Pharmaceutical Merchandising: How to Boost Your Sales

Pharmaceutical merchandising plays a key role in the sales performance of retail outlets and laboratories. For pharmacies and drugstores, it aims to optimize layout and product displays in order to improve customer experience, increase sales, and build customer loyalty.

For laboratories, it involves effective collaboration with pharmacies through a business CRM to guarantee better visibility for their products and influence purchasing decisions.

But behind the term merchandising lies a very vast set of practices, in which pharmacists and pharmaceutical sales representatives can quickly get lost!

That is why Sidely invites you to explore here the specificities and techniques of pharmacy merchandising.

On the agenda for this guide:

1. Useful definitions of merchandising;

2. Challenges related to the pharmaceutical sector;

3. Checklist of pharmaceutical merchandising techniques;

4. Sensory marketing;

5. Shopping journey in the retail outlet;

6. Technological developments.

What is pharmaceutical merchandising?

Merchandising, or product display, encompasses the techniques aimed at optimizing presentation of products to maximize sales. In a retail outlet, this includes layout, lighting, or even shelf organization, and generally speaking, everything that helps attract customers and simplify their shopping journey.

The main goal of merchandising is for customers to quickly find what they are looking for, and yield to the temptation of buying more.

Pharmaceutical merchandising helps to:

• Clarify the offer and positioning of the retail outlet;

• Showcase the product range in an optimal way;

• Highlight products with the highest profit margins;

• Increase the average basket size;

• Convey a sense of order and abundance;

• Strengthen the appeal of the pharmacy by creating a unique atmosphere.

‍Merchandising is essential for enriching the customer experience. It is not limited to shelf organization but also encompasses signage, layout, labeling, product placement, and even stock management.

The real challenge for retailers is to find the right balance between: 

• The sales results of the retail outlet;

• Customer expectations;

• The goals of the laboratories;

• Regulatory constraints.

We will now explore a proven marketing tool to master the fundamentals of merchandising: Kepner's 5 Rights!‍

Kepner's 5 Rights

One of the common approaches to pharmaceutical merchandising is based on the Kepner's 5 Rights method, which optimizes product presentation by ensuring they meet consumer expectations.

Merchandising challenges by stakeholder

Pharmacies and drugstores

For pharmacists, the marketing strategy has a significant impact on merchandising.

To begin with, the distribution of pharmacies across the territory is regulated by law, and pharmacists de facto inherit a local clientele which, except for coastal areas or major traffic routes, constitutes the bulk of the establishments' turnover.

As a result, each trade area is characterized by specific socio-professional categories, age groups, and purchasing power. All these features allow pharmacists to determine typical customer profiles. They can then organize their product range and sales space to maximize commercial value based on these "buyer personas."

Furthermore, although foot traffic in pharmacies relies primarily on the sale of prescription drugs (which pharmacies hold the monopoly on), the drugstore section helps increase average basket size. The role of pharmaceutical merchandising is therefore also to prompt impulse purchases to increase customer value!

Moreover, since medicine prices are fixed by the state, the drugstore section is a powerful lever for generating profitability. Excellent merchandising should enable drugstore products to sell "themselves," thus leaving pharmacy staff with more time to provide medical advice.

Finally, merchandising can help to differentiate. Indeed, since competitors offer the same medicines at the same prices, pharmacies can try to create a unique experience by working on the layout, ambiance, and even promotional offers.

In drugstores, merchandising is just as important, if not more so: without prescription drugs to sell at the counter, a drugstore is a retail shop in its own right! Laboratories and store managers are therefore fully focused on maximizing profit margins, without any public health mission. Customers visit to buy necessities, beauty, or wellness products, knowing that their purchases will not be reimbursed. In other words, sales performance relies entirely on merchandising!

Brands and laboratories

For manufacturers of medicines and drugstore products, the goal is to maximize preemption in order to occupy the most strategic retail spaces (end caps, windows, cash registers, etc.). Since space is limited and competition intense, brands constantly seek to position themselves strategically along the in-store customer journey. Pharmacies are also ideal ground for direct marketing strategies, such as samples and advertising displays.

While pharmacists are aware of the impact of merchandising on their turnover, they often lack the time to implement it. Brand sales representatives can see this as a real opportunity. Moving from mere negotiators to advisors, they try to deliver maximum value by analyzing layout, assortment, lighting, and product promotions.

This support capability is the basis of pharmaceutical trade marketing, which aims to jointly increase revenue for both laboratories and retail outlets.

20 pharmaceutical merchandising techniques

Sidely therefore offers you a complete checklist to help you create your merchandising plan.

You can also use it regularly to monitor the strength of your sales system. Pharmacies and drugstores are the first who can use it, but medical or pharmaceutical sales reps can also use it for auditing retail outlets and shelves.

Information (ILV) and advertising (PLV)

• Clear price display: ensure prices are clearly visible to encourage quick decision-making (as a reminder, displaying prices is a legal obligation). Make sure they are visible from a distance, or conversely (depending on your strategy), reduce the font size to force customers to step closer to the shelf;

• Signage: headers that are legible right from the entrance of the pharmacy;

• Floor-standing displays: best avoided, as they are bulky and can obstruct the visibility of regular shelving;

• Visible instructions for use: display directions, precautions, or benefits directly on the shelf to free up time for pharmacy staff. Be careful, however, that reading time does not keep customers in front of shelves for too long, as a minimum turnover must be guaranteed;

• Digital signage: use screens to stream promotions or health tips;

• Visibility of top-sellers: place star products in the center of the display and at eye level;

Ambiance and differentiation

• Theme windows: regularly refresh window displays to spark interest;

• Sensory marketing: appeal to the senses by incorporating scents or background music;

• Cleanliness of shelves and other fixtures: the pharmacy must be spotless regarding cleanliness and hygiene;

• Minimalism: use a clean layout to focus attention on products;

• Attractive lighting: illuminate products well to catch the eye, especially in the evening.

Organization and layout

• Visibility: eliminate visual obstacles;

• Entrance and counter: position essentials (e.g., hand sanitizer) to meet immediate needs;

• Impulse offers: offer inexpensive, small items at the counter (vitamins, hand creams) to prompt impulse buys;

• Easy access to popular products: place high-demand products within arm's reach. Customers like self-service, and waiting areas or open-access sections are suitable for bulk bins or clear acrylic clearance bins;

• Checkout impulse buys: highlight small useful items (sanitizers, chewing gums, lip balms) right next to the cash register;

• Cross-selling: group complementary products by health concern (muscle pain, allergy care) to simplify the customer journey and increase average basket size;

• Floor decals: floor markers help customers better understand the zoning of the sales area and facilitate their shopping journey.

In-store animation and promotions

• Rotation and seasonality: adapt products according to seasons. E.g., sunscreen in summer, cold medicine in winter;

• Promotional posters: regularly update signs regarding current offers and other health information;

• Discovery zones: dedicate space for new products or suppliers;

Promotional activities: organize events to boost sales (e.g., free samples, product demos). Track performance to ensure you are not wasting strategic space.

Sensory marketing: ambiance and factors of differentiation

Merchandising is also an important differentiation lever for both pharmacies and drugstores. While franchises and integrated chains often benefit from strategic support in this area, independent stores must think of everything to claim their territory and create a unique place.

To stand out from competitors and build customer loyalty, retail outlets have every reason to create an atmosphere that inspires trust, cleanliness, and well-being. Here are some key elements to consider:

• Light: bright, natural white lighting for a clean and clear atmosphere;

• Colors: light tones (white, blue, green) to convey a sense of health and hygiene;

• Layout: clear organization of sections and aisles for a smooth customer journey;

• Scents: light fragrances (e.g., plant-based), without interfering with medicinal products;

• Sound: soft and discreet music to create a calm atmosphere;

• Service desk/area: counters and seating for relaxed discussions with staff (space permitting);

Health visuals: educational posters or screens addressing health issues and promotions.

Shopping journey and maximizing the average basket size

Another key element of pharmaceutical merchandising, the design of the retail space, must be conceived to maximize value at every step of the customer journey, helping notably to increase the average basket size.

For this, it is essential to know your customer base and design the path to comprehensively cover their needs.

Here is the typical organization of the sales journey:

• Shop window & POP display: capture attention with promotions, new arrivals, and seasonal offers;

• Self-service area: encourage impulse purchases with practical and seasonal products;

• Drugstore section: showcase high-margin products, often on promotion;

• Counter: build loyalty through personalized advice and recommendations of small, low-cost add-on products;

• Consultation/private area: build trust with personalized services that lead to cross-sales;

• Orthopedics/medical equipment section: sell expensive products supported by specialized guidance.

Technologies that boost sales performance

While the development of inventory management systems (IMS) or RFID tags has allowed considerable progress in optimizing supply and inventory, it is merchandising that is experiencing the most spectacular technological advances in the pharmaceutical sector.

Merchandising software is now capable of analyzing customer preferences, consumption trends, and peak demand periods. Pharmacies and drugstores can thus adjust their assortment and in-store placements to maximize sales, while offering a personalized experience to their customers. These smart planogram systems can help determine financial performance ratios, such as margin per shelf meter, helping optimize shelf yield. Naturally, artificial intelligence is leveraged to identify optimization opportunities.

Sales representatives for drugstore brands can use a CRM dedicated to drugstores, allowing them to optimize merchandising compliance, shelf checks, or route planning.

Digital merchandising in pharmacies has also seen a significant boom in retail outlets in recent years. Many pharmacists are won over by the practicality of the process, since once a screen is placed in a strategic area, such as an exterior window, it is extremely simple and fast to adapt content according to seasons or current promotions. However, interactive displays and augmented reality (AR), long heralded as the next merchandising revolution in the world of medicine and drugstores, are yet to achieve widespread success.

Technology thus allows businesses to reach levels of sales performance beyond traditional marketing techniques. Indeed, pharmaceutical merchandising relies both on old theoretical knowledge, such as Kepner's 5 Rights, and on continuous software and digital developments.

Pharmacies, shops, and brands work closely to align their respective commercial interests, making merchandising the key to sales performance. An exhaustive pharmaceutical merchandising checklist allows teams to constantly monitor the optimization of in-store sales setups.