Cross-merchandising plays a vital role in shaping the customer’s shopping journey in retail. The technique places the products in question so that customers are encouraged to check out related items that may not have initially crossed their minds. This is mostly to build an enjoyable and convenient shopping experience.
By displaying products together in articulate combinations, retailers create an opportunity to subtly influence buyers' behaviour and increase sales. The same rules apply to cross-merchandising whether it's in stores or online, serving the purpose of marketing and customer satisfaction. Its strategic use has become essential in today’s competitive retail landscape.
What is cross-merchandising in retail?
Cross merchandising is a method of visual merchandising where complementary goods are designated adjacent to each other. It’s also called secondary product placement. Cross-merchandising gives the customers a more straightforward experience and may inspire their ideas about other products they may need. When really executed, cross-merchandising can easily lead to additional sales and an increased average order value."
Why is cross-merchandising important?
Cross-merchandising has many advantages, including building customer loyalty and increasing sales. One of the aspects of cross merchandising is visual merchandising, an effective way to be used with physical space in a brick-and-mortar store. It is important to optimise every square footage of the store, whether it be the floor, wall, counter, or entryway, to help customers navigate and eventually decide to buy. Let us discuss the advantages that cross-merchandising brings to retail:
1. Increased Sales
When you implement cross-merchandising in your retail store. Learn how to implement powerful product placement techniques in your retail store with the British Academy for Training and Development Course in Selling Strategies in Retail Stores. When all products related to each other are kept in one place, they would motivate the shopper to discover complementary products to his purchase. Impulsive buying occurs as customers think that it is justified to add the extra into their shopping.
For this reason, it has become the most effective method of turning the average transaction value up without seeming too pushy. To illustrate it, such actions help customers select things that would complement each other, like wine and cheese, but maybe they would not have considered it as an option to buy together.
2. Consumer Experience
Cross-merchandising would be adding to an already existing value in improving the viewer customer experience, which is a key aspect of successful retailing. Instead, cross-selling would actually reduce the time and effort that is generally spent by consumers looking for related products. Organised product placement in a retail store makes it navigable and enjoyable for shopping. When customers find in one place everything that they need, they would most likely keep in mind that place and come back again.
3. Advertise New Products
Cross-merchandise new stuff and advertise them at an intersection with other key selling items like other items. Most retailers sell "core" merchandise all year round, or otherwise called "always selling" merchandise. The "core" items are generally regarded as the breadwinners of the store, products that are reliable from season to season and sell consistently. You can place an area to carry new products adjacent to your core display to help sell and bring awareness to new stock.
4. Helping Customers Save Time
All that your customer needs into a single area, saving him from walking across your entire store looking for items. A shopper could take this display and have everything they need to make guacamole, including avocados, garlic, jalapeño peppers, and tomatoes, and complete it by bringing a bag of tortilla chips to demonstrate a very successful cross-merchandising strategy.
5. Inventory Management
Effective inventory management is critical for any successful retail business, and cross merchandising can greatly help you in this endeavour. When we merchandise products together that are likely sold together, we will know the products that are "moving" and the products that are "not moving". This will give you an awareness of your stock levels to use when making decisions, thereby reducing your risk of overstocking or running out of a product. Cross-merchandising becomes a tool to drive sales and maintain inventory.
6. Visual Appeal
When creating a visually appealing store layout, cross-merchandising breaks the pattern of standard shelving. Cross-merchandising allows the retailer to display products creatively to catch customers' attention and entice them to enter the store. For example, creating a display by theme or season creates a dynamic retail environment. This idea of visual storytelling resonates with shoppers, making the experience memorable and causing customers to linger – certainly not detrimental to your business.
7. Inspire ideas
Customers can be inspired by ideas on DIY projects, upcoming holidays, recipes or lifestyle choices simply by grouping products together by occasion or experience. A lifestyle example is a home goods retailer that arranges their products by room and decor; after visiting that store, a customer can picture themselves in the same room in their home. A clothing boutique can also dress a mannequin, standing it next to a rack of all the individual garments for sale.
8. Strategic Partnerships
Finally, cross-merchandising opens the doors for strategic partnerships with brand partners or suppliers. When promoting complementary products from different vendors, it is possible for you to negotiate better deals or co-marketing partnerships. This relationship can bring about exclusive products or special promotions for your store and the brand. This becomes a really good partnership, where everyone wins, and even better, all for your direct benefit, by enabling you to drive more customers into your store.
9. Improve marketing
Branding and marketing are very important in the success of any business. The primary focus of both of these strategies is to drive sales and improve customer satisfaction. When you position products from different product categories next to one another, customers begin to make associative links to the products. Knowing which products are routinely purchased together gives you an opportunity to produce more sales or efficiently achieve your targets with little to no investment.
10. Point out a need
Remind customers that they need another product to use with their purchase. If your boutique sells lingerie and accessories, you could place detergent and a safe washing bag for delicates next to lace bras and underwear.