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Cross merchandising is a marketing strategy that makes it possible to generate sales for products that fall into different categories by linking them in the minds of consumers. In a retail setting, this can mean setting up displays that include two or more products that are different, but can logically be used together. The idea is to entice customers who came in to purchase a particular item to also purchase additional items that are on display in the same area and can be used in tandem with the first item.
One of the best examples of cross merchandising is in the electronics section of a retail store. In a section where stereo sound systems are on display, the management of the store may choose to display such items as batteries, universal remotes, speaker wire, or possibly even a small selection of popular music CDs. Thus, a customer who comes in to buy a new compact stereo system may choose to also pick up a universal remote that will operate the system as well as other electronic devices that the consumer already owns. At the same time, the customer can also pick up batteries for the remote and purchase one or two new CDs to play on the stereo system.
Employing the concept of cross merchandising has benefits for both consumers and for retailers. For consumers, the ability to pick up everything that is needed to go with a product without going down multiple aisles saves time. At the same time, the retailer has the opportunity to sell additional items at one time, while also building customer loyalty with those who appreciate the fact that they could get what they wanted in one aisle, rather than traveling down several aisles. The end result is that retailers increase sales, and consumers are more satisfied overall with the shopping experience.
In order for cross merchandising to work, it is important that the products displayed together do have some sort of logical connection. For example, a clothier would not display men’s neckties next to women’s lingerie and expect to increase sales. However, if those neckties are displayed with a selection of men’s suits and accompanied with items like dress shirts, cuff-links and crisp handkerchiefs for jacket lapel pockets, the possibility to cross-sell items increases significantly.
The strategy of cross merchandising can be used in just about any retail setting. Movie rental stores may create a display featuring a specific group of movies, and include candy bars, soft drinks, and popcorn in the same display. Perfume counters in department stores may also display scented lotions and soaps along with the bottles of perfume. Sporting goods stores may display helmets, tire repair kits, and biking gloves near a rack of bicycles. As long as the items displayed together have a logical relationship to one another, the strategy is highly likely to work.