Cross merchandising
Cross merchandising refers to related products being display together. It is the practice of showing products from different categories (or store departments) in one place, in order to generate additional revenue-also known as add-on sales, or incremental purchase. This is done in conjunction with customer-centric strategies, aimed at improving the overall customer experience.
Cross merchandising improves the image of a store and promoted the look of a certain lifestyle for customers to buy into. It illustrated the variety of selection or the breadth of product a store carries. For example: Batteries displayed next to electronic items: gardening glove placed near lawn-care products; a range of shampoo kept along with conditioners or other hair-care products[1] .
Cross merchandising refers to the display of opposite and unrelated products together to earn additional revenues for the store. Products from different categories are kept together at one place for the customers to find a relation among them and pick up all. Cross merchandising can also be used behind the cash counters on pegs (impulse)[2] .
Features of cross merchandising
There are several features according to cross merchandising[3]:
- unrelated products are displayed together
- the retailer makes profits by linking products which are not related in any sense and belong to different categories
- cross merchandising helps the customer to know about the various options which would complement their product
- cross merchandising makes shopping a pleasurable experience as it saves customer's precious time
Main advantages of cross merchandising
Merchandising gives customers ideas and suggestions on how to carry out the ideas. Below the several advantage of cross merchandising[4]:
- Customers want convenience and one-stop shopping
- Cross merchandising suggests related items
- It organizes products the way they are used
- It can suggest better quality items
- It appeals to consumers' desire to save time
- It makes shopping easier
- It gives customers project information
Examples of cross merchandising
Cross merchandising is a very effective way of increasing impulse purchases and displaying seasonal merchandise and new products, for example[5]:
- mobile covers displayed next to mobile phone
- recharge coupons with new SIM cards
- batteries with electronic appliances
- neck ties or cuff links displayed with men' shirt
- fashion jewellery, rings, anklets, hand bags with female dresses
- shoe laces, shoe shiners, shoe racks with shoes
- audio CDs with CD Players
Limitations of Cross merchandising
Cross merchandising can be a great tool for boosting sales and creating a more engaging customer experience, but there are certain limitations associated with this strategy. These include:
- Lack of understanding of customer needs: Cross merchandising can be difficult to execute effectively if the store owner or merchandiser does not have a comprehensive understanding of the customer’s needs and preferences.
- Over-saturation: If cross merchandising is done to excess, it can lead to customers feeling overwhelmed, confused, or distracted, leading to a decrease in sales.
- Stocking challenges: Cross merchandising requires the retailer to stock a wide range of products together, which can be challenging if space is limited or there are problems with inventory management.
- Loss of focus: Cross merchandising can lead to a decrease in focus on individual product categories, as the emphasis shifts to selling multiple products at once.
- Regulatory challenges: Cross merchandising can sometimes be subject to regulations and restrictions depending on the product category and the country or state.
Cross merchandising can also take on other forms. These include:
- Bundling: Bundling is when two or more products are combined and sold as a single package. This is an effective way to increase sales of two or more items together.
- Promotional Pricing: Promotional pricing is a tactic used to increase sales of a particular product by offering a discounted price for a limited time.
- Category Management: Category management is a process used to maximize the sales potential of a particular product category. It involves analyzing past and current sales data to identify potential opportunities for increasing sales.
- Visual Merchandising: Visual merchandising is the practice of using displays, signage, and other visual elements to create an attractive and enticing shopping environment.
In summary, cross merchandising is an effective strategy for increasing sales by utilizing related products and promotional pricing, as well as other tactics such as bundling, category management, and visual merchandising. By utilizing these tactics, retailers are able to maximize the sales potential of their products and create a better shopping experience for customers.
Footnotes
| Cross merchandising — recommended articles |
| Scrambled merchandising — Differentiated marketing strategy — Consumer sovereignty — Exclusive distribution — Individual account management — Mass Merchandising — Differential pricing — Optional product pricing — Product modification |
References
- Bhalla S., Anuraag S., (2010), Visual Merchandising, Tata McGraw-Hill Education, Sydney.
- Perrey J., Spillecke D., (2011), Retail Marketing and Branding, John Wiley & Sons, New York.
- Prabhu T.L., (2019), Retail Management, John Wiley & Sons, London.
- Spears J.A., (2011), Jump-Start Your Merchandising Career, Xlibris Corporation, New Jersey.
Author: Kinga Krzyściak
