A little while ago I posted about secondary locations: placing your product in an additional location (incremental to the home shelf) to drive incremental purchase. The post generated a lot of feedback about cross merchandising and a number of questions about how to decide when and what to cross merchandise. In this post I’ll discuss the single biggest error that brands make when planning cross merchandising, and share some simple guidelines about how to get it right.
The purpose of cross merchandising
Cross merchandising is the practice of displaying products from different categories together, in order to generate additional revenue. Brands love cross merchandising, based on the simple idea that having more locations in a store increases the chances of a sale. Retailers are often less keen, as cross merchandising brings with it a host of problems and issues which can have severe negative implications on a business (including an increase in out of stocks). But, if managed correctly, cross merchandising can indeed bring significant sales benefits to both parties.
The biggest error made in cross merchandising – shoppers, not consumers!
The biggest, most consistent error made in cross-merchandising is assuming that just because two products are consumed together, then merchandising them together will lead to increased sales. While this is an assumption I’ve seen in countless research presentations and shopper marketing plans, it doesn’t always stack up.
It brings to mind an example where I was sitting in on a research presentation with a client. The agency pointed out that the client’s product (milk) was often consumed with bread, so that perhaps they should push distribution into bakeries. Quick as a flash, the client quipped: “there’s always a table and a chair at the point of consumption too: maybe we should distribute in furniture stores!” I wish I had said that!
Or let’s consider a cup of tea. I always add milk to my tea, but merchandising tea bags and milk together would never work. Why? They share a consumption occasion, after all! The reason is simple (and this is why we need shopper marketing). Merchandising tea bags and milk together may reflect my consumption, but it does NOT reflect my shopper mission.
My shopper mission isn’t to purchase items to make a cup of tea. My mission might be to pick up a pint of milk, or to stock up on tea bags, but it isn’t to make a cup of tea. Unfortunately, this is what often happens when consumer marketers do shopper marketing. When in the store we need to think about shoppers, not consumers.
Effective cross merchandising is built on shopper understanding, not consumer (just) understanding
In my experience cross selling works best when it reflects the shopper mission. To be clear, this often reflects consumption to some degree. This is however logical, as the shopper’s mission isn’t completely divorced from consumption. The perceived consumption need is part of the shopper mission. I buy my tea bags because I want to drink tea in the future, after all!
When does cross-merchandising work best?
Cross merchandising works when it adds value to the shopper. This can be by directly helping a shopper: saving time or reducing frustration, for example. Or it can be by creating an inspiring solution to a consumption need – adding value to consumption helps the shopper meet their mission too.
Cross merchandising often works around one-off occasions: bringing beer and chips together for a sports match: or perhaps a range of barbecue foods at the start of the barbecue season. Both of these examples work a number of levels. Getting beer and chips in one place might save the shopper time (or money), for example. It might make for a better consumption experience too (if the shopper had planned beer but not chips). Or it might save time on a future trip (if the shopper had forgotten about the match). The same works for the barbecue. A shopper who is looking for barbecue food might find a simple way to enhance their barbecue consumption experience. One who is looking for something good to eat at the weekend finds a simple solution to their shopping problem.
Cross merchandising often works if it enhances a consumption occasion. In the photo at the top of this post, lemons are merchandised near seafood. In this store, the first part of the store that is visited is the fruit and vegetable section, so unless lemons were on the shopping list, they might not have been picked up. A shopper with ‘something nice for dinner’ as a shopper mission might arrive in front of the seafood area, and chooses to buy shrimps. And then sees the lemon. Without this merchandising the shopper may leave without a lemon (leading to a poorer consumption occasion) or is forced to return to the fruit and vegetable section (which is a poorer shopping experience).
Cross merchandising excellence is about shopper missions, not just consumption occasions
Cross merchandising isn’t simply about thinking about a consumption occasion and grouping those products together in a store. Cross merchandising works best when it reflects a shopper’s mission, or where they trigger a shopping need there and then in the store. Cross merchandising works by delivering value for the shopper: either directly (saving time, reducing frustration) or indirectly (by creating an enhanced consumption occasion). Understanding consumption isn’t enough to guarantee effective cross-merchandising – we need to get into the shopper’s head too.
If we take consumer marketing thinking and apply it to the world of the shopper, our efforts won’t be as effective. If you want to know more about how to bring shopper thinking into your in-store activities, check out our training programs now, or get in touch for a chat about how we can help