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Sep 01, 2007

Customer Shopping Tip of the Month: Cross-Merchandising: A Creative Way to Generate Sales

PrintCustomer Shopping Tip of the Month: Cross-Merchandising: A Creative Way to Generate Sales  

By Dr. Kenneth C. Herbst and Harold Lloyd

In our August column, we revealed the strong relationship between shopping list usage and spending. Data from our second annual supermarket shopper traffic study indicate that customers who shop with a list spend 41 percent more than those who simply “wing it.” In this September tip, we will usher in the fall with a tip we hope leads to increased sales for you as well.

While traveling our great nation, I often prioritize visits to supermarkets near my hotel in an effort to see who is doing what and how. Although I often see cross-merchandising practices in the stores I visit, I think there is room for much more of this creative display of products.

Our society is time-starved in an unprecedented way. Customers arrive at the store seeking a quick and easy trip. By cross-merchandising, you set up a win for you and the customer. As I pointed out in an earlier tip, store managers need to think like customers. By cross-merchandising, you can plan meals that can be grabbed quickly and easily. You can also build levels of incremental profit if consumers buy accessory items which they may not have purchased if all of the items had been merchandised separately.

When you talk to customers, it is quite apparent. They bought the whipped topping and sponge cake because both were displayed next to the fresh and juicy strawberries (which were buy-one-get-one-free). You saved time for the customer, the customer quickly grabbed dessert, and you sold three items instead of just one (the discounted strawberries).

The importance of this practice cannot be overstated. With one of the retailers with whom we have worked, cross-merchandising seems to be the rule rather than the exception. Everything from soup to nuts is cross-merchandised, which stimulates the customer’s mind in terms of what is possible; makes your store a shopping experience rather than a buying chore; and helps build sales volume for accessory items that, when merchandised alone, do not move at nearly the same clip as when cross-merchandised.

We suggest practicing this merchandising technique as often as possible. Examples include having preserves and peanut butter displayed in the middle of the bread aisle, moving a creamer cooler to the coffee aisle, adding a hanging basket of chocolate syrup near the ice cream section, or a box of microwaveable bacon and bread near the fresh tomatoes and lettuce. I have also recently seen (and tasted) a scintillating combination of a pinot noir, gourmet cheese, and wheat crackers. If I continue, my mouth will salivate beyond control, and I am sure you get the point.

Often, store managers mention that these types of displays of multiple items are not possible because electrical outlets would be needed in aisles in which there is currently not a way, for instance, to keep the creamer cold in the coffee aisle. It is not easy, it requires change and, at times, a minimal expense. Change is often unpopular because it means conducting business in a different manner.

We suggest dedicating 10 minutes at each department manager’s meeting to focus not only on which items to cross-merchandise but how to do it well. We encourage a minimum of 10 bold cross-merchandising displays throughout the store. At least two departments should be represented on each display, and it should be up for no fewer than seven but no more than 14 days. Attach three helium balloons to the display to draw attention. To increase employee involvement and interest, turn the cross-merchandising into a fun contest between departments to determine the most creative cross-merchandisers. We think your customers will reward your creativity and innovation.

Our shopper traffic research will unveil some quick and manageable tactics which could have a profound impact on your top line as well as customer satisfaction and loyalty. For more information on how to purchase our in-store research or on how I can cater our research to meet your specific needs, please e-mail me at Kenny.Herbst@mba.wfu.edu. Alternatively, feel free to visit my Wake Forest University profile page at www.mba.wfu.edu/herbst (on this site, click “website” to visit my personal Webspace). I can also be reached via phone at 336-758-4215. I look forward to speaking with you about potential research that will fit your needs.

Dr. Kenneth C. Herbst is an Assistant Professor of Marketing in the Babcock Graduate School of Management at Wake Forest University in Winston-Salem, North Carolina. He earned a Masters and Ph.D. from The University of North Carolina at Chapel Hill. In addition, Dr. Herbst earned a B.A. from Wake Forest University.

Dr. Herbst has been interviewed about his food research and industry expertise by, among others, The New York Times, The Wall Street Journal, The Philadelphia Inquirer, the Washington Post, the Chicago Tribune, the Ottawa Citizen, the Montreal Gazette, the San Francisco Chronicle, USA Today, and Woman’s Day. In July, he gave a keynote presentation on his in-store food shopper research at Shopper Insights in Action.

Harold Lloyd was the President and CEO of a 14-unit retail organization for 10 years. His practical, exciting ideas and dynamic presentation style have combined to earn him a highly regarded reputation reflected in his top ratings at numerous appearances at such prestigious events as the annual FMI and IDDBA conventions.

For almost two decades, Harold has worked very closely with small and large businesses to provide a “powerful push in the right direction!” His mission is to provide qualified, executive-level assistance to companies on a “temporary basis,” eliminating the need to add permanent top management overhead. To further assist his clients, Harold authored the book It’s About Time, focusing on time management.







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