For those unfamiliar with Simply Retail, Park Nicollet was one of our first healthcare clients. They are the masters of retail within healthcare. Prior to hiring Simply Retail, Park Nicollet was already operating 32 stores on its campus; today, it’s operating 59 stores total with 8 additional retail concepts in development.

Park Nicollet’s retail operations have evolved, under the leadership of Ilene Leister, to be a fully functioning retail system that truly serves patient needs, supports physicians’ recommendations and generates significant revenues due to clearly defined business goals and objectives.

Creating the customer experience
While the original Park Nicollet stores did sell products, they looked and functioned like typical hospital retail shops. They did not offer a compelling customer experience, utilize proven retail techniques or generate significant revenues. Explains Ilene Leister: “Our original stores were white boxes. Everything was beige and the merchandising made the space look clinical. In fact, we had the catheters and ostomy products out in front of the store. What it said, to anybody walking by, was “You are sick’ - and that’s if you could find the stores. They looked like any other clinical department.”

Long story short, Park Nicollet hired Simply Retail. We worked collaboratively with the health-care system, offering specific retail recommendations that would create an engaging customer experience inside the stores and out. One specific recommendation: Introduce retail branding within the store design. Tanek, an architectural firm specializing in Healthcare Retail and a partner of Simply Retail, was hired by Park Nicollet to design their stores and coordinate the build-out.

“A big problem for healthcare, when it comes to store design,” explains Leister, “is that they hire architects who design clinics. But when you design a retail store and you use a clinic architect - which is what Park Nicollet did before - the retail store ends up looking like a clinic.” Park Nicollet has two design groups: one for retail space and one for clinical space. Tanek is Park Nicollet’s preferred vendor for retail design.

Of course, store design is only one retail detail. There are many more details, which Park Nicollet has implemented over the years. A few of these recommendations, along with lessons learned, are highlighted below.

1. Recognize retail is a business. Be realistic.
Retail, like any business, requires an investment in time and resources. Successful stores, that actually appeal to customers, require staff training, infrastructure, processes, and sales plans. “One thing that was shocking when Simply Retail presented our Retail Discovery,” explains Leister, “was that Mindy [Thompson, Founder and President of Simply Retail] projected high revenues but then she also said “You’re going to need a new set of managers.’To healthcare executives, a whole new level of people can be horrifying. No one wants to hire a bunch of new people, costing money. But the reality was ... we needed to hear that. It’s only when you get a realistic picture that you’re then able to choose whether to go forward or not. You need to hear about the infrastructure needs, the IT needs, and the management and leadership aspect. You need to address the fact that retail needs to be a nimble supply chain, which typically healthcare doesn’t have. That’s the reality picture and that picture is what will generate the millions of bucks.”

2. Build a culture that recognizes retail is an extension of patient care.
Retail generates new revenues for healthcare. That’s a fact. But if your sole focus, for choosing to add retail within a hospital or clinic, is generating revenues then you’ve missed the bigger picture. Retail is an extension of patient care, a message that needs to be communicated and understood throughout an entire organization. “At Park Nicollet,” says Leister, “we define retail as an extension of care. Retail should move the patient towards self-management of their disease, otherwise it shouldn’t be inside healthcare. If we were just selling furniture or things that aren’t meaningful to healthcare, it wouldn’t fit or last. Retail, like any initiative within healthcare, has to have a purpose attached to it. It has to match the mission or the vision of the organization. We’ve worked hard over the last years to change our culture inside Park Nicollet so that providers see products as an extension of care. Patients can’t take care of themselves at home unless they have some of our products. We’ve defined the gap [between the doctor visit and the patient’s life at home] and filled that gap by educating our doctors and setting our culture around products as an “extension of care.’”

3. Make certain you have deep support from the executive group.
Adding retail within a hospital or clinic is not appropriate for every healthcare organization. You have to have the right timing and leadership - where the executive group sees the opportunity, wants to expand patient care, and is ready to act. Says Leister: “Our CEO, David Wessner, could see what was happening on the care side. He knew patients were having to pay more out-of-pocket. He wanted the discussions. He wanted Park Nicollet to get comfortable with talking to patients about the fact that they have to pay for services as well as products.” For Park Nicollet, the timing and leadership were right. But that’s not always the case. “Some in healthcare miss on the mission,” says Leister.“They miss on the “How does this align with our organization?’ They think retail is Target™. You have to move to the right or left of that thinking and define the middle ground. Healthcare, also, does not have a lot of patience. It wants instant results. But it takes time to build a business. To do it correctly, you have to have great leaders. Critical to our success and, I believe, critical to anybody’s success is the deep support of the executive group. We have that at Park Nicollet. The timing was right, and our CEO was right.”

4. Hire the right retail expertise and leadership.
As with healthcare, retail has specific processes, procedures and techniques to serve the customer well, streamline operations, and generate revenues. Understanding these “Retail Details’ requires retail expertise. “Within our Retail Discovery,” recalls Leister,“Simply Retail recommended that we remodel every single one of our stores. None of them had been remodeled in five to seven years. That was scary in itself, but that was a better sell to our CEO. He’s a realistic businessman and he wouldn’t have trusted the proposal if all it said was “Oh, you can make millions.’” Wessner saw the big picture and the specifics, and understood what was required. But to fully execute retail recommendations, Park Nicollet needed its own retail leadership. Believes Leister: “You need to hire the right leadership within the retail area so there is constant feedback to the executive group. We [the retail team] needed to tell our executive group, “Okay, you may see more expense coming down the path but it’s going to pay off in the end. We needed to develop and show them our strategic and financial plan, which we did. And though we spent money, now it’s beginning to pay off. It’s hard work and it requires people who aren’t traditional healthcare people.”

5. Understand the healthcare system’s positioning within the market.
Healthcare systems have an enormous advantage when selling health-related products because healthcare is their expertise. These systems must remember that, unlike Target™ or Wal-Mart™, they know healthcare. “People say to us, “Well, aren’t you in competition with Target?’ No, we really aren’t,” says Leister. “We’re here to serve a patient, rather than a consumer. Our sales staff is all about education - making sure the retail product is appropriate, used correctly, makes a difference or solves a problem in that person’s health condition. For example, with a heart patient, our sales associates start by asking a patient “Do you have heart failure? I see your doctors prescribed compression stockings. When you get home, what’s your energy level like? Can we help you climb those stairs better, or get in and out of bed easier? Or do you need a toilet seat riser because your energy level is poor and you need help standing up?’ What we heard over and over from patients is “They sent me home and I had a hip replacement and I couldn’t get up off the toilet.“ Nobody educated the patient about what they might need. Healthcare is excellent at providing care within the walls of healthcare. But customers go home with their health conditions and, suddenly, they’re faced with a new set of problems. Products fix, solve and support patients in dealing with these “at home’ problems. Retail, I believe, is something every healthcare organization should offer.”

Simply Retail, too, believes retail is something every healthcare organization should pursue. If you’d like to explore retail opportunities within your own organization, please call me at the number below and we’ll schedule a Meet and Teach.

Thanks to Ilene Leister for her willingness to share her views about retail in healthcare.

Warmest regards,

Mindy Thompson
Founder/President, Simply Retail, Inc.
email: mindy@simplyretailinc.com
office phone: 612-659-8200, ext. 12

Simply Retail, Inc.
227 Colfax Avenue North, Suite 150
Minneapolis, MN 55405
Phone: 612-659-8200
www.simplyretailinc.com