January 10, 2017

The Important Role of Retail to Healthcare Facilities

Over the last 10 years, an increasing number of healthcare facilities have modernized in an effort to make the spaces more functional, inviting and comfortable for patients, staff and visitors.

This move has seen new buildings being dramatically different than older ones, and older buildings undergoing redevelopment to transform their facilities.

At the heart of these transformations is a renewed focus on three areas: community, retail offerings and a focus on health and wellness from the cradle to the grave.

Retail plays an important role in this move to modernize healthcare facilities and offers a way to better serve not only patients and visitors, but staff as well, all while creating revenue new opportunities for the facility.

Retail Supports the Community AND the Facility

Retail is a key part of any hospital set up. Whether it’s the foodservice, auxiliary gift shop, pharmacy or any other retail offering, people need a place to stop and take a break from whatever they may be dealing with. Also, staff need the chance to run errands during work hours to support their work/life balance. Healthcare retail offers this opportunity.

It also offers the chance to get away for a moment, while still remaining on site, which is essential for patients and the people who are caring for them.

In a 2009 survey of more than 3,000 visitors and outpatients at seven hospitals in the Toronto area, seven out of 10 people indicated that the presence of businesses added great value to the hospital experience

What they found is that people have a genuine appreciation for retailers that operate within hospitals and they are actually more likely to use that same retailers when they are outside of the hospital, due to positive brand recognition.

The same study also found that the number and variety of shops was the second strongest driver (after the expertise and friendliness of staff) of consumers’ positive overall impression of hospitals and their willingness to recommend the institutions.

A strong retail strategy should align with the brand story as well as integrate into the community. As a means to do so, I have several key elements I like to examine the possibility of integrating when working with hospital retailers, such as:

  • Local partnerships
  • Location: right place, right concept, right price
  • Sustainability
  • Increase focus on culinary, fresh/healthy cooking
  • The brand story of the hospital
  • Digital and social media
  • Community engagement
  • Authentic local flavour
  • Local signature events
  • Retail-tainment

Retails Supports Everyone

Budget pressures plague all hospitals and retail within the hospital can help provide a new or additional revenue stream to support hospitals and they continue to evolve their services. Hospitals continually strive to improve the healthcare experience for their patients, and additional revenue translates into better services for everyone.

So how can hospital retail serve patients, healthcare workers and visitors? Here are just a few ways:

  • Creating an outstanding experience for anyone who uses their services
  • Providing services to staff to improve work-life balance
  • Increasing alignment and integration with patient services
  • Creating a community destination that increase the comfort of those spending time there
  • Extending the continuum of care

Hospitals are different from other facilities in that they have a captive audience, and this is a unique opportunity to generate additional revenue through retail sales. Hospitals starting to now focus on developing and implementing retail strategies that improve the overall healthcare experience for all stakeholders.

Retails Provides Much Needed Revenue

All you need to do these days is watch the news to hear about how generating an appropriate level of revenue to maintain services is a challenge for all hospitals.

Because of these rising costs, it has become increasingly more important for hospitals to generate sustainable sources of revenue to reduce reliance on provincial government funding.

In 2012, the Ontario Province Budget projected to reduce healthcare funding growth to 2.1% annually. This represents a steep decline compared to the 6.1% growth for 2003 to 2011. In addition, the majority of Ontario Hospitals will only receive approximately 85% of the funding they need from the provincial budget.

Clearly, hospitals are greatly in need of ways to make up the shortfall.

Whether in a small rural or large urban hospital, retail represents a special opportunity to have services that benefit not only the people who go there, but the facility itself. If you do not have a retail strategy already in place, it’s time to start looking at one as a means to evolve your retail, improve your customer experience and increase revenue for your facility.

LHR Consultants has considerable experience working with healthcare retail operations to help them modernize and drive additional revenue for the facility. To discuss your specific needs, contact us for a free consultation at: [email protected].


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