If you operate an independent pharmacy or retailer of home medical equipment, you may be wondering how you can scale your sales beyond Medicare and insurance reimbursements for your customers seeking immediate and long term care needs. You may not realize this, but you – the independent pharmacists and retailers across America – serve as the hub of the community, where people seek trusted advice from someone whose mission is to help them. You are trusted, you offer care, and you, in many cases, are a beacon of hope for people dealing with home recovery, mobility challenges or safety needs in and around the home. In some cases, people trust you more than their caregivers or healthcare providers, especially when it comes to home medical equipment (HME) and comfort products for everyday life. But the question is… Can HME really help drive independent pharmacy profit and revenue?
We’d like to introduce you to Alex Anderson, sixth-generation owner and operator of Oswald’s Pharmacy in Naperville, Illinois.
The History of Oswald’s Pharmacy
Oswald’s Pharmacy in Naperville, Illinois, stands as a testament to the enduring power of adaptation and forward-thinking pharmacy care. Oswald’s journey from a traditional pharmacy to a leading Home Medical Equipment (HME) retailer showcases the transformative power of strategic vision, partnership, and community focus.
The collaboration with NOVA Medical Products and the strategic use of their training and marketing have been pivotal in Oswald’s success, serving as a model for other independent pharmacies seeking to thrive in the HME market.
Since its inception in 1875, Oswald’s Pharmacy has endured numerous industry changes, maintaining a trajectory of growth and innovation. The pharmacy’s transition into HME retailing, driven by the foresight of its leadership under Alex Anderson’s father Bill Anderson, marked a significant turning point, enabling Oswald’s to address the limitations of traditional pharmacy revenue streams and capitalize on the burgeoning demand for HME products.
Step-By-Step: Empowering Human Ability
At NOVA, we believe in empowering human ability, and it’s very clear that Alex and his team believe in that same mindset to serve the community best. You also may be interested to know that Alex isn’t a pharmacist; he’s a retailer and marketer by trade, and he knew what needed to be done to connect with his audience.
Oswald’s Pharmacy adopted a holistic approach to marketing, utilizing digital platforms, social media, community events, and educational initiatives; the pharmacy built a robust brand presence.
Oswald’s journey into HME retailing was characterized by strategic planning and execution:
- Market Research: Understanding community needs and identifying high-demand HME products.
- Education and Training: Leveraging NOVA/HME180 resources to train staff on HME product knowledge and sales techniques.
- Marketing and Outreach: Implementing targeted marketing strategies to promote the new HME offerings, both in-store and online.
Through targeted Google Ads, engaging social media content, and participation in local events, Oswald’s effectively communicated its value proposition to a broad audience. Customer reviews and word-of-mouth played a crucial role in reinforcing Oswald’s reputation as a trusted community healthcare partner.
While the conventional wisdom would be to go solely after senior citizens, Alex realizes anyone can be in need of a mobility or comfort product. Alex shared his approach with NOVA CEO Sue Chen in February’s episode of The HME180 Podcast.
In fact, after the podcast interview, Alex was headed to the local Children’s Museum for their ‘Love Bugs Dance,’ a Valentine’s Day event for moms, dads and kids where they market their store. He says that DME (durable medical equipment) is not just for the retirement home – it’s important to market to younger members of the community, too. “We have pediatric wheelchairs. You know, kids get hurt sometimes, too. We have pediatric braces…There are other needs in that realm. So, getting involved in any events in your community… we really like to do that.”
Alex has seen his digital and interpersonal connections pay off. You could say, he’s offering a SuperNOVA experience.
Financial Growth Trajectory
A critical indicator of Oswald’s successful strategic pivot is its financial performance, particularly the HME revenue growth from 2012 to 2023. The data reveals a compelling story of growth, resilience, and strategic foresight. Fueled by this growth, they opened a new store in 2023.
- 2012: $103,197
- 2013: $123,432
- 2014: $183,806
- 2015: $326,322
- 2016: $786,357
- 2017: $1,183,205
- 2018: $1,483,722
- 2019: $1,866,768
- 2020: $1,492,089 (a dip reflecting the global challenges of the pandemic)
- 2021: $1,707,928
- 2022: $1,642,456
- 2023: $1,910,707
Despite a temporary setback in 2020, a dip reflecting the global challenges of the COVID-19 pandemic, this upward trajectory in revenues underscores Oswald’s strategic adaptability and the robust demand for HME products. The HME strategy also allowed for strong profit margins at retail prices offsetting the ever shrinking margins with reimbursement. Always industrious and ready, this small HME dip was offset by their immediate pivot to providing much needed COVID-19 supplies and vaccinations.
The strategic diversification into HME retailing fortified Oswald’s against the pressures faced by traditional pharmacies and also positioned it as a community cornerstone for healthcare solutions.
Home Medical Equipment: The Star Seller
Investing in HME, Oswald’s Pharmacy saw a major return on investment. Specifically, the pharmacy reported a 30% increase in overall sales, with HME products accounting for a significant portion of this growth. This uplift compensated for the slimming margins in prescription sales and contributed to overall business sustainability.
Introducing a dedicated showroom and a more comprehensive range of NOVA products led to increased foot traffic and higher average transaction values. Moreover, by providing products not commonly available in chain pharmacies, Oswald’s solidified its position as a community health hub, fostering customer loyalty and repeat business.
Alex discussed how Beanie Babies were popular products in the 90s, and the independents began to understand the value of selling more than prescriptions. The transformation began with his father.
“(Beanie Baby sales) was just such a great way to support small businesses. And as that grew and then eventually died out, no one was going to college off their Beanie Baby money as they once planned. We grew our gift and toy section, and around that same time, we hired a pharmacist who said, “Hey, Bill,” – that’s my father – “You should get a lift chair.” And at that time, we didn’t even know what a lift chair was. By the mid-90’s, we had one on our floor. But when we were in our old location in downtown Naperville, it was 5000 square feet. So we didn’t have a lot of room. And then when my dad was at a trade show, he saw another guy speaking on DME/HME and he said, “The more lift chairs you have, the more you’ll sell.”
So we moved out to our new location in 2004–so 20 years ago–we had a little more room, we doubled the size of the store…And then in the early 2000’s, we got connected with NOVA. And so when we started working with NOVA, we just expanded first, it was 4 ft, then 8 ft, then 12 ft, then 32 ft. Then we’re carrying hosiery, diabetic footwear, diabetic socks, ADL, and just grew dramatically.
And at that time, we still were 10,000 square feet. And then we were running out of room and there was a vacant 5000 square foot spot next to us, so we put a couple of holes in the wall and opened up a DME showroom. So from one chair to four chairs, now we’ve got about 45 on the floor.
So that’s kind of the centerpiece, but it’s surrounded by a sea of green of wonderful NOVA products along with a lot of compression hosiery, braces… we work with a lot of great vendors in the industry, and I like it a lot because it’s very hands on service, the way I think pharmacies used to be. It’s a lot of one on one in depth interactions where we really help people find exactly what they’re looking for or sometimes what they didn’t even know they were looking for.”
Boost Your Pharmacy’s Revenue with a NOVA Pharmacy ReNOVAtion
Oswald’s Pharmacy’s success story is a testament to the potential of HME retailing as a growth strategy for pharmacies. Pharmacy owners can replicate Oswald’s success by understanding the needs of their community, embracing change, and utilizing the resources available through partnerships like NOVA.
Offering a NOVA MVP experience means more than just selling products; it’s about creating an environment where the store staff is educated and empowered – and the customers feel supported in their health and mobility goals. As Alex said, pharmacies can stand out and empower human ability by offering personalized consultations, product demonstrations, and after-sale support, turning their HME offerings into a comprehensive service.
Starting small, focusing on high-demand items, and gradually expanding based on customer feedback and sales data can mitigate initial risks. Additionally, leveraging NOVA’s expertise in product selection, marketing support, and staff training can accelerate the transition.
Expanding your pharmacy’s offerings and impact begins with taking that first step toward HME retailing and ReNOVAte your Revenue. Contact us for more information and resources on enhancing HME retail operations.
