Is Cross Merchandising Essential for Grocery Retail, and What Should be Considered for Better Execution?

What is Cross Merchandising?

The evolution of technology may be carrying retail into the virtual world, but it doesn’t mean goodbye to brick-and-mortar stores. Digital and conventional channels always create better experiences when they work in collaboration, and in retail, the same rules apply. There are many areas where classic retailing and e-commerce help each other, and the best example is cross-merchandising. In this blog, we’ll explore cross-merchandising and how it has become essential for the retail industry.

Cross Merchandising in Retail: What It Is and How It Works

The purpose of cross-merchandising is to enable the customer to purchase different products that complement each other, in other words, that can be used together. For example, having snacks near the alcohol aisle is one of the strategies used to increase cross-selling. A similar situation is also valid for YouTube videos. Relevant content you watch will appear under the heading of recommendations later on. In short, the definition of cross-merchandising is to combine products that can complement each other in a way that captures the customer's attention.

Although cross-merchandising has been around for decades, it has become even more popular recently, thanks to new solutions that enable reporting of physical store operations and bringing our store analytics backed by real-time data.

Why Cross Merchandising Is Essential for Retail

Cross merchandising can create wonders in online shopping. McKinsey’s report on targeted online shopping reveals that cross-selling can increase sales by 20% and profits by 30%. 

Although we’re talking about physical store shopping, and personalized shopping may not be something that retailers can place on the shelves, it’s still possible on a scale of masses. Yes, it’s not personalized, but almost everybody links their memories to perfectly placed products that tell a story, and it should be considered that the element of impulse shopping is always there. When done right, cross-shopping may be the future of retail shopping that creates convenience and better shopping experiences for the customer. 

Who Uses Cross Merchandising?

Cross-selling is possible wherever there is a shelf, whether digital or virtual. Retail stores of all types can use cross-merchandising to offer customers better recommendations and bundled sales, which automatically increases sales.

If you’re a frequent supermarket shopper, you must have seen great examples of cross-selling between shelves. Small and easy-to-forget items like soft drinks such as sodas and impulsive items like gums and lighters are always placed through the cashpoint to give customers the idea of last-minute purchases. Cross-merchandising creates miracles when done between the shelves. Placing dental products on chocolate shelves or air fresheners on the fish aisle may not come to mind, but they perfectly correlate in a customer's mind. 

Image source: ICSC

Target is one of the first brands to come to mind when it comes to cross-selling. Above, you can see swimming diapers perfectly placed in the sunscreen display, reminding customers of something they tend to forget.

The ideas are infinite, and this strategy can be implemented to every kind of product on the shelf—the limit is your imagination. Let’s look at some outstanding cross-merchandising examples and ideas.

Cross Merchandising Ideas, Examples, Use Cases

We mentioned that cross-merchandising is a win-win situation for both customers and sellers. It eases the customer's buying process while increasing revenues—but that’s not all of the perks of cross-selling. Here are some great cross-merchandising ideas that transform the retail experience.

Faster & Efficient Shopping for Customers

With related products placed together, shoppers can save time as they can find what they are looking for easily. The element of convenience also works in marketing new products and brands to reach a broader audience. For example, placing a new chocolate brand on the coffee aisle is never a bad idea.

With new-age solutions, retailers and CPG companies even track the performance of their promotional campaigns to create proven-to-work campaigns in the future. Vispera offers an end-to-end retail execution solution that seamlessly works with visual shelf data to bring out valuable insights. With Vispera’s Promotion & Launch Tracking solution, you can watch the whole campaign process from the beginning to the end to take quick actions and get even readier for the next one. See how Vispera handles promotion & launch tracking here.

Image source: Twimg

Themes That Make Sense

Thematic cross merchandising is a form of merchandising that uses themes to create thematic displays. It is used in retail stores and supermarkets to encourage customers to buy more products than they might buy if they were just looking for one thing. In the past, retailers would create displays of products that were related to the holiday season. But today, a theme is enough to explore new ideas.

Seasonal shopping is one of the main elements of retail stores and cross-merchandising works like miracles in holidays and other themes. You can create special themes for holiday gift ideas to save customers time and effort easily to promote special offers. For example, creating Valentine’s Day booth doesn’t have to be all about love and hearts, chocolate, and teddy bears; regular, daily products are always needed, and placing them on thematic shelves would be a good reminder—maybe add a couple of your overstocked merlot here and there, too. Or let’s think about summertime shopping. Sunscreen is always essential—why not place them between summer clothing?

A Storyline Always Works

Reminding customers of their daily routines via cross-selling has always been a good idea. Placing dishwashers near cutlery, dental products near candy, and chocolate near menstrual products are the first ones to come to mind. But with today’s technology, it’s also possible to know what goes best with what; thanks to store analytics.

Analyze Customer Behavior to Create Breakthrough Cross-Merchandising Patterns

Cross-merchandising ideas are limitless, but they need to be backed by facts. Tracking which products customers buy together is the best way to analyze the customer's purchasing behavior, but it has always been a challenging process. Fortunately, AI is finally making its way into brick-and-mortar stores to streamline retail execution with visual intelligence.

With visual intelligence, stores can track what happens on the shelves and displays continuously, and the best part is it works more efficiently and accurately than the old methods. Knowing the shopping behavior of customers gives stores the most valuable insights into increasing sales and reaching higher KPIs. 

Visual Merchandising with Visual Intelligence

Visual merchandising is one of the most important aspects of retail management, as it can influence customer traffic, conversion rates and even their purchasing decisions.

Data analytics, backed by visual intelligence is the most reasonable and reachable way to analyze what the customers want and how they react to different displays. Even though artificial intelligence has been used in many fields for decades, it was only recently that we have seen an increase in its application within retail management, and at Vispera, we’re here to implement the technology easier than ever. Here are the top features of visual intelligence that are transforming retail:

Retail Execution Meets AI

Our main goal while developing Vispera was to make retail execution accessible to all retailers and CPGs, and we created cutting-edge solutions that help them leverage the perks of AI effortlessly. With image recognition technology, Vispera covers the whole store to create real-time analysis and end-to-end retail execution without as less workforce as possible. 

Data-Backed Shelf Execution

In-store solutions that take advantage of visual intelligence let retailers collect and analyze data to seek new opportunities and have data-backed insights. Vispera uses artificial intelligence and visual analytics to let retailers have an eye that evaluates real-time data to understand shelf availability, create data-backed promotions, and even know their places among competitors.

Better Shopping Experience for Customers

Knowing the in-store behaviors of shoppers lets store managers create better shopping experiences while increasing sales with cross-merchandising. Vispera’s AI converts the visual data from the shelves into actionable insights that let stores reach their potential. With Vispera’s long-term analytics capabilities, you can design your new revenue spot in your stores.

Meet Vispera’s Visual Intelligence Solutions

Shelfsight, Vispera’s autonomous in-store solution that uses shelf top fixed-cameras to track shelf activity and feed the AI with continuous image data in order to get real-time insights from the store. 

Storesense, on the other hand, takes advantage of mobile devices to increase productivity, and team performance, self-audit, and track KPIs while reaching all retail channels with the power of image recognition and AI. In the end, you can leverage the analyzed data from Vispera to not only create perfect cross-merchandising ideas but also increase store profitability with end-to-end retail execution.