The Art of Cross Merchandising
As the title suggests, cross merchandising truly is an art form, and involves far more than a last minute decision when the Grocery Manager comes over and says "how about if we put this cereal case stack next to your banana display which will help you sell more bananas." The truth is that there is a good chance that you will actually sell more bananas by simply having a larger banana display (perhaps spilling over to where the cereal case stack would be) than by adding in the cereal.
Quite often cross merchandising efforts evolve very much like in the above example. That type of scenario can easily occur during busy times or periods leading into various holidays throughout the year. Your store will be overflowing with product, and typically there will be more product than there is merchandising space. In order to achieve success with cross merchandising there are three ingredients that are critical to making your display work:
Location - Where should the display go? Should it be in the produce department or in another section? Keep in mind that we will be looking at this from the bias of the produce perspective. We want to have a storewide awareness, of course, but we also want to do what is best for produce as well. Typically, most cross merchandising efforts land in the produce department. This is because it appears that there is more room for free floating case stacks in the aisles. The key real estate question should be "will I increase my sales more by adding a companion non-produce item to the merchandising effort, or will it be more beneficial to just add a free floating produce display there instead?" In most cases the best location for a cross merchandising display will actually be a grocery end-cap. This allows for the best visual tie-in of the product and gives the most opportunity for a promotional type display.
Planning - Planning is critical for the success of a cross merchandising venture. Occasionally the spontaneous effort will work, however the success rate is far greater when there is planning and coordination involved. At least once a month it's a good idea to have a planning session with your other department heads with the focus being on how to take the different products within each department to create a storewide merchandising opportunity. A good cross merchandising effort needs at least three items to truly make it work. Cereal and bananas, for example, does not necessarily constitute cross merchandising. Most people understand how these two products are linked and chances are it won't really create any new sales. If, however, you add a new soy milk to the mix, then the entire display becomes more intriguing, and you give people who perhaps were not thinking about shopping for cereal that week, a good reason to try the three products.
Promotion - Cross merchandising will typically work best if you have promotional signage that makes it very clear to your shoppers what the intent of the three items are. As an example, imagine a beautifully displayed end cap featuring the above mentioned organic cereal, soy milk, and bananas. Add in a nice sign or banner which might read "Start Your Day with the Right Breakfast". Just that simple sentence can have a major impact on the movement of these items. Even though it may seem obvious that this promotion is all about breakfast foods, by actually putting the word "breakfast" visually in front of your customers, you have made the intent of the display clear and understandable, and therefore easier to shop!
It’s amazing how frequently the television becomes the centerpiece of family and friend gatherings, watching sporting events, movies, etc. The way that this typically impacts grocery sales is that chips and a dip are always an excellent "TV Snack". Taking advantage of this activity (or lack of activity), an easy cross merchandising opportunity is to promote chips and guacamole. This particular feature would actually do best to be located in the produce department. Have a nice end cap display (or free floating display) of avocados, lemons, and tomatoes, surrounded with case stacks of tortilla chips. If you include a nice sign or banner that may read something like "Have a Few Chips with your Guacamole", your promotion will be off and running.
In the end, cross merchandising is much more than rearranging product from one department to another. It’s all about creating a theme - finding and promoting the thread that ties the featured products together. Consider your cross merchandising opportunities; think them through well; and get your entire store onboard and excited about the many combinations that can have a true impact on your overall store sales and presentation.