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Cross merchandising is a different form of marketing. It’s an agreement between two or more companies to use each other’s products in their branding and advertising efforts without charging the company that owns either product for these services. This strategy can be beneficial, as it allows brands to strategically place their items within another brand’s distribution channel with little risk.
Cross merchandising is the practice of exhibiting products from many product categories together in order to encourage people to buy multiple things. Customers benefit from cross-merchandising since it reminds them of a need, sparks ideas, and streamlines their shopping experience. Cross merchandising, on the other hand, gives value to you, the company owner, by increasing sales.
We’ll look at both in-store and online cross-merchandising methods in this post so you can start enjoying the benefits right now.
1. Use complementary items to boost impulse purchases.
The most prevalent kind of cross-marketing is the placement of things that are often used or eaten together in the same location in order to encourage a combined purchase. This method is utilized in a variety of sectors to encourage spontaneous purchases.
For example, some grocery shops may put cookie dough packets next to milk, wine bottles next to gourmet cheeses, and waffle cones next to ice cream because, while being in distinct product categories, they are often bought and consumed together. Complementary goods on the same display can help simplify your clients’ shopping experience by allowing them to identify things that logically fit together without having to browse the whole store.
A frequent complimentary item technique is to pair a larger, more costly main item with a smaller, less expensive add-on item. Customers will be more inclined to make add-on purchases if you use this method, also known as secondary product placement.
This grocer places waffle cone squares in the refrigerator door for ice cream to drive customers to pick up a pack when they grab their favorite cold treat. (Source: Sales & Orders)
To demonstrate how the goods work together for a quick supper, Trader Joe’s displays taco components together in the same display. (Photo credit: Pinterest)
To encourage parents to buy all they need for safe play, one retailer includes first aid kits for its children’s bike display. (Image courtesy of Reddit)
2. Inspire Thoughts Through Themed Cross-Merchandising
When things are grouped together based on a theme, such as a forthcoming holiday or the start of the school year, this is known as thematic cross-merchandising. Themed displays often bring items from different areas together to give a solution or stimulate an idea.
For example, in my store, we always put up a table and rack display for Valentine’s Day that featured our red, seductive, and love-themed items. We’d also take products from all throughout the shop, including jewelry, cards, and Valentine’s-specific add-ons like plush bears and chocolate hearts. This allowed customers to quickly put together a date dress or present without having to scour the whole store or start from scratch.
Themed merchandising often includes theme-specific goods that are only available for a short period on the sales floor, such as the plush bears and chocolate hearts described earlier. Layer these goods with your regular items to help sell seasonal stuff and stimulate ideas for how “normal” products might be used for the season at hand.
A retailer puts out Valentine’s Day display with everything you could possibly need for the ideal V-Day present. (Photo courtesy of Green Purse PR)
This back-to-school display reminds customers of all the school supplies, clothing, and other knickknacks they’ll need to get the school year off to a good start. (Photo credit: Pinterest)
Shoppers may see all of the colorful clothing they can wear to enjoy the Olympics in an Olympics-themed exhibit. (Image courtesy of Quartz)
3. Use contrasting merchandise to make products stand out.
Another cross-merchandising method is to group things that are unconnected or contrast each other. Customers will stop and take a closer look at the items on display if retailers employ this method.
For example, in the spring, supermarket and box shops may prominently display Peeps marshmallows around their stores to alert customers to their availability; and around Halloween, some stores may install eerie décor or fun-size confectionery in unexpected locations to remind customers of the forthcoming holiday.
When you want to draw attention to a product that isn’t selling well, contrasting product merchandising is a wonderful way to achieve it. It may also be used to promote seasonal or limited-time products.
This seller placed Nutella’s new product, Nutella & Go, in an unexpected spot, making customers stop and look. (Source: Fit Small Business)
4. Use Substitute Options to Increase Margin
Substitute goods are a form of cross-merchandising technique in which alternative solutions are shown alongside a more conventional offering. The replacement product either saves the customer time by letting them to view all of their alternatives in one spot or encourages them to buy a more costly product, resulting in a bigger profit margin for the merchant.
This method is particularly common among businesses that sell their own line of items since it allows them to display their alternative alongside the typical brand name item. This strategy is also often used to highlight the more costly version of the same product and encourage consumers to try something new or pamper themselves.
Customers are more inclined to buy things that are near their eyes, therefore put your most costly item replacement on eye-level shelves to encourage customers to buy products with higher margins.
Many grocery shops, for example, offer pre-diced onion containers beside the standard onion displays. Alternatively, merchants may put their own brand of white T-shirts next to a popular brand like Hanes.
Organic pasta with a high price tag is shown alongside popular lower-cost varieties at a supermarket. (Image courtesy of Italy Magazine)
This grocer, which is attached to the fish and meats counter, offers prepared alternatives like sushi, tempting clients to forgo the cooking and choose a ready-made option. (Image courtesy of Store Brands)
This business has a single display with all of their IPA selections, with the more costly ones displayed on eye-level shelves. (Photo credit: Pinterest)
5. Use Impulse Purchases to Encourage Add-on Purchases
When you cross-merchandise impulsive items—products that are often bought without thought—you position them in places of your store where consumers are most likely to discover them. Small, low-cost goods that buyers may readily add to their purchase are known as impulse items. Consider chocolates, costume jewelry, playing cards, or munchies. The area near the register, shop entrances, end-cap displays, and clearance or discount zones are all places where impulsive purchases are likely to occur.
In 2020, impulse purchases climbed by 18%, totaling $183 a month.
The supermarket or convenience store checkout aisle is the most typical example of impulse item cross retailing. Candy, magazines, chapstick, mints, lighters, hair ties, and other low-cost odds and ends are generally found here. These things have nothing in common other than the fact that they are popular items that buyers could buy on the spur of the moment.
To encourage spontaneous purchases, this convenience store offers periodicals and snacks in the checkout lane. (Image courtesy of the Center for Science in the Public Interest.)
On their cashwrap, a merchant displays cards, magnets, and other impulse products. (Image courtesy of Vend)
Add impulsive products, like sweets, to end cap displays to make the ends of your aisles tempting so shoppers can’t help but indulge. (Image courtesy of Statusphere)
6. Use Best-Sellers to Attract Customers
Cross-merchandising successful goods with alternative or complementary products may also attract clients’ attention and enhance the sale of the things around them. People will be lured in by the product they recognize and more eager to browse the whole department if you give your bestsellers a solitary display or prominent spot amid unrelated goods.
For example, in my shop, we put up whole ensembles on our face-out racks that had one “staple piece,” or an item that we knew our clients liked, as well as a “statement item,” or a new or bolder article to finish the look. The staple item engaged buyers with something they already knew, and by matching it with another statement item, the second item gained exposure and engagement as well.
To assist them to acquire awareness and encourage product discovery, bestsellers are listed alongside other product possibilities. (Image courtesy of Array Marketing)
7. Use Complementary Rack Arrangements to Inspire Customers
Arranging your racks with components that may be combined to create a full appearance is another cross-merchandising idea. This will inspire your customers and is a space-saving technique to logically arrange unrelated goods and increase sales.
Beginning with a major piece—either something colorful, printed or a bestseller—and layering out with similar things from there, I recommend starting with a key piece. The main item will grab the customer’s attention, while the rest of the items will be natural complements to their outfit.
Additionally, branding each rack with a certain color family will make it simple for customers to identify similar items and encourage them to buy a complementary item to go with their first purchase.
At my shop, for example, we would organize our racks such that anytime we had a skirt or outerwear piece, which was some of our best-sellers, the surrounding pieces would be shirts or blouses that could easily match and turn the attraction piece into an ensemble. Customers enjoyed that they didn’t have to look for a matching shirt when they selected a jacket off the rack. Customers who only intended on buying one item, on the other hand, would be more likely to add a matching piece to their order. Who could blame them when the ideal blouse was hanging right in front of them?
This boutique’s shelves are stacked with items that may be mixed and matched to create stunning ensembles. (Image courtesy of Boutique Store Design)
The racks stack complimentary items to make buying easier, and the faceout display present and outfit suggestion. (Photo credit: Pinterest)
Each rack is organized by color family, making it simple to mix and match components to create ensembles in one location. (Image courtesy of Daily Inspirato)
8. Draw attention to products that aren’t working well.
Slow-moving items may be placed in various store sections where they may attract more attention or where customers are more likely to see a need the product will answer.
For example, for many years, Buehler’s Fresh Foods, a grocery shop in the United States, carried cherry pitters. They were, however, not selling. The cherry pitters were then placed in the produce department with packs of fresh cherries by Buehler’s, and they quickly sold out in all 15 locations.
This method requires a lot of trial and error, so keep an eye on your underperforming goods as you move them throughout the shop. Every product has a buyer; all you have to do now is figure out how to interact with that buyer via marketing.
9. Utilize Product Demos & Samples to Show Use Cases
When shops establish a display in which sales associates utilize items to demonstrate their usefulness or give out product samples for consumers to test, this is known as product demos and samples. Cross merchandising may be used in product demonstrations and samples by integrating items from different departments to demonstrate how they can operate together, enticing consumers to purchase all of the components so they can duplicate the demos and samples at home.
A home improvement business, for example, may show you how to create a birdhouse with your children using a few tools, a few hardware parts, some wood, and a paint kit. Alternatively, a grocer may try a simple supper recipe that just requires three products found throughout the shop.
Product demos are very useful for marketing food, beverages, kitchen gadgets, tools, and other such items, and they’re a wonderful way to persuade people to think of new ways to utilize things they may not have considered previously. Samples and demonstrations are also a great way to highlight slow-moving or new items that clients may not be aware of.
This employee informs customers about a fantastic cracker and dip combo she’s trying. (Image courtesy of Southern Living)
When putting up a demonstration, make sure that all of the goods that will be used are arranged around the display so that buyers can easily add them to their baskets. Also, make sure your salespeople have all of the product information they’ll need to address customers’ inquiries.
10. Make the product connection as clear as possible.
When cross-merchandising, you want to make sure that, even if the items on display aren’t from the same department, the relationship between them is logical and obvious to customers. When your item placement seems illogical to consumers, one of the biggest hazards of cross-merchandising is that it will not only reduce your sales potential, but will also negatively impact your customers’ experience and feelings about your company.
Let’s imagine you’re browsing at an art supply store and come across bleach next to black sweaters. Customers will not understand this combination unless it is made clear that the bleach may be used to produce exciting tie-dye patterns on black garments. This will not only give customers the appearance that your business is disorganized or untidy, but it will also encourage them to purchase neither the sweatpants nor the bleach since there is no reason to do so.
Use signs or demonstrations that make the product link explicit to prevent this problem. When cross-merchandising, you want to make sure you’re thinking about if the items would make sense to you as a consumer. If the response is no, you’ll need to add some display components to assist establish the link.
The tagline “Let’s Dunk This!” makes it apparent that these cookies were designed to be dipped in milk. (Image courtesy of Fit Small Business)
This seller informs customers that, although the items in this display are categorically different, they are all locally sourced. (Image courtesy of Shopify)
The elements in this part are clearly made to work together to create entire ensembles, as seen by the mannequins in complete costumes. (Image courtesy of OUYEE Displays)
11. Use upselling strategies such as bundling.
Bundling is when a merchant puts many things together to be sold as a group—for example, a bath kit that contains a bubble bath, a towel, a loofah, and lotion—and it works both in-store and online. Bundling is an excellent cross-merchandising approach because it allows you to group things from different categories together in a manner that encourages consumers to buy numerous items in one transaction.
Returning to the bath kit example, imagine a consumer who came into your business just to purchase bubble bath, but saw the bath kit option on display and decided to buy the bundle, leaving with four things when they only planned to buy one. This is known as an upsell, and it’s a terrific method to increase your revenue.
Upselling is the process of persuading a consumer to improve their purchase by adding another item or selecting a more costly option.
Simply examine what goods are often used together, such as batteries and a flashlight, and make those things accessible on your product sites for individual sale as well as as a bundle. You may also create “often bought together” recommendations, which include the projected price of all the goods when purchased together.
Bundling is a common approach over the holidays, since bundled items make gift-giving a breeze. Another strategy to encourage bundle purchases is to give the bundle at a discount, even though purchasing the products separately would be more expensive. Customers will feel like they received a good bargain, and your average ticket value will rise as a result.
This bath kit includes a variety of goods that may be bought alone or as a set. (Photo courtesy of HerbivoreBotanicals on Instagram.)
By offering all of the components together, this shop makes it simple for clients to purchase everything they need for a comprehensive tool set. (Photo courtesy of The Home Depot)
This wellness bundle contains all of the brand’s essential goods as well as a mixing tool, ensuring that you have all you need. (Image courtesy of LoveSweatFitness)
Amazon presents complimentary goods usually bought together packaged into one price on numerous product pages. (Photo courtesy of Pure360)
12. Use real-life examples to show how useful something is.
Using lifestyle examples to highlight how things may be utilized in real life is a common online cross-merchandising tactic. This may be performed by using the following methods:
- Images: Include lifestyle photos on your website to show how your items are used in the real world.
- Blog articles: Write blog entries regarding your items and how they may be utilized on a daily basis.
- Demonstrations by influencers: Reach out to influencers and ask them to utilize your items in a post to illustrate how a real person uses your products.
- Create a product catalog that includes information on the product’s characteristics and applications.
Customers are often inspired and may see a real-life example of how they could utilize your items when they visit an online site since retailers often offer lifestyle material on their homepage.
Your lifestyle material will operate similarly to an in-store demonstration for cross merchandising, where you may mix numerous goods and illustrate how they can be utilized together. For example, you may go to a website and see a group of models wearing the brand’s apparel while visiting the city or dining out, or someone using the seller’s pasta machine in their home kitchen, as well as the brand’s new tableware and flatware lines.
The homepage of this website offers three lifestyle vignettes that demonstrate how the goods may be used in real-life situations. (Photo credit: Magicpin)
This home goods business has an Inspiration Blog where customers can learn how their items may be combined to create lovely houses with various moods, such as this “Modern and Mindful Coastal Home” blog article. (Image courtesy of Crate & Barrel)
This apparel business utilizes influencer material to teach how to use its products and highlight real-world applications. (Image credit: Instagram)
13. Make suggestions for add-ons
When online sellers present comparable goods on the product page of another piece so that they may be easily added to buyers’ baskets, this is known as add-on recommendations. This method may be utilized to offer clients all of their alternatives (think other colors or models), inspire them, and encourage them to buy more items.
The idea to “Complete the Look” is a prominent example of this method. This is when clothes companies will display the jeans, jewelry, and bag that go with the top you selected.
Add-on recommendations are also an excellent cross-selling approach since they make it appealing and simple for clients to add products to their purchases by presenting comparable pieces on the product’s page.
Cross-selling is when a shop shows their customers other goods that are logical add-ons to their main offering and can be simply added to their purchase.
These “complete the look” ideas demonstrate how to wear the Neo Noir Top, making it simple for customers to purchase a whole ensemble. (Image courtesy of Shopify Community)
When customers are on the blueberry product page, an online shopping service proposes additional components that you would need to prepare a smoothie. (Image courtesy of Instacart)
On the product page for this blouse, H&M provides both product suggestions to make a complete outfit as well as other similar products that the shopper might enjoy. (Source: H&M)
When consumers add items to their shopping carts, you have another wonderful chance to provide product recommendations. You may offer more things that compliment or are comparable to the items in people’s baskets if you can keep track of what they’ve previously chosen and are going to purchase. This is a terrific way to cross-sell things that consumers may have overlooked, and it puts them in a handy location so they don’t have to explore your whole website.
Let’s imagine a consumer has a couple summer blouses in her basket, and you have a pop-up in the cart advertising your sandal deal, which is a different summer item from a different category.
This summer shopper is directed to additional fun products to compliment her shirts by an in-cart pop-up for sandals. (Image courtesy of Nielsen Norman Group)
Tracking & Improving Your Cross Merchandising’s Effectiveness
When it comes to determining what makes cross merchandising successful, it all boils down to sales and whether or not your initiatives are driving them. Keep in mind, too, that cross-merchandising is a trial-and-error process. To maintain your cross merchandising at its best, you’ll probably have to attempt a lot of different techniques and constantly refining them.
Use the ideas below to help you drive and measure your cross-merchandising success:
Collect Sales Data & Identify Trends
Keeping track of your sales data is the greatest method to figure out how effectively your cross merchandising is performing. You’ll want to look at how cross-merchandised items are selling and see if there are any buying patterns you can use in your own cross-merchandising.
Assume you’ve discovered that the majority of buyers who purchase pasta sauce also purchase pasta. This knowledge would drive you to cross-sell these items. For example, let’s imagine you put watering hoses in the seeds section of your home goods shop, but they’re not being sold there. This may cause you to put the watering hoses in the gardening equipment area rather than the watering hoses part.
Observational data is used by certain merchants, particularly in tiny stores. We advocate adopting an integrated point-of-sale (POS) system like Lightspeed for bigger stores or those that want an automated solution. Lightspeed is a cloud-based sales tracking system with built-in reports that include information on inventory, personnel, and more.
Observational Data: Insights into sales or other retail metrics such as customer experience or staff feelings based on your or a salesperson’s observations on the ground.
Examine the strategies of your competitors.
Another technique to get insight into effective cross-merchandising tactics is to look at the methods used by your rivals. You might go to other small firms for ideas, or you can look to your industry’s leaders.
To guide every merchandising choice, industry leaders often have corporate merchandising teams that are continually studying best practices and tracking their own performance. Utilize their knowledge by visiting their establishments and borrowing cross-merchandising ideas to boost your own sales.
For example, in my shop, we carried casual apparel with a bohemian vibe, comparable to Urban Outfitters and Free People. Our merchandising team would often visit Free People and Urban Outfitters for ideas and to see how these industry leaders styled and set up their locations.
Track the number of units sold per ticket (UPT)
The average number of units sold per transaction, or units per ticket, is a useful metric for determining how well your overall cross-merchandising is functioning. Many companies may keep track of this figure on a weekly or even daily basis.
If this figure is rising, your cross-merchandising campaign is succeeding since the number of goods sold in each transaction is growing. If this statistic is declining, your cross-merchandising campaign has to be reevaluated since the number of units sold each transaction is reducing. UPT does not provide individual product information, but it does provide an overall picture of the effectiveness of your cross-merchandising strategies.
Industry-Specific Cross-Merchandising Use Cases
Cross merchandising may be used by any business to boost sales, although it will appear different depending on the kind of store. When creating a cross-merchandising strategy, think about how your consumers shop and what they require. Because these criteria alter based on the sector, cross-merchandising methods should likewise range from one store to the next.
The size of your business will determine who does your merchandising. Larger companies often have central operations divisions devoted to merchandising strategy testing and implementation. Merchandising strategy and implementation, on the other hand, are often the responsibility of the shop owner or manager for small stores.
Almost every sort of retail shop uses cross merchandising, including:
Cross merchandising is mostly used by grocers to provide an easier shopping experience, since most supermarket consumers have a pre-determined shopping list. Putting chips next to jalapeño peppers, avocados, and guacamole spice packets, for example, makes it simple for customers to grab everything they need to prepare guacamole.
This “recipe format” is a common method for speeding up and simplifying the client buying experience. Consider putting spaghetti sauce in the same aisle as the pasta and flour next to the chocolate chips. There’s also the possibility of getting some food ideas here. Simply arranging a variety of goods with some hint of how they work together for a recipe is a terrific approach to encourage supermarket customers to explore new items and boost sales.
This grocer mixed and matched a variety of breakfast goods, making it simple for clients to pick up their morning needs or get ideas for new meals. (Photo credit: Pinterest)
Box shops often provide a large variety of products, and customers have specific needs as well as browsing habits. Cross merchandising is employed in this situation to make shopping more convenient. Installing seasonal or themed product displays so that timely goods are front and center, as well as placing complimentary items near together so that consumers don’t have to explore the whole store, are examples of this.
Big box shops strive to make the most relevant things easily accessible—holiday displays are a wonderful way to keep the most up-to-date items in the spotlight. (Photo credit: Pinterest)
Customers often come to a convenience store for a particular product, therefore merchants rely on cross-merchandising to encourage spontaneous purchases. When food is displayed on the side of a beverage refrigerator, it’s virtually impossible not to grab a bag of chips to go with your Coke.
Snacks are hanging on the side of a beverage refrigerator, making it simple to grab a snack and a drink. (Creative Display Works Inc. is the source.)
Boutique shopping is often a creative and experimental experience for clients who, more often than not, do not have specific needs and are seeking inspiration. Boutique shops in this scenario employ cross merchandising to generate ideas by using displays, complementing product placement, and clever rack configurations.
People would come into my business ready to purchase but certain they couldn’t put an outfit together themselves on several occasions. While sales employees were on hand to assist, these consumers often ended up purchasing a full ensemble from a mannequin display for the ease and certainty that the items would complement each other.
These mannequins are wonderful sources of inspiration for boutique buyers, demonstrating how different things may be combined to create a cohesive look. (Image courtesy of Business Object Tips)
Customers frequent gift stores, especially those in tourist locations, for browsing and, you guessed it, gift purchasing. Cross merchandising is utilized by this sort of shop to create themed displays and offer gift combos. For example, a gift shop may offer a combination gift consisting of a beach scented candle and a beautiful shell.
Pre-bundled gift boxes are available from Simone LeBlanc, an online gift store, to make present giving simple for consumers and encourage multi-item orders. (Photo courtesy of Simone LeBlanc)
Office supply shops carry a broad range of items that are grouped together. These kinds of stores are popular with shoppers who want to acquire particular things while simultaneously exploring. By cross-merchandising new brands and innovative supplies with staple goods, office supply businesses may expose clients to new brands and innovative supplies.
Let’s pretend you’re looking for ballpoint pens. There are colorful displays advertising new, erasable pens and special notebook paper that does not bleed ink when you discover the writing equipment aisle. You would never have noticed these things if they weren’t right next to your favorite Bic pens, and you find yourself unable to resist purchasing one of the notepads.
Above their distinctive sticky notes, new Post-it items are shown. (Image courtesy of RockTennDisplays)
Conclusion
Cross merchandising is the practice of placing items from several categories next to each other in order to boost sales. This product placement technique boosts sales by reminding consumers of a need, providing a simple solution, or inspiring them with an idea. To cross merchandise successfully, merchants must pay careful attention to their sales statistics and client buying trends.
Cross merchandising is merely one facet of your overall merchandising strategy, which will be a big part of beginning your retail firm. To understand more about the other parts of merchandising, such as product price and shop layout, and how to execute them, see our article on merchandising definitions and tactics.
