For many distributors, the push for more B2B ecommerce is to sell nationally if not on a global scale.
But for one smaller distributor—Geriatric Medical and Surgical Supply Inc. in Woburn, Mass.—the prime motivator for expanding ecommerce is cementing its regional market share in New England.
Geriatric Medical has been selling medical supplies to nursing homes, assisted living centers and other long-term care facilities in New England since founder Jack Siegal started the business as a diaper delivery service in 1945.
Today, Geriatric Medical serves a base of more than 300 customers in Massachusetts, New Hampshire and other nearby New England states. The distributor won’t break out actual sales metrics, but about 86% of all sales are now electronic, broken down by buckets from new and repeat sales on GeriatricMedical.com, through electronic data interchange, and through punch-out software that enables a buyer to access a supplier’s website from within the buyer’s own procurement application. “We’re mostly digital these days,” says Geriatric Medical director of ecommerce and marketing Justin Racine.
Healthcare is mostly a local business, and B2B ecommerce helps Geriatric Medical build a stronger regional business base by giving customers—including long-term care facility business managers ordering new and repeat products, or other clinicians such as nursing supervisors and charge nurses—faster ways to process transactions, research and order new or replacement products, and get orders delivered.
Using ecommerce to stand out as a supplier
Geriatric Medical carries an inventory of about 30,000 products in categories that range from over-the-counter medications and supplements to medical devices and supplies such as bladder scanners and bedside bags. Last year, Geriatric Medical shipped out 3.6 million packages with an average fill rate—orders filled through immediate stock availability and without back-orders—at nearly 100%.
What makes better and faster regional order processing happen is ecommerce, a relatively new sales channel for Geriatric Medical—but a channel that it has developed to improve service to customers and stand out as a supplier.
The company, which runs on ecommerce technology from Minneapolis-based Insite Software Solutions Inc., has only been selling online for about five years. But in that time, an emphasis on ecommerce has helped Geriatric Medical expand its business base from nursing homes into other types of assisted living facilities, add new product lines and create an easier and more customized order-management and fulfillment process for individual customers. Its level of online services has also helped it win a designation as “preferred supplier” by the Massachusetts Executive Office of Health and Human Services.
“We are really an ecommerce company,” Racine says. “Ecommerce is at the core of what we do and it books the majority of our business.”
Analytics helps to address customer segments
B2B ecommerce and more extensive use of analytics to break down customer segments has helped Geriatric Medical diversify its product inventory by helping business managers, purchasing managers, and nurses and other clinicians consolidate order-processing from multiple vendors into a single order for Geriatric Medical, Racine says.
For instance, for long-term care facilities placing a weekly replenishment order for cotton swabs, rubber gloves and disposable gowns, Geriatric Medical’s ecommerce platform will identify other complementary products for wound care or patient safety and nutrition and offer coupons and discounts as a purchase incentive
Better use of analytics also has helped Geriatric Medical create more personalized marketing campaigns based on customer personas. “Our buyers can be administrative managers to medical staff, so we have different campaigns that resonate with different customers,” he says. “Administrators may get cost-savings campaigns with discounts, and clinicians may get messages based on the results of clinical trials for a new product.”
Helping customers save on expenses
Long-term care facilities operate on tight margins. Most of the revenue comes from Medicare and Medicaid, and the average profit per year is between 3% and 4%, according to Lifemattersmedia.org.
With that financial scenario in mind, Geriatric Medical built its ecommerce operation around helping nursing homes and related facilities achieve cost savings, Racine says. “We help facilities find creative ways to do more with less,” he says. “That means building out our website in ways that make ordering quicker and easier, creating better purchasing lists and achieving full visibility into their supply rooms.”
Geriatric Medical has come a long way with ecommerce in a short time, Racine says. “Just five years ago, digital was only 55% of revenue and today it’s closer to 90%,” he says.
The medical supplies distributor now has more competition from such national competitors as McKesson Corp., Cardinal Healthcare. But so far, ecommerce and Geriatric Medical’s fleet of delivery vehicles and rapid delivery to long-term care facilities in New England is helping it keep and grow its regional market share. “We get and need a lot of leverage from ecommerce,” Racine says.
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