Page 20 - HME Business, August/September 2018

minimums, maximums. A lot of that is built into most planograms, so again, the guesswork comes out of it. It becomes pretty straightforward. So they are an important tool, especially as our industry expands and continues
to explore deeper the cash retail side of the business. Planograms and presentation is something that is common in the general retail world, so it’s relatively new to the HME side of things, but it’s an important part of merchandising, especially on the cash retail side, for sure, for dealers.
HMEB: Can planograms help both retail and funded goods?
Scarsella: Absolutely. Obviously, many of the products that might be included in a planogram for bath safety, for example, or mobility, are prod- ucts that do have HIPAA codes that are part of a Medicare reimbursement program or are covered by insurance. It’s a way to present those products to the customer base and have the insurance coverage of the funding just be part of the end of the interaction. How are we going to get this paid for? Is it going to be cash, check, credit card, Medicare, Medicaid, insurance? Additionally, planograms can assist in the ever-increasing need for comple- mentary products, bundle selling, and add-on sales that help retailers compensate for lower reimbursement situations. So somebody could come in for a funded product and provided the product, and then the planogram on the cash retail side provides a quick and easy presentation of products that can be purchased directly with cash in addition to the funded item that allows for that consumer to leave with a better experience, better product, more independence, whatever the case may be, but also gives the dealer
a chance to easily bundle products together with the funded products and maximize that interaction from a financial standpoint with the consumer.
HMEB: What makes for an effective planogram? What are some compo- nents that can help a planogram help the provider do the selling? Scarsella: I think, in a lot of cases, the visual nature of a planogram is important. It needs to present well. It needs to make sense logically for the consumers, easy to understand, easy to find the products, easy to navi- gate from one side to the other and find exactly what they’re looking for.
It should take into account light products and complementary products.
It should include silent sales pieces and aisle interrupters and the right signage so that it is communicating effectively in line with the dealer’s busi- ness model. A lot of things go into it but the visual nature of our planogram is very important. The ease of replenishment is a significant part of it as well, not only from the ordering and buying side, but also from the physical stocking side of making sure that it’s up to date.
Baumhover: An effective planogram consists of a good product assort- ment within the category. In addition, it should include an attractive layout and retail packaging. Lastly, it should have relevant branding materials like sample store signage, displays for the customers to feel the product, and related marketing messaging.
HMEB: When do providers change their planogram? Do they wait for sales to taper or do they change them up on a seasonal basis to keep things interesting? Or is it even necessary?
Baumhover: Semi-regularly all stores should initiate a nice refresh to
help reenergize their customers around their store offerings. This refresh should include simple layout changes, conversion of product, bringing in new product, etc. Outside of these changes, to understand if a planogram needs updating, a provider will need to determine the successfulness of a planogram through sales reports, customer feedback and changes in the marketplace.
Scarsella: I think it really depends upon the products that you’re talking about at a particular dealer. There are going to be some products that don’t change very often. In those cases, it’s your mobility, your bath safety, some of the products that are going to be all year round. They’re not subject to seasonality. The needs that the consumer base has every single day as they walk in, and from there, the evaluation of the planogram, in
my opinion, is going to be purely driven by the performance of individual SKUs. Is it maximizing the dollars per square foot? The space that it’s taking up, should we look at maybe doing a four-foot instead of the eight-foot? It’s driven by performance. It’s driven by sales. In other cases, some of the
Planograms have come a long way from the very simple, two-dimensional line drawing diagrams of how providers should organize products on a shelf. Now there are very photorealistic, three-dimensional computer designs that give providers very clear ideas of how DME could look on a shelf.
products might be more seasonal. They might be more geared towards the holiday season. There are some things out there that we see spikes during Mother’s Day, Father’s Day, and certain holidays. Those planograms can
be either remerchandised around those times or adjusted down during the down times or simply moved to a different part of the store so they’re more featured.
HMEB: What’s the uptake among providers when it comes to planograms? Are providers seeing the benefit of planograms and integrating them into their merchandising?
Scarsella: I think they are. I think they are when the planogram itself and the program surrounding the planogram and the economics are right. I think the retailers, as we know, are already good at their business. Putting a planogram in just for the sake of a planogram doesn’t make any sense but they’re abso- lutely willing to accept the opportunity to make their life easier if the plano- gram itself meets the expectations and is presented in such a way that it will. Do I see HME retailers that are one planogram from one side to the other? No, but I also don’t think planograms are necessarily right for every product line and product group. But to answer your question, we’re seeing more and more of them where it makes sense, but really the dealers are wide open
to any assistance and any help. Planograms fit into that but it has to make sense. It has to be the right product. It has to be displayed the right way, and ultimately, the economics in terms of selling price and margin and inventory carrying costs.
HMEB: How do providers get started with planograms?
Scarsella: I think it really comes down to asking the question of their
vendor reps and their suppliers. Do you have any kind of pre-merchandise programs that would help me with this particular part of my store in terms of actual planograms or any groupings of products that aren’t necessarily planogrammed out completely, but the thought process has gone into it already. It’s just opening up the dialog. “Ask your vendors” is a common theme I talk to dealers all the time about. They’re the experts. Use them. Take advantage of the years of experience, the knowledge, the fact that they’ve got data from many, many other HME dealers across the country that all can be used to help your business. So if you’re trying to figure out how you can make your merchandising of your showroom a little bit easier, just ask the questions: What do you guys have that is prepackaged? Do you have any planograms? Do you have anything that can help with this space? How much do you need and let me take a look.
Baumhover: Customers are looking for a clean store that is easy to navi- gate and shop. Planograms can create just that. To effectively implement
a planogram, first choose the best planogram to fit your space. If needed, see if your vendor will help make the planogram attractive to your store. To best rollout a planogram, make sure to request that all resources for training your employees are available. Then after implementation, regularly check your reports to determine the successfulness of the planogram and related product offerings. n
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Source: Compass Health