Cross merchandising is currently one of the most popular practices in retail. It basically consists of placing related products in the same area at the point of sale (POS) to remind shoppers that they need to buy them.
In this context, any retailer, regardless of their industry, can benefit from cross merchandising. However, for that to happen, you need to understand how consumers think and pay close attention to how they choose what goes into their cart.
In today’s post, we’ll take a closer look at the concept of cross merchandising, showing how it can be applied at the point of sale to boost a company’s revenue and highlighting some of its main benefits. Check it out!
What is cross merchandising?
Cross merchandising is much more than placing products in strategic locations, even though that’s the definition of the term. The idea behind this technique is to create themed spaces within stores that can inspire shoppers to buy more products than they normally would.
These themed spaces optimize the point of sale and serve to suggest new things to try or to promote items that shoppers might otherwise pass over.
In some organic food stores, for example, cross merchandising is used to encourage the discovery of new flavors by pairing cereals with seasonal fruit. This kind of suggestion is enough to give a section of the store its own identity, helps drive specific offers, and increases the chances that a visitor will try or add to their purchase new products from the retailer’s catalog.
What makes for good cross merchandising?
Good cross merchandising doesn’t have to be limited to offering related products, even though that was the defining principle of this sales strategy for quite some time. The idea of promoting milk and chocolate drink mix in one place seems natural to us today, because we’ve become familiar with the concept. However, cross merchandising can be based on:
- selling products from different categories that go well together;
- displaying a range of options within the same category;
- creating themed areas that improve the shopping experience by saving the shopper time.
Doing cross merchandising well depends on understanding your visitors’ behavior and monitoring the feedback they give you in the form of purchases. But if you want to start using the technique right away, check out the following recommendations:
Focus on the shopper’s mission
When someone walks into your store, they have a goal. Someone planning to buy items to upgrade their breakfast will rarely walk out with alcoholic beverages. Likewise, someone planning to buy an external hard drive may not have a router in mind.
So you need to understand the shopper’s mission and make it simpler. Start from this principle to build efficient cross merchandising, and make the shopping journey faster and easier by placing related products in one spot at your POS.
Seize opportunities
It’s well known that placing certain items next to the checkout leads shoppers to decide to take them home while they wait in line. The same principle can be applied to cross merchandising.
If you know that middle-aged men tend to buy a certain product that sits on a particular shelf, add other items that might interest them in the same spot to increase your sales. Use the information you have to raise your average ticket.
Jog the shopper’s memory
Who hasn’t left home to buy a list of items and ended up forgetting one of them? One of the most widely used cross merchandising techniques focuses on exactly this issue and encourages retailers to create themed areas that are increasingly aligned with what their customers want.
Salad dressings near the vegetables; underwear and socks on the same display; even accessories that match a particular collection, strategically placed next to the garments, can be just the boost you need to accelerate your sales.
What are the advantages of cross merchandising?
There are many ways to do cross merchandising, but what can really convince you to invest in this tactic are the results it brings to the business. That’s why we’ve listed some of the ways this strategy can help retailers achieve their goals:
Attracting customers
Cross merchandising isn’t just a tool for increasing your average ticket. When applied well, the technique can help you attract new customers to your store.
When we have a positive experience, we’re motivated to return to that place. Imagine being welcomed by a store in such an efficient way that you save time and shop more effectively.
You’ll be more likely not only to come back, but also to recommend that store to your friends. Cross merchandising, therefore, works as a promotional tool.
Increasing your sales with cross merchandising
Of course, it’s impossible to ignore the benefits of cross merchandising for a store’s results. By offering the right products in the right place, the likelihood of making a sale goes up, and so do your chances of making it a bigger one. Remember: when your average ticket rises, your ROI grows.
Defining a marketing strategy
Retailers often struggle to define a marketing strategy that truly delivers results. However, once they’re introduced to cross merchandising, they gain room to experiment with product placement and better understand their customers.
This translates into better promotional efforts and even a product selection that more precisely meets shoppers’ needs.
Cross merchandising works best when it adds convenience to the shopping experience. That’s why good planning, combined with this strategy, will enable your company to reap all the benefits this tactic has to offer.
Enjoyed learning more about cross merchandising? Want to keep learning? Then read on about customer experience and how it can help your organization stand out!
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