Did you know that 50% of consumers tend to switch brands if it does not meet their needs through an appropriate merchandising strategy? Now you can see the significance of merchandising and why we need to optimize it.
Cross merchandising is one of the most popular merchandising strategies that can boost your store sales. It gives subliminal recommendations to customers that the other items can be used with the primary one, thus leading to impulse buying and increasing sales of both products.
For example, according to the Merchandising for Profit Study, the sales of work gloves increased by 25% when they were merchandised near garden tools instead of next to the other gloves. Also, clipstrip gloves were selling at a nearly doubled rate when it was put on an end cap with lawn chemicals.
This is cross merchandising. You can apply this strategy to increase revenue and project purchases. If it doesn't sound familiar to you, we will show you why cross merchandising is important and how to do it for your online store.
What is cross merchandising?
Cross merchandising is about arranging products of different or same categories together to influence customers’ purchase decisions. Therefore, this strategy is also known as a secondary product placement, double exposure or double merchandising. Displaying complementary items next to each other can draw customers’ attention to your products, remind them of their needs for additional items, thus increasing your sales and disposing of your merchandise inventory as fast as possible.
In practice, you can see many examples of cross merchandising. For instance, in liquor stores, beers are displayed alongside the counter of salty snacks, such as peanuts and potato chips. Or, laptops and their accessories like cases, stands and screen cleaners, are exhibited in the same place.
The display of bags, wallets, and high heels to attract female shoppers (Source: Reflektion.com)
This strategy of product placement is often seen as offering solutions to buyers and encouraging their impulse purchasing behavior instead of selling a product.
What are the key benefits of cross merchandising?
Let’s see how cross merchandising can increase your store sales, improve customer experience and loyalty.
Saving customers’ time
You can help customers to save their time walking around your store or searching around your website by putting everything they need in one place. For example, if you are selling flour, put it alongside sugar, cocoa powder and butter. Customers who want to make a cake do not need to go anywhere as they can still grab all the ingredients they need in one go.
If your customers can easily find what they need in your store or on your website without spending too much time searching, they are more likely to become loyal customers and come back to your store again.
Evoking an idea for customers
Exhibiting the products grouped by occasion or experience will light up ideas in customers’ minds on holidays or seasons, handmade projects, recipes, decor or lifestyle choices.
IKEA is a master of interior displays to influence purchasing decisions of shoppers. It consists of model rooms that allow customers to visualize how the merchandise will look like in the same room at their houses. The showrooms like this will encourage customers to bring home the items they need to make their living rooms, bedrooms and bathrooms look like IKEA’s staged ones.
Introducing customers to a new product
Want to show a new product? Try displaying it next to your best-selling items or anywhere else in your store to attract attention to new inventory.
Reminding customers of needs for additional products
Normally, customers do not realize they need to purchase a product until they have caught sight of it, especially when it is next to the item they have already been willing to purchase.
Cross merchandising strategy can remind shoppers of needs for other items to use with their purchase, such as displaying belts together with trousers, toothbrushes with toothpaste, cigarettes with chewing gum. By doing this, you are providing shoppers with a solution to a problem they may not have even been aware of, thus, increasing impulse buying behaviors. According to a CreditCards.com survey, 5 in 6 Americans admit that they have made impulse purchases. On average, Americans spend over $5,000 on impulse purchases.
Therefore, if you want to boost impulse buying or encourage customers to purchase a product not on their original shopping wishlist, consider cross merchandising strategies to fulfill their needs.
Online cross merchandising ideas
Just because cross merchandising is mainly for physical stores does not mean e-commerce store owners cannot apply it too. Here are some cross merchandising tactics to do online.
Offering product bundles
Based on insights on which products your customers frequently buy together, group them as a bundle and sell it with an economic and all-inclusive price. For example, on the Amazon website, you can see the complementary products that are frequently purchased together like this.
Bundle pricing on Amazon website (Source: Amazon)
Suggesting similar or complementary products
Do you have a “You may also like” section on your product page? Especially, if you are running an online fashion store, you should consider having a place on the product page to display more items that shoppers may like or can wear with the one they are currently choosing to complete the outfit. For instance, look at how Wildash London showcases the products that customers may like under the item they are viewing.
“You might also like” section on Wildash London products page (Source: Wildash London)
Creating thematic merchandising
You have so many ways to create thematic displays like in physical stores. Online store owners can create collections, catalogues or lifestyle photos to light up ideas in shoppers’ minds and suggest how the products look in real life. Besides, blog articles about products featured in your catalogues also encourage shoppers to visit your store.
For example, on the fashion storefront, you can create a Summer Lookbook with lifestyle photos and multiple related items. Customers just need a few clicks to find the items they need.
Summer is coming and Red Dress has dressed up their homepage with a beach and holiday vibe. The new look is consistent from the top banner to the collection and product images. Even the user-generated content on Shop The Gram matches the summer theme. Thematic merchandising is a great way to catch the latest trends and upsell theme edition products. (Source: Red Dress Boutique)
Cross merchandising tips
A cross merchandising strategy will not work if you do it randomly without customer insights, retail data, logic and even creativity. Of course, each store requires its own display strategy due to the variety of products, locations, customers’ behaviors and demographics. However, there are some rules of thumb to follow when you start a cross merchandising strategy to ensure the sales success.
Paying attention to slow-selling products
The reasons for an underperforming product may be its low visibility and your failure to emphasize the features that shoppers need.
Customers do not have enough time and patience to go through all the product pages. So what you need to do is optimize the merchandising, redirect them to the slow-moving products and boost sales.
Displaying items that are not selling well in different sections of your website, such as the suggestions under the primary item or at the top of the search results, can draw customers’ attention to them and remind them of the need for that item too.
The Product ranking feature of Boost Product Filter & Search will help you configure the ranking of a single product in your customers' search result on the search result page. Choose the item you want to promote and select a ranking option for it. For example, if you choose the “Always prioritized” option, the product you select will be pinned at the top of a search result no matter what your customers search for.
The “Product ranking” feature allows you to set the ranking of a product
Creating a logical relation among products
You need to ensure relevancy in your product display. If you intend to put a pair of products together, ask yourself if they are in the same category or complement each other.
Without a rational connection in a group of products, your customers will be distracted and confused, and your store display will look awkward and messy. Imagine if you display kitchen appliances like cookers next to bathroom stuff - it does not make sense. Remember that the goal of cross merchandising is to evoke ideas and help shoppers to solve their problems.
Not displaying too many suggestions
Giving customers too many choices of additional products may overwhelm and distract them from the original item. When they feel it hard to decide among them, they will end up making no decision. To avoid customer confusion and dissatisfaction, keep it simple and limit your suggestions to a couple of related items.
Another way to limit showing irrelevant search results is to use the Stop words feature of Boost Product Filter & Search. You can use Stop words when you need certain words from your customers' search terms disregarded to get a more relevant search result.
Phrases added to Stop words will be filtered out during search. For example, when a customer types in the search box "summer outfit", it returns products that could possibly match either "summer", or "outfit". This could bring out other irrelevant products or brands in your store that contain the “outfit” word, such as “casual outfit”, “winter outfit”. Therefore, excluding the word "outfit" from search returns will bring out only results related to “summer outfit”.
Choosing “outfit” as a stop word will exclude irrelevant search result that contains this word
Having insights into customers’ purchasing behaviors
If you want to boost sales, first, you need to understand what your customers need. Customer insights, such as the types and quantities of products they purchase, shopping habits on sale-off seasons or customer retention, can help you identify which cross merchandising plan will work best for your store and better meet customers’ needs.
Sometimes, identifying unexpected purchasing behaviors also helps you have a successful cross merchandising plan. An interesting research by Tesco shows a link between the purchase of diapers and beer by male customers. Fathers buying diapers are much more likely to put a six-pack or two in their trolley than other men.
When you have data on the unexpected products that are bought together, you will know what to display in groups. You can get this insight data from the search history of your store website or industry research from credible sources, such as Business Insider, E-Commerce Times, etc.
Learning from other stores
If you have no idea where to start, it is ideal to visit other store websites to see how they are merchandising products. We do not recommend copying exactly. Now you are inspired by the display of other stores and will have ideas to apply them in your own way.
To sum up
It is okay to take a test first to know whether your cross merchandising is effective. More importantly, gaining insights into customer behavior and collecting sales data will help you to go the right way. You can check that information in Boost Analytics.
We hope you will have a successful plan that can increase sales and customer satisfaction.