Which strikes you as more likely to be purchased first: a hospital bed sealed in its shipping carton and sitting on the shelf of a warehouse-style, self-serve retail store, or the same hospital bed out of the carton and fully set up, adorned with a fluffy comforter and inviting pillow, adjacent to a nightstand, lamp, and other bedroom accouterments—all while customer-service specialists facilitate the sale nearby?

If you chose the former, you should get out of the business. Or at least get out of Eden, NC, because you clearly will never cut it as a strategist for Layne's Family Pharmacy and Home Health Care, which merchandises its floor exactly along the lines of that latter scenario.

As a result, 8-year-old Layne's—bent on treating its customers to a shopping experience unlike anything its area competitors offer—is enjoying impressive sales growth. "We put our hospital beds out on the floor so that customers not only will see them, but also will have the ability to touch them, sit on them, and understand them," says Kevin Layne, RPh, co-owner. "We're big believers in the idea that the friendlier the product, the better the potential for it being bought or rented."

MAGNIFICENT BUILDING

The city of Eden—situated in the northernmost part of North Carolina's Piedmont region, the foothills of the Blue Ridge Mountains—was named by colonial-era surveyor William Byrd for its biblical garden-like beauty. Eden today has a population of 15,800, and is the largest of the tiny metropolises that make up Rockingham County. About 45 miles to the south and southwest are major population centers such as Greensboro and Winston-Salem. Almost one-third of the jobholders living in Rockingham County are employed in those big cities and spend $4 million annually on personal services there. Layne's is trying to bring some of that $4 million back to Rockingham County by eliminating the need for people to use the big cities for DME products and services, whether they work in those locales or not.

As things currently stand, about 20% of the customers who walk through the doors at Layne's come expressly for DME products, and nothing more. Another 40% visit to have prescriptions filled and, while staring at those items for home use, end up buying or renting some of them. The remainder come solely for prescription medications, over-the-counter remedies, vitamins, nutritional supplements, and sundries traditionally carried by drugstores—and they depart with no DME purchases in tow. "We started in 2000 as just a pharmacy and after a while began dabbling with DME," says Kevin Layne's twin brother, Keith Layne, RPh, who is the store's other co-owner. "Five years after we started selling DME, we were bursting at the seams with it." So much so that the siblings were forced to leave their 3,600-square-foot converted one-time seafood restaurant and relocate to a larger building.

But what a building it was. For their new site, the Laynes chose a 1950s-era landmark rich with local cultural significance—the former retail outlet of Fieldcrest Mills, once Eden's largest employer. "Fieldcrest was a textiles manufacturer bought out some years ago by a company that itself was later acquired before the eventual final owner ended up going bankrupt," says Keith Layne, who adds that he and Kevin were at pains to preserve the original look of the 25,000-square-foot historic structure once they started modifying the place to suit their retailing vision. "Many of the changes we made were subtle. For example, we've installed automatic-opening doors at the front."

SHOCK AND AWE FACTOR

Inside, many of the changes were not so subtle. Says Wayne Emerine, operations chief and general manager, "We've made our store more visually enticing by employing elements of European design. These include use of curved counters, curved seating, an indoor tree, and ambiance-rich blue accent lights along the perimeter of the showroom ceiling. Since women predominate as customers, they're who our decor is meant to engage."

Five years after starting as solely a pharmacy business, the Laynes incorporated DME into the mix.

Kevin Layne is less reserved in his assessment of the interior visuals. "Our approach to merchandising in general is to create ‘shock and awe' by striving for the ‘wow' factor," he says. "You can't walk 3 feet into this store without being overwhelmed. One thing we learned is that presentation is very, very important" because excellent presentation fosters credibility. "If you have credibility in the eyes of your customers, you're going to gain their trust"—trust, of course, being necessary for loyalty, and loyalty being essential for business survival.

Consultant Jack Evans guided the Laynes through the process of transforming the store into a retailing powerhouse. "One of the things Jack impressed on us was the importance of adjacencies," says Kevin Layne. "This is the idea that a customer who comes in for a particular product will have need for a second, complementary product. So to encourage the purchase of the second product, you display it adjacent to or very near the first product."

Characteristic of the Laynes' approach to merchandising is flexibility. "We adapt to the need as it presents itself," says Kevin Layne. "If people want walkers, that's what we give them. But not just one or two walkers. We try to give them the widest possible selection."

ROOM TO SPARE

The Laynes (both are 1990 graduates of the University of North Carolina) joined the ranks of pharmacy owners after a decade working in chain drugstore operations for other independently owned pharmacies. "Never having been in business for ourselves, we weren't sure about what to have in the way of DME-HME product mix," says Kevin Layne. "So we eased our way in, with a little of this and a little of that, until we were able to get a good handle on what worked and what didn't." Customer inquiries also provided a way of identifying products to carry. "People," he continues, "would come in and ask for specific DME items. If we didn't have them, we soon did."

As their commitment to DME deepened, the brothers carved out space elsewhere in the store for use as a patient education room. It was not long afterward that the room was taken over by a trio of clerks hired to do little more than file insurance claims on behalf of DME customers. Other rooms were eventually allocated for this same purpose. "We ended up bringing on a total of seven more people to just do billing," says Kevin Layne. "It got crowded around here pretty quick."

The Laynes expect DME sales to increase in the coming years, but prescriptions are still predicted to remain as the company's core business.

In the new store, claustrophobia is a thing of the past. "The center aisle alone is 12 feet across," says Keith Layne. "It's not like in some chain stores where you walk in and your shoulders are brushing up against cards and candles."

To the right of the center aisle, just inside the front door, are angled gondola-type shelves that help steer traffic to the pharmacy counter (the gondolas, which possess high visual appeal to women, contain over-the-counter remedies and other nonprescription goods). To the left is a customer service island, which the Laynes refer to as "the doughnut."

AMPLE SELECTION

Beyond the doughnut is the first glimpse of the store's DME offerings—a 20-foot-long wall filled with braces and sport wraps. Product displays continue into an adjoining room some 72 feet wide. Here are found footwear and special fittings to promote lower extremity circulatory health for diabetics, a key constituency of the pharmacy. "We have a computerized device that very efficiently plots the pressure points on a person's foot as they stand, and we use this information to help our customers receive the best-fitting orthotic or compression stocking product," says Kevin Layne.

Nearby is an equally impressive collection of products for mastectomy patients. These include the standards, but also products intended to help patients regain their sense of beauty, such as wigs, hats, swimwear, and other fashion-oriented accessories. They are displayed so as to evoke the feel of being in a boutique, rather than a clinically oriented shopping environment.

Another room further in contains upward of 30 mobility devices—manual and power wheelchairs plus scooters and lift chairs. "We have them in different sizes, features, and price points," says Kevin Layne. "We try to have everything the patient can think of—and a few they haven't."

Twin 20-foot-high exterior display windows at the front of the store are used to fullest advantage with frequently changing product vignettes that showcase various specials, seasonal wares, and anything else the window-dresser thinks will beguile passing motorists and pedestrians.

SYMBIOTIC RELATIONSHIP

The Layne brothers sought accreditation as a way to improve all aspects of their business. Ultimately, they believe the process enhanced their overall efficiency.

Medicare competitive bidding has not yet come to Eden, and now that the industry has secured an 18- to 24-month delay, the program is even further on the back burner. Nonetheless, the Laynes are ready for it, having 3 years ago undergone accreditation through the Accreditation Commission for Health Care. "We did not become accredited for the express purpose of billing Medicare," says Kevin Layne, noting that only 17% of HME revenues come from Medicare reimbursement dollars (by contrast, Medicaid is 31% and private insurance 52% of income). "Accreditation was sought mainly so that we could make certain we were doing things the right way—sort of a self-improvement course for our business, if you will." Keith Layne concurs: "It was a demanding but valuable exercise because it developed in us real structure and processes that made us a better organization generally and created a more thorough understanding of our HME business model."

That model is in large part dependent upon the capture, cultivation, and preservation of customer trust and loyalty, the Laynes explain. "One of the reasons our DME-HME business has been so successful is that it's built on relationships—people know that we care about them and that our caring is genuine," says Keith Layne.

DME volume at Layne's is expected to grow over the next few years. However, the brothers do not believe it will overtake their core business—the filling of prescriptions. Rather, they see the two becoming more or less equal in importance. "Pharmacy and DME are so complementary to one another that it's almost like a symbiotic relationship," says Keith Layne. "Each causes the other to thrive." Kevin Layne adds that the pairing of pharmacy with DME represents a potent competitive advantage. "No HME company can match our offerings because of our pharmacy, and no stand-alone pharmacy can match us because of the DME component," he says. "It's a one-two punch."

Rich Smith is a contributing writer to HME Today.