our top tips: Always think about profit and customer loyalty!
Do you know how much profit you get from the products that you display in your store in the most prominent places? Is this really making you money? Or should there be something else in their place that you can earn more from?
For many years, pharmacies in lucrative locations displayed household items. It was assumed that that’s what customers wanted and that it would lead to more sales. But often this is not the case. Often the customer only wants napkins and doesn’t buy anything else.
Take some time and look at the sales of these items. Generate a Point of Sale report to see how well each SKU is doing and how much money you've actually made from it.
Be daring… try new things! Order the latest medical devices or skin care products! There's a good chance you'll make more profit from $1 greeting cards than you’ll make selling napkins on the shelf near the checkout.
Don't let your goods sit too long. Maintain the sales pace at an appropriate level. Be sure to analyze planograms and sales data. To do this, you have to process a lot of information quickly.
Consider automating merchandising using Leafio Shelf Efficiency to manage shelf space in pharmacies. Using this advanced retail planogram automation tool, you can^
- Create planograms from scratch by transferring them from spreadsheets or by doing auto-layout based on the parameters you are interested in (sales, turnover, ABC analysis, etc.).
- Analyze hot and cold zones in sales rooms with the macro spacing function. This helps you understand whether the flow of customers is directed correctly and where more attention should be paid to the layout.
- Carry out assortment rotation and replace one item with another in a few clicks in an automated system.
- Monitor the performance of the display on the sales floor by the staff of the outlets using the mobile application. Thanks to this, you will always be aware of whether the display of goods on the sales floor is currently accurate and whether the promotional products or your brand are correctly represented.
- Analyze planograms and specific SKUs presented on them. This way you will track the impact of changes to your product display on sales.
- Create a display of medicines according to their intended purpose without any extra effort. Leafio Shelf Efficiency can create named zones and automatically fill them with goods with the selected parameters (by purpose, container, brand, color, etc.).
- Attract the attention of buyers with your promo layout. For the group of goods being promoted, an algorithm-calculated layout is also very important, which will grab the attention of visitors.
- Meet seasonal demand. In addition to normal procedures, pharmacies also apply seasonal layouts. You can change the planogram in connection with the rotation of the assortment using an automated tool. Leafio Shelf Efficiency users note that they rotate the assortment 4 times faster than before the introduction of the system.
Thus, contemporary merchandising is a combination of traditional and new approaches using automated solutions. Let's mention the criteria for the accurate planning of the retail space in pharmacies.
We suggest using a kind of short checklist for placing medicines and related goods. Always ask yourself the following questions when displaying your products:
- Is product placement appropriate for the traffic flow?
- Do the displayed products attract the attention of buyers? Are there any obstacles that prevent buyers from reviewing products?
- Is there enough space for items on the shelf?
- Do all products have price tags and information labels?
- Are the most profitable items in your outlet clearly visible? How often do you analyze sales and inventory reports? There are no permanent sales leaders in the pharmacy trade. Is it possible that well-known products are taking up too much prime space in your sales area? Try new products over time, and review the lists of top-selling products, as well as non-liquid products.
So, we’ve acquainted you with the specifics of visual merchandising in pharmaceutical retail. Now, you will probably be more careful in compiling and analyzing planograms in your retail chain and specific outlets. You might also start to apply automated merchandising tools more actively, as Leafio Shelf Efficiency users already do. We hope that the advice we’ve given you on the placement and promotion of medicines and related products in pharmacies will help you increase the profitability of your business and create a positive customer experience.