Incontinence products come 'out of the closet'

Sunday, March 31, 2002

Sales of incontinence products ­ like so many other segments of HME ­ are rising with the swelling tide of potential new users in the marketplace. An ever-aging population, combined with the de-stigmatized image of adult diapers has providers searching for ways to get a bigger share of the business.

How providers formulate sales strategies to attract customers depends on myriad factors, such as brand, demographics, product mix and marketing philosophy. Consultant Alison Cherney, president of Brentwood, Tenn.-based Cherney and Associates, says providers need to assess how they can best serve this growing demand.

"From a consumer standpoint, the market has come out of the closet," she said. "How providers respond depends on which products they emphasize. Diapers are low-tech and low-margin, but there are also more sophisticated products, such as apparel designed to strengthen abdominal muscles. They should investigate their options to find out what will work best for them."

With general retailers and chain pharmacies well positioned to capture the majority of the low-margin national brand diaper business, independent providers would do well to seek partnerships with medical distributors, advised Jack Evans, president of Malibu, Calif.-based Global Media Marketing.

"Distributors like Bergen, McKesson and Cardinal all offer private-label diapers that allow for double the margins of the name brands," Evans said. "Because these brands are sold only in healthcare stores, the customer has no choice but to come to you for that brand."

Northshore Medical Supply in Houston is a perfect example of how the private label strategy works. President Ray Normand says his incontinence business has skyrocketed since he started carrying the German-made Hartmann brand through Medline. Specifically, Hart-mann's large diaper ­ designed to absorb 2,200cc of liquid ­ has been an unprecedented success, Normand said.

"I stocked a case of them and people were waiting at the door the next morning," he said "They're popular because you only have to use one diaper instead of three. They're our number one seller ­ nothing else comes close to it."

Evans is also a big proponent of symbiotic selling ­ bundling together products related to a particular condition, such as incontinence and skin care items.

"By correlating products together, sophisticated dealers are meeting their customers' needs as well as boosting their sales potential," he said. "Topical lotion can be marketed as a companion product to diapers, which also serves as a lead-in for sales of multiple skin care products. If you can effectively explain how a pH balanced lotion keeps the skin from drying and how barrier cream helps prevent further irritation, you will double your sales."

Carmen Davies, manager of Broadview, Ill.-based DependiCare, agrees that one-stop shopping is the lifeblood of an HME company's retail business.

"The independent simply can't compete against the Wal-Marts of the world," she said. "We have to carry unique brands and the kinds of products that are priced to give us margin. We also merchandise the items so that customers have to walk by them while in they're in the store. What we've found is that when customers come in for one product, they usually end up buying others as well."

Normand calls his method of combined incontinence/skin care products a "program," and that the term has changed peoples' perceptions about his inventory.

"We're not seen as a run-of-the-mill store that carries generic brands," he said. "We now have a reputation for carrying quality products and people specifically ask for the 'program.'"

This elite status even caught the attention of a high-end skin cream manufacturer, who Normand said ordinarily wouldn't deal with medical supply stores.

"When I approached them about carrying their product, their impression of a home medical equipment supplier was 'brown boxes and dirty windows,'" he said. "They only wanted to deal with upscale retailers like Neiman Marcus and Nordstrom's. But once they learned about our company, they considered us to be a boutique. They make a great product ­ a psoriasis cream that removes dead skin ­ and we are selling a lot of it."

Though providers have a potential marketing edge with private label incontinence products, some independents are doing nicely with the national consumer brands.

"We can compete on these brands ­ there are no Wal-Marts around us and that helps," said Ron Cohen, president of Middletown, N. J. -based Sun Ray Medical. "But sales volume makes a difference and we do big volume for our manufacturers on these items."

Sun Ray, which boasts 14,000 square feet of retail space, also goes against the grain by keeping diapers and skin care separate. The reason, Cohen noted, is that the products are located in two different departments of the store.

"Skin care products are sold through our pharmacy, so we let them handle sales of those items," he said.

Though market analysts continually refer to the "Graying of America" and the impact of baby boomers as key market drivers, not all providers make that audience their primary target. For instance, Special Products in Wichita, Kansas, has an incontinence business that is thriving without serving the geriatric population.

"Our incontinence business focuses strictly on the disabled," said owner Rick Hoppe. "We specialize in serving the needs of disabled children and young adults. We have a loyal following and lose customers only through attrition."

Likewise, Dan Hunt, CEO of Austin, Texas-based D & L Medical Products says his incontinence business serves mainly a younger clientele and that half of his sales are to Medicaid beneficiaries.

D & L's Medicaid clients aren't necessarily indigent, however. Unlike most Medicaid programs, Texas' waiver system is not based on family income levels. Instead, coverage is on each individual's situation.

"Many of these people are extremely overweight and essentially have no way to take care of themselves," Hunt said. "We can serve this population well because we carry many other products they need, such as urological and nutritional supplies." HME