Retail providers respond to market shifts

‘We had to create a new supply chain for a lot of these things’
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Friday, August 21, 2020

YARMOUTH, Maine – When customer demand for standard DME took a nosedive during the early months of the COVID-19 pandemic, retail providers found themselves shifting gears to meet market demands. 

For Mark Nicotera, president of AZ MediQuip in Scottsdale, Ariz., that meant taking a leap of faith to source a variety of personal protective equipment, which he doesn’t typically stock, from new distributors when he was unable to obtain it from well-known companies. 

“We had to create a new supply chain for a lot of these things and continue to do to this day, buying from companies that came up out of nowhere,” he said. “We were paying upfront, sight unseen. I had six figures in the wind at certain points, but I tried to work with people I had a good feeling about and everything came through.” 

A shortage of gloves is still a concern for Greg McGough, director of retail operations for Medical Xpress in Dallas. 

“We started buying PPE in January and did a good job staying ahead,” he said. “A lot of stuff coming in is counterfeit. Trying to find reliable sources requires thinking outside the box.” 

McGough is also thinking outside the box when it comes to getting paid, implementing a cashless model to reduce the risk of infection. 

“If a customer comes in and that’s the only way they have to pay, we’ll accept it, but we have signs up saying we’ve gone cashless to minimize contact,” he said. “We haven’t had any pushback.” 

Additionally, McGough is kicking around the idea of implementing a “COVID convenience” charge to offset the increased cost of business, including providing PPE and disinfecting the store, he said. 

“We did an analysis and it broke down to 34 cents a transaction,” he said. “We were thinking about adding 18 cents to each transaction, meeting the customer in the middle. I don’t know if we’ll do it.” 

There’s no telling when – or if – costs will return to pre-pandemic levels. Although demand for PPE has waned in the past couple of months, pricing is still elevated, says Nicotera. 

“There was a huge increase on gloves,” he said. “We’re still at pricing levels that are new and different, and customers are struggling with that.” 

Nicotera is proud of the nimble way he and other small providers have responded to the pandemic and says he’s feeling “bullish” on the future – but with retail, you never know, he says. 

“We don’t know what the next few months will bring,” he said. “We could see pent-up demand that will rock us in a different way.”