Increasing customer spend is one of the keys to running a successful business and, when considering that 70 percent of purchases are made in store, merchandising is important. One of the ways in which a store can do this is by cross-merchandising.
“Cross-merchandising can provide convenience for consumers and inspire them to consider different combinations of products,” explained Katherine Rich chief executive New Zealand Food and Grocery Council.
The cross-merchandising method allows stores to increase basket sizes while also making the shopping experience for customers easier and more effective. The method involves grouping complementary products from different categories together to create more convenience for the customer and to drive store sales for the retailer.
“Cross merchandising is used for a number of different reasons within our stores including to provide inspiration for our customers, pairing complementary products together for customer convenience and highlight seasonal products such as a display for Mother’s Day or Halloween,” said Scott Davidson, general manager merchandise at Countdown.
Cross merchandising solutions are beginning to appear more and more in New Zealand supermarkets. But New Zealand still has a long way to go when compared to their counterparts overseas. One of the biggest areas that has recently seen an increase in cross-merchandising displays is the speciality cheese category. Wanting to create a full sensory experience the speciality cheese section is often accompanied with wine, beer, crackers, chutneys and jellies to name a few. While New Zealand is limited when it comes to cross merchandising alcohol due to government regulations there is no reason why a cheese cannot be paired with a chutney and cracker. Jumbo Foodmarket in the Netherlands was recently spotted pairing its mozzarella with tomatoes in the fresh produce section.
A powerful strategy, cross merchandising creates interconnected solutions for customers while also educating them on what other products exist to match a product. Cross-merchandising can be performed in a number of ways:
Pairing together pasta and pasta sauces or pizza and various pizza toppings at an aisle end offers a quick solution for consumers seeking a quick and easy answer to dinner.
Another example of this would be grouping together salad ingredients. Having the lettuce, tomato, red onion, cucumber and salad sauces together creates an easy answer for customers hoping to whip up a quick salad. Including the salad sauce in the group also means that the customer doesn’t have to venture to the other side of the store to seek out some sauce.
Creating ease and added convenience for shoppers will have them spending more and returning to the store.
USE THE PRODUCE SECTION
Generally speaking, the produce section is the first part of the supermarket a shopper will see so creating shock value can increase spend. It is also at the beginning of the supermarket so if a shopper changes their mind or forgets something they don’t want to have to walk all the way back to the start. Pairing tomatoes with cheese or peelers with potatoes creates ease and sparks ideas.
Demonstrations are a great way to show customers how the products can be used together. International influences have been increasing in popularity in the supermarket aisles recently. One of these new-found foods gaining popularity is dumplings. Demonstrating how to cook dumplings in store not only educates the customer as to how to cook the food but also allows them to taste it. A demonstrator can also showcase the dumplings with a dumpling sauce to increase customer spend.
CREATE A LINK
For cross merchandising to be successful retailers need to create a link. Pairing together just bananas and cereal for a breakfast display is not as successful as pairing together bananas, cereal and milk. Creating a link gives customers a more emotive response and therefore will increase the probability of spend.
UNEXPECTED CROSS MERCHANDISING
A perfect example of unexpected buyer cross merchandising occurred in a UK Tesco store. The retailer noticed that a large proportion of customers purchasing nappies were men as they were often the ones sent out while the women stayed at home to care for the baby. To profit off this phenomenon Tesco started to display beer and snacks next to the nappies and immediately noticed an increase in sales.
ALL ABOUT EASE
Pairing a food item with something that can make using the item easier is an effective way of cross-merchandising. A Fresh Foods store in the US did this by pairing together a bag of cherries with a cherry pitter, and supermarkets are often seen pairing cupcake holders next to baking ingredients to increase customer spend.
THE SPEED SHOPPER
Customers who have come in to pick up a few specific items don’t want to have to walk around the entire store. Displaying meal ingredients together eliminates the need for a shopper to walk the aisles. For example, ice cream is displayed in one section of the store while toppings such as sauce, sprinkles and even bananas are stocked at opposite ends. Bringing all of the items together in one section to create ease for the customer will have them returning in store.
CREATE A MEMORY
Associating shopping with a memorable experience can increase buying habits. For example, a picnic at the beach resonates well with families so displaying possible picnic items together could encourage the shopper to purchase more than they initially came in for.
Shoppers will often forget some of the things on their grocery list so merchandising to assist the customer by placing common pairings together may help them to remember what they need. Placing coconut milk next to curry paste or salad dressings next to lettuce may not only help the consumer but also improve sales.
Supermarkets are beginning to stock more international foods on their shelves. Some of the more uncommon products may cause confusion when it comes to the correct way to use it. Displaying items that complement each other together alongside a simple recipe will educate shoppers on how they can use the items.
Cross merchandising for special occasions is already practised for popular holidays such as Christmas and Halloween but can also be used for less official occasions. Crossing merchandising easy snack solutions during the Rugby World Cup for fans who are entertaining or even creating seasonal displays such as ice cream sundae stands during the summer are both great examples of cross-merchandising.
FIVE TOP TIPS
- Understand the customer: When putting together a display consider how it looks from the customers' point of view. In order for cross merchandising to work effectively, it must make sense.
- Keep with the theme of the store: Don’t clutter aisles or the store. When cross merchandising keep store flows in mind.
- A logical link: Products that are displayed together must complement each other in some way. Pasta and Pasta sauce makes sense, but pasta and soy sauce does not.
- Track the result: Sales of displayed items should increase and if not, the display should be reconsidered.
- Limit the displays: Don’t go overboard with cross-merchandising in order for it to work the displays need to be put together for a reason. Events or seasons are a good way to monitor when certain items should be displayed. If a supermarket has a different display at every aisle end it may become confusing for the customer.