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Hospital Gift Shops:
The Right Retail
The heartbeat of any health care facility, hospital gift shops benefit from
a captive clientele, but they also have the tough task of merchandising to
repeat customers, replenishing quick-turnover stock, and operating on a
largely volunteer staff. Find out how these gift shops are keeping profits—
and spirits—up. Haley Shapley
T
The beep-beep of machines, the long and sterile hallways, the anticipation that hangs
heavy in the air of the waiting rooms — hospitals can be scary places. But there’s always
one area that’s guaranteed to be a respite: the gift shop.
“Hospital gift shops play a large role in the healing culture in a hospital, and many are
the best-kept secrets in the retail world,” says Tim Herlich, manager of the Gift Shop at
Evergreen, part of Evergreen Hospital Medical Center in Kirkland, WA.
“It’s a haven for people to escape,” says Terry Brooke of Vivo Health Marketplace
at North Shore University Hospital in Manhasset, NY, where she’s the interim gift shop
manager. “When people have that opportunity to step out of visiting a family member or
loved one who’s sick, they can come into an area and sort of leave that at the door, so to
speak. It’s a cheery atmosphere, it’s bright, it’s colorful, it’s friendly, it’s warm — it’s just a
great place to disappear to.”
Gift shops don’t just boost morale, though — they also boost the bottom line of their
host institution, sometimes significantly. “Ultimately, the gift shops in a health care
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Prescription
environment tend to generate much higher dollars
per square foot,” says health care retail consultant
Mindy Thompson-Banko, who adds that sales can
exceed $1 million a year.
Name of shop:
The Gift Shop at Evergreen
Hospital located:
Evergreen Hospital Medical Center
City, State: Kirkland, WA
Shop manager: Tim Herlich
Area (size) of gift shop:
1,700 square feet
The value of volunteer labor
One of the biggest factors that sets apart hospital gift
shops from their more-traditional counterparts is the use of volunteers — most rely heavily
on non-paid workers to staff the shop, and some are even entirely run by volunteers. “If
you have people donating their time, it certainly allows you to support the hospital with
the income from the gift shop to a much greater degree,” Herlich says.
Relying on volunteers can create its own set of challenges, though. Many volunteers
are retired and understandably want to take time off to vacation or visit relatives, which
can mean they fall behind on product knowledge while they’re gone. At Vivo Health
Marketplace in New York, where the weather can be quite blustery in the wintertime,
some of the volunteers aren’t able to come in when it snows, whereas an employee
depending on the paycheck might exhaust more of his or her resources to make it
to work.
To deal with what can be a lack of continuity with volunteers, Herlich says they focus on
buying products that don’t require a lot of explaining or active selling. “We look for things
that can sell themselves and have good point-of-purchase displays, and items that are not
inaccessible to the basic customer,” he says. Besides, Herlich adds, that’s a good strategy
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for the audience, many of whom are under duress or are
dropping in quickly. “A lot [of customers] are coming in
under a stressful situation,” he says. “Whether they’re the
patient themselves or they’re a loved one visiting someone
in the hospital, there can be some anxiety there. You don’t
want it to be too challenging to understand what we have
to offer at the gift shop.”
Despite the fact that volunteers usually need to be
managed in a different way than a paid employee would
be, they’re a great asset to a gift shop, thanks to their
enthusiasm for being there and genuine desire to connect
with shoppers. “I’ve seen shops function extremely well
with a motivated and well-trained volunteer base,” says
Andrew Andoniadis, founder of Portland, OR-based
Andoniadis Retail Services. A strong advocate for the use
of volunteer labor, Andoniadis believes the best set-up is a
paid manager, a paid employee or two, and an arsenal of
volunteers.
to Cindy Jones, a speaker, consultant, and designer who
heads retail consulting firm Cindy Jones Associates.
“It’s not unusual for some of them to go into the shop
several times a week, not just a couple times a month or
three times a month,” Andoniadis says. “There’s a lot of
repeat business. Some people go in twice a day — they
go in for a snack in the morning and go in again in the
afternoon.”
Because of the number of employees shopping at
hospital gift shops, payroll deduction is a key offering
to boost business. The swipe of a badge for payment is
much easier than carrying around cash or a credit card,
especially for workers who are popping in while on break.
“Employees appreciate being able to take advantage
of the convenience of buying without cash up front
and interest-free,” says Jones, who adds that employee
payroll deductions can account for 40 to 50 percent
of sales.
Frequent visitors
The type of hospital also affects the clientele — if it’s part
of a large medical complex with many doctors’ offices, the
employee visits may outnumber the drop-ins from patients
and visitors. Those with big maternity wings will get more
Traffi c in a hospital gift shop is predictably steady, and a
sizable proportion of customers are hospital employees —
in fact, this number can go as high as 80 percent, according
happily anxious family and friends than others. At the
Cottage Place Gift Shop at Memorial Hospital in South
Bend, IN, they cater to this demographic and prepare
specially for the siblings of new babies by handing out a
free rose that they can present to mom. Along with the
flower, the shop’s staffers give the big brother or big sister
advice about what to say to mom.
A heavy rotation
That steady traffic that many shops would dream of is, like
many things, both a blessing and a curse. “The blessing
is that we have a lot of repeat customers; the curse is
that every time they come in, they’d like to see something
new,” Andoniadis says.
A big checkmark in the “blessing” column is the chance
to get a very good grasp on what the clientele wants and
target the buying accordingly. “[Hospital gift shops] really
have the opportunity to understand and customize their
product assortment to their audience,” says ThompsonBanko, founder and president of Simply Retail Inc. “They
get lots of feedback and lots of info
from the same types of people over
and over again.”
Major sellers across the board are what one would probably
expect: plush, candy/snacks, balloons, and flowers.
Women’s jewelry is gaining major steam, along with
accessories. “With the economy the way it is, even [hospital]
employees have pretty tight budgets,” Jones says. “If the gift
shop can offer them a little bling or a silk scarf to punch up
their outfits, then they’ll spend the money there.” Brooke has
found this a great product category in which to experiment
and offer a rotating selection, hand-picked by buyers who
travel to New York City, to keep catching repeat customers’
eyes. “Somebody might come in one day and see a bunch of
purses they don’t fancy, but they’ll come in a couple of weeks
later and see five they like,” she says.
Keeping the price point reasonable is an important
consideration for most hospital gift shops, given that visitors
don’t generally go into this type of store looking to spend a
lot of money. At the Gift Shop at Evergreen, the typical price
tag is $10 to $30. “If it goes beyond $30, even if the customer
is able to purchase it, it’s a little out of their expectation,”
Herlich says. “They may
buy 10 items at $10 or $20,
but they’re not coming in
Name of shop: Vivo Health Marketplace
Hospital located: North Shore University Hospital
City, State: Manhasset, NY
Shop manager: Terry Brooke
Area (size) of gift shop: 1,000 square feet
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A sweet escape
short on square footage can accomplish
their goals in a clutter-free fashion with the
right layout. Think it can’t be done?
Consider airport gift shops, which
are often pleasant, well-designed
stores. Thompson-Banko points out
that the two share a lot in common,
including constant traffic, a built-in
captive audience, and high dollarsper-square-foot figures.
Thompson-Banko worked with
the Cottage Place Gift Shop when
the store was forced to move
because of the hospital reconfiguring
the entryway. The result was a new
name, new logo, and a new look,
which features wood floors and a
beach cottage kind of vibe. “We
expect people to go in and feel like
they’ve gotten away from the hustle
and bustle of work or the medical
situation they’re in,” Stover says. After just two months,
revenue increased by nearly 40 percent.
Last year, Vivo Health Marketplace underwent a
renovation to create a more modern, spacious layout that
maximizes sunlight. The result is a comfortable, retreatlike space for employees, patients, and visitors to seek
respite in. “The whole look of the store is different: It’s a lot
brighter, it’s cheery. There’s not one day that goes by that
we don’t have a customer comment that this is the nicestlooking gift shop they’ve seen in a hospital,” Brooke says.
“When people come into the gift shop here, even though
they might be carrying emotionally or mentally a heavy
burden, people always come in with a smile, or if they
don’t come in with a smile, they leave with a smile.”
For the extra revenue, the employee convenience, and,
perhaps most important, the smiles that hospital gift shops
can bring, they’re worth their weight in gold.
In an effort to carry enough products to suit the needs of
everyone who may walk through the door, hospital gift
shops can often come across as cluttered. But even shops
Haley Shapley is a Seattle-based freelance writer who
specializes in retail, travel and health topics. Learn more at
www.haleyshapley.com.
Name of shop: The Cottage Place Gift Shop
Hospital located: Memorial Hospital of South Bend
City, State: South Bend, IN
Shop manager: Phyllis Nielsen
Area (size) of gift shop: 3,100 square feet
for a large purchase, so we have to keep that in mind when
doing our buying.”
Changing with the times
That doesn’t mean, however, that more expensive products
can’t succeed in a hospital gift shop. “A lot of staff in a
hospital really do earn a pretty good dollar,” Andoniadis
says. “In the right atmosphere, higher-priced items can be
sold. In newer stores where there is the space available,
you can create a department of higher-end things where
part of the merchandising of those higher-end things is less
cluttered — higher-end stuff has to be merchandised in an
ambience that enhances perceived value.”
One store experimenting with higher-ticket items is
the Cottage Place Gift Shop at Memorial Hospital, which
has joined forces with Best Buy to offer basic electronics
in a partnership they’re calling Best Buy QUICK PICKS.
The new venture stemmed out of Memorial Health System
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vice president of marketing and innovation strategy Diane
Stover’s desire to update the store to reflect the way people
live today. “You wouldn’t know that we had moved to an
electronic age by looking at the [hospital’s] gift shops,”
Stover says. “We hadn’t changed inventory.”
She first thought a vending machine, like the ones increasingly popping up in airports, would work, but that
didn’t offer the flexibility in product changes that she was
looking for. After consulting with the local Best Buy team,
they decided the best option was to have a section of the
store devoted to electronics including phone chargers, digital cameras, memory disks, and earbuds. “We’re supporting the connectivity that people are continuing to strive
for,” Stover says.
Leading up to the launch in December, a television
raffle prize in the window piqued the interest of passersby
enough that Stover decided to actually carry four television
sets in the store, all of which sold within a week. So far, the
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concept has been a hit with visitors and staff alike, who
enjoy the convenience and gift-wrapping.
Although hospital gift shops are by and large very
traditional, other stores are innovating as well, by exploring
services like ordering through the TV in the hospital room,
using personal shoppers to guide patients, and stocking up
on healthy-living products. Healthy cooking, travel, and
candy are all hot categories, as public consciousness shifts
to holistic wellness and disease prevention instead of just
treatment.
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