Business Intelligence and FMCG Glossary: #crossmerchandising

Cross Merchandising

What is cross merchandising?

Cross merchandising is a product store implantation technique consisting in placing products of different categories side by side.

The objective is to increase shopping opportunities and thus the sales of complementary products to increase the shopping basket, for example placing spaghetti drainers in the aisle of pastas and sauces.

Spaghetti is a product that generally belongs to the “destination” category while drainers are not frequently purchased items and are considered a “convenience” product.

The sale of spaghetti, however, can boost drainer sales in two situations: the shopper remembers that he does not have a drainer or decides to renew it.

That is, there is a high probability that this proximity and convenience translates into an impulse purchase as it boosts awareness and saves time in store for the shopper. Even if the purchase intention did not exist, it is so possible that the drainer ends up in the cart.

While in FMCG stores the phenomenon is relatively contained, some chains such as IKEA, have made cross merchandising a true strategy implemented on a large scale. The shopper does not visit IKEA to buy groceries but placing jam pots in the tableware department participates in the filling-up of the famous “yellow bag” with unplanned purchases, this increasing the amount of the average basket in a vertiginous way.

Types and examples of cross merchandising

There are several ways to implement cross merchandising depending on the defined objectives.

Options that fit the customer’s purchasing mission:

If you buys pizza base, you will probably need among other ingredients cheese, sauce, olives, etc. If everything is at hand near the dough, it will be of great help and generate additional purchases.

Products aligned with the customer profile:

What do diapers have to do with beers? In the US, a large retailer realized that the majority of diaper shoppers were men. They went out at night to buy the product and it wasn’t the only thing they took back home as many used the opportunity to buy cans of beer. When such products were intentionally placed side by side, sales skyrocketed.

Products associated with experiences or season:

From ordinary situations, such as a Sunday lunch, to seasonal occasions such as summer or Christmas, everything is a great opportunity to practice cross merchandising. In summer backpacks, beach chairs, quick snacks, insecticide, sunscreen, games, sandals are all articles of different categories that can be implanted in the same physical universe.