What is Cross Merchandising? Tips for Retailers
Mon Oct 24 2022
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Why Cross Merchandising is Important for Your Store and How to Do It
Cross merchandising is one of the best strategies that retailers can adopt to enhance customer experience and boost sales. It requires some analysis, planning, and experimentation, but all efforts will be rewarded with great benefits for offline and online stores of all types and sizes. Read on to deep dive with us into the topic and learn more about cross merchandising in retail and how to do it.
What is Cross Merchandising?
Cross merchandising is a visual merchandising practice that consists in displaying complementary products from different categories next to each other, in order to encourage customers to make multi-item purchases. Its purpose is to remind them of a need, inspire them with new ideas, and simply optimize their shopping experience.
It is used across different retail categories, from food to fashion, electronics to beauty.
Why is Cross Merchandising Important?
Cross merchandising is important both for customers and retailers, in equal measure. From a customer’s perspective, cross merchandising can make their experience more convenient, inspiring, fast, and overall better. It helps gain customer loyalty and makes them appreciate a retailer’s expertise and efforts. From a retailer's perspective, cross merchandising can help increase sales, reach new customers, and give exposure to products that might need a push.
Different Types of Cross Merchandising
Cross merchandising can be done in many ways, following different strategies and themes depending on purposes. Here are some ideas on how to cross merchandise in your retail store.
Pair complementary products together
This is the most common cross merchandising strategy and involves displaying items that are normally used or consumed together in the same area, as complementary products that can incentivize a joint purchase. This technique is used to remind customers of a need but also to drive impulse buying.
The choice of products to pair with each other is totally up to you and depends on your store’s collection, but it could be a good idea to place a primary product with a secondary, smaller, cheaper, and add-on product. This strategy is also known as secondary product placement.
Some examples of cross merchandising in a retail store based on complementary products could involve displaying candles and home fragrances near the loungewear selection, a mild washing detergent next to intimates, socks and hosiery next to shoes, and so on.
Work on thematic displays
Another popular way of cross merchandising in retail is to focus on themes, especially during specific times of the year. In this case, products from different categories are grouped together because logically linked by a common theme, inspiring customers with new ideas and channeling emotional purchases.
Around the holiday period, for instance, you can display sparkling dresses, elegant mini bags, and festive table linens together, even if normally they would be placed in different parts of the store. And when it comes to the start of Spring, you could play with pastel colors and group soft cotton sweaters with colorful silk scrunchies or other hair accessories. Let your creativity flow and work on inspiring displays that can not only boost sales but entertain customers too.
Play with the unexpected
Quite the opposite of the complementary products method, this strategy consists in playing the card of the unexpected and surprising customers with contrasting products. This is often done in food stores, but it can work for fashion boutiques too.
Placing a product where it normally shouldn’t be, is an effective way to gain a customer’s attention. You can use this method to push sales of items that are not performing well, launch new products that need attention, or focus on products that might be on sale just temporarily with limited-time offers. The purpose is to make customers stop and have a look, arousing their curiosity.
Rely on impulse buys
In a way, cross merchandising is always playing around with emotions and impulse buying. However, there are some choices that are deliberately pushing customers to last-minute purchases, purely out of impulse. This is the method we all know: recognizable yet not less effective, it consists in displaying inexpensive and small items near the counter where customers do their purchase checkout. Here, you can put items that have really nothing in common and that don’t answer to any particular grouping logic: the only reason for choice must be their price point and size. While heading on their way out, customers must be sparked with ideas and needs, grabbing this or that as a small add-on to their main purchase.
To implement this cross merchandising strategy, try and place low-cost items near your store’s counter: lip balms, small jewelry, hair accessories, leather bag lamps, socks and hosiery— items with a low price point but that can easily increase the average order value.
Grow your margin with substitute products
Another effective retail cross merchandising strategy is the one that sees alternative, substitute products placed next to similar, traditional products. This can allow drawing customers' attention towards a same-product version that has higher margins for the retailers: the client’s need is not changed or altered, but the retailer’s profit is enhanced.
When it comes to fashion retail stores, this cross merchandising strategy is often used to push products from the store’s own brand. Your merchandise, such as plain T-shirts or creative key chains, can be placed next to the same branded products, becoming a cheaper alternative for the customer and a more profitable sale for you.
Make the most of the bestsellers
Bestsellers gain a lot of attention, so try and use that attention to put other products in the spotlight. This cross merchandising method consists in displaying less-performing items next to your most loved pieces, in the hope to boost sales for the former too.
If you’re a clothing store, an idea could be to display your best-selling sweater next to some simple pants that would struggle to gain attention otherwise. You can invite customers to try them on together, increasing the chances of a double purchase.
Create inspiring rack arrangements
Another more subtle way of doing cross merchandising is the one applied to rack arrangements, which can be organized with pieces to wear together in total looks. This is the most used method in any fashion retail store and one that brings enormous benefits to customers, greatly improving their shopping experience.
When organizing your store racks, start with a few key pieces and then build the rest of the product display around them. You can start with an outerwear piece, for example, a blazer, or a printed skirt, and then add matching essentials such as blouses, shirts, and scarves.
You also need to consider the color palette: arranging items along similar color families will make it easier for customers to find matching products that go well together.
We hope this article was useful and that it gave you important tips for managing your store's cross merchandising in the best way. If you want to learn more about visual merchandising, don't miss our articles How to Display Your Store Products in the Best Way and How to Dress & Display Mannequins.
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