To help Edloe transition gracefully, we brought in three experts: Bryan Simms, 42, a senior vice president at Lehman Brothers in New York City who specializes in succession planning; Brian Hamilton, 44, who runs Sageworks, a financial-analysis firm in Raleigh; and John Talmage, 45, president of Social Compact, a Washington, D.C., nonprofit that performs market analyses for cities looking to revitalize troubled areas.
John Talmage and his research associate, Katie Reagan, bustle into the pharmacy early one morning with an air of determined efficiency. Edloe joins them, wearing his white lab coat. Reagan, armed with a laptop full of market research, sets up on a small counter in the backroom. They've spent a few minutes driving around the neighborhood, noting the reconstruction and the lack of usual urban-decay signals such as payday loan shops.
"You're in the middle of a gold mine," Talmage says. "Washington, D.C., will add 100,000 jobs a year for the next 15 years, and a lot of the growth is coming down here." He rattles off demographic data, including that customers in Edloe's immediate market area spend $10 million a year in pharmacies. "We need to position you to gather more market share."
The group walks the floor, where Reagan is wowed by the efficiency of the tiny space. "When I heard you had an 800-square-foot pharmacy, I almost fell over," she says. "Per square foot, you outsell the national average and your local competitors by leaps and bounds."
When Reagan asks, Edloe estimates that his average customer's age is 60. He looks shocked when she tells him the average age in his market is now 25 to 35. "You need to push your demographic down," Talmage says. For example, a remodel would modernize the 1970s décor and improve merchandising. Updating the pharmacy Web site will reach an increasingly tech-savvy customer base.
Edloe manages inventory by "walking the floor," but Reagan insists that he needs to leverage technology to help him reach his new demographic. "Your point-of-sale software offers free reports that will give you an idea of what is moving," she explains. "Tweak the inventory to emphasize items that younger customers have been requesting."