🎓 Definition
Is a calculation that identifies, for a specific category, Brand, or product, what are the most often products purchased at the same time by shoppers. This information is useful to optimize layout through category adjacencies as well as joined product displays – in promotion or not.
🧪 Example of Cross-Merchandising
The Retailer Operation Team might display, based on their experience and data, some products together in various ways:
- Tortilla chips and salsa in close proximity to each other, suggesting that customers purchase both items together for a complete snacking experience.
- TV with a soundbar or surround sound system, encouraging customers to purchase all of the items together for a complete home entertainment setup.
- Operation Team might create a display featuring a mannequin wearing a complete outfit, including shoes, accessories, and a purse, encouraging customers to purchase all of the items together to achieve the same look.
❓What is Cross-Merchandising used for
Cross-merchandising can encourage Customers to make additional purchases by suggesting complementary products that they may not have otherwise considered. By creating displays and promotions that showcase complementary products, Retailers can increase sales and Basket Value.
Optimizing product mix by identifying complementary products that customers are interested in. By analyzing sales data and Customer behavior, Retailers can identify which products are frequently purchased together, adjust their product mix accordingly and reinforce their Trade Across Strategy.
Encouraging customers to purchase complementary products, and cross-merchandising can help retailers improve profitability by increasing the value of each transaction and reducing the cost of acquiring New Customer.
Overall, cross-merchandising can be an effective way for retailers to increase sales, improve the customer experience, optimize their product mix, reduce Churn rate, and boost profitability. By leveraging the power of complementary products, Retailers can create compelling displays and promotions that drive sales and enhance the customer experience.
How is the data for identifying frequently purchased complementary products collected and analyzed?
Data for identifying frequently purchased complementary products is typically collected through sales records, customer purchase histories, and sometimes through the use of advanced analytics and machine learning algorithms. Retailers may utilize Point-of-Sale (POS) systems to track which items are frequently bought together during transactions. Additionally, some retailers employ customer loyalty programs that capture detailed purchase data to better understand buying patterns and preferences. Once the data is collected, it is analyzed to identify trends and patterns, helping retailers determine which products are often purchased together and should be cross-merchandised.
Are there any potential challenges or drawbacks to implementing cross-merchandising strategies?
While cross-merchandising can be a valuable strategy for increasing sales and enhancing the customer experience, there are potential challenges and drawbacks to consider. One challenge is managing inventory effectively to ensure that complementary products are always available when cross-merchandised together. Another potential issue is customer confusion if the merchandising displays are not clear or intuitive. Additionally, overcomplicating store layouts with too many cross-merchandising displays can overwhelm customers and make shopping more difficult. Retailers must also be cautious not to force unrelated products together in a way that feels unnatural or irrelevant to the customer.
What are some best practices for effectively implementing cross-merchandising in retail stores?
To effectively implement cross-merchandising in retail stores, retailers should start by analyzing their sales data and customer behavior to identify which products are frequently purchased together. Once complementary products are identified, retailers can create cohesive and visually appealing displays that clearly showcase the relationship between the products. It's essential to place complementary products in close proximity to each other to make it convenient for customers to purchase them together. Retailers should also regularly update their cross-merchandising displays to keep them fresh and engaging for customers. Additionally, clear signage and product information can help educate customers about the benefits of purchasing complementary products together, enhancing their shopping experience and encouraging additional purchases.
🖥️ Make it happen in Ariane
How to access Cross-merchandising using Ariane Category Management Solutions
Step 1: Select Supplier Cross-merchandising Menu from the Shoppers Menu Bar.
Step 2: Select Option in the Filter Menu and choose the period and hierarchy level to display.
Here you are.
