Cross- Merchandising
Cross-merchadising is a marketing strategy, where two complementary products are placed next to each other to encourage customers to buy multiple items, allowing a business to increase its revenue.
The main objective of this strategy is to link different items together, which although different, can be logically used together and therefore bought together. This encourages not only impulse purchases, but also improves the customers shopping experience by allowing them to pick up both items in the same section of the store. This strategy may also introduce customers to new products that they may not have intially considered.
An example of cross-merchandising in grocery stores can include placing cheese and wine next to each other, or in a clothing store workout clothes next to sneakers. These items are different but complementary to one another, encouraging the customer to purchase both.
How can you cross-merchandise effectively?
There are many ways in which you can effectively sell secondary products together in order to increase sales and improve the customer shopping expereince. These forms of secondary cross-merchandising include:
Secondary Placements
This is the act of placing the different products, from different categories, onto the same shelf or in the same promotional area.Using the same space for secondary product items allows the cutomer to associate the two items together, and to encourage the purchasing of both items. This not only boosts sales for the store, but also benefits the customer by making it easier for them to find what they need.
This strategy is often used in supermarkets when pairing different foods or drinks together in the same isle. This could include our previous example of wine and cheese, or maybe putting bread close to the shelves where the butter and margarine is sold. This association of bread and butter encourages the sale of both together when seen in the same isle.
Sometimes pairings need to be made to remind the customers of products that they might have overlooked. If you are in a running shop looking for running attire, you can also put other important running products near those clothes. For example a running bag to put your things in for your runs. The customer hadn't thought about it until you helped them make the assosiation.
Displays and Signage
Using signage that promote the complementary products helps draw the eye of the customer to find what they need. Sign can include text such as "Complete the Look" or "Local Favourites", or any bright catchy sign that promotes the products you are wanting to sell together.Displays are another good way to promote cross-merchandising. Grocery stores will use display stands to display items such as chocolate cookies near milk or dairy products, for example.
A common display for clothing stores is to use a mannequin to display clothing along with shoes or accessories.
Another common display technique, that furniture stores use often, is to display an entire room. Couches, tables, pillows, rugs, and other accessories will all be displayed in one room to remind the customer of other products they might need or want for their living room area.
Bundles and Promotions
Bundles and promotions are a way that companies and small businesses can entice the customers to impulse buy multiple complementary items.For example, here at VKF Renzel we offer a "Bellini Summer Gift Set" which includes sparkling wine, nectar and catuccini. We also offer a "Winter Fairy Tale" set including different sweet treats, nuts and coffee.
These bundles are able to promote deals and products to customers and can change according to the season, holiday, sales target, and many other factors which maximize impact. This rotation of promotions and bundles is another great tactic to keep customers intrigued.
This interest in your products encourage them to purchase products they might not have noticed before.
Use your E-Commerce Platform
to encourage purchasing of complementary products
Cross-Merchandising Online
Cross-merchandising is a marketing strategy that can also be used online. Links are often used to encourage additional purchases of complementary goods. This can be done on pages of certain products, or can be done at checkout.Links can be diplayed as words or as pictures for customers to click on. These links can be used to promote products using titles such as "Customers who bought this item also bought...". Another method to link other products is by displaying Accessories on the same page to items that they are looking at.
These links can be programmed to change depending on the product that a customer is looking at and can adjust with a specific customer's purchasing patterns.
Common Approaches for Online Cross-Merchandising
Many online cross-merchandising techniques are the same as the ones used in-store, they are just adapted to the online e-commerce platform. Here are some of the adaptations made:Algorithms
Online, algorithims can be used to analyse each customers' data in order to make personalised product recommendations. These online recommendations are based off of that customer's search history, purchase behaviour and preferences.Advantages of Using Algorithms
- Increased conversion rates
- Enjoyable customer experience
- Increase customer loyalty
Promoting products that actually interest your customer will increase not only their user experience, but also the chances that they will explore the website more and purchase those additional items.
With every purchase and completed transaction of a recommended additional item, the conversion rates increase.
Using bundling and promotions is also a big part of cross-merchandising online.
During an online order, a business can suggest accessories to certain items a customer is purchasing in a product bundle. For example, if a customer has put a phone in their shopping cart, the website might recommend a phone case or screen protector to buy along with it.
Promotions can also be easily shown online. Some websites will use big bright letters to draw the attention to their sales or promotions, while others, like us here at VKF Renzel, might have an easy to find page dedicated to their sale items. Check out our page to see an example of a sales page »
During an online order, a business can suggest accessories to certain items a customer is purchasing in a product bundle. For example, if a customer has put a phone in their shopping cart, the website might recommend a phone case or screen protector to buy along with it.
Promotions can also be easily shown online. Some websites will use big bright letters to draw the attention to their sales or promotions, while others, like us here at VKF Renzel, might have an easy to find page dedicated to their sale items. Check out our page to see an example of a sales page »
Advantages of Bundling and Promoting Online
Bundling and promoting online allows businesses to earn a higher revenue and increase their profit margin. This is because online, with every purchase or every item that is placed in the cart, the website can recommend an additional item to be in a bundle. This leads the customer to spend more on each transaction.The customer's shopping experience is also more enjoyable. By bundling the complementary items online through cross-merchandising, the customer feels that they can make an informed decision and ensure that they have everything that they need or want for a particular service or product.
Online retailers can also integrate content marketing strategies with cross-merchandising. This content includes pages such as blog posts, news, videos, product descriptions, etc. Linking complementary products with these posts helps create a seamless transition from page to product to transaction.
The benefit of linking content with products is that the customer feels informed about the topic before going and clicking on the link to purchase that specific product. Content integration has a few benefits:
The benefit of linking content with products is that the customer feels informed about the topic before going and clicking on the link to purchase that specific product. Content integration has a few benefits:
Advantages of Content Integration
Content integration allows the customer to become more engaged with a website. The customer is learning, while also being entertained. This engagement allows businesses to encourage their customers to explore products or services related to what they are reading.Integrating products and services within your content also enhances brand authority. This is because, by linking products to well researched and written content, it allows the customer to feel safe that they are buying their products from experts in their industry. This postive feeling helps build brand image.
Lastly, by linking content to products or services, search engine optimisation and organic traffic can be improved. This optimisation can help increase the visibility for related products.