Regardless of what you attempt in your retail business, you should always be strategic. Want to maximize your sales? Then you need to think strategically. Likewise, if you want to cater to your customers’ needs consistently, you need a detailed plan. We’d take that even further to add this: you need a cross-selling strategy.
What is cross-selling?
According to Shopify, cross-selling is a sales technique used to entice your customers to purchase products over and above the item they had intended to buy when visiting your store. Of course, you must be mindful.
Any products you attempt to cross-sell can’t be random or unrelated to your customers’ initial purchase. For this technique to work effectively, they must be complementary to what’s already in their basket.
Here’s an example to illustrate that further.
Let’s say you’re a general merchandise retailer who has a Computing and Mobile department. When a customer walks in to purchase a cell phone, you won't attempt to sell them an expensive laptop. That wouldn’t make any sense. If you want to increase their basket size, you should rather attempt to sell them insurance, a phone cover or both to protect their new purchase.
It would be the same if you had a Camera department in-store. If you want to increase their basket size naturally, you’d suggest the customer adds a memory card or camera equipment to their initial purchase.
Suffice it to say; that successful cross-selling is all about finding the relevance between your customer’s purchase and other products in your store. Once you do, you can expect an increase in sales and profit.
Why should you be cross-selling in your store?
Whenever any ‘Why’ question comes up, and especially when it comes to new techniques or tools, the easiest way to answer is to present the benefits.
For example, why should you consider category management? It’s because of these benefits. Why should you use retail data to guide your planogram-building efforts? Again, it’s because of these benefits.
It works the same for cross-selling.
There are many reasons why you should implement this technique if you haven’t already done so. It’s also worth pointing out that it is not only for your benefit. Cross-selling benefits your customers too.
Let’s look at how it assists you and other retailers first.
As we noted above, you’ll see an increase in sales and profitability for the category where you’ve implemented this technique. Since you’re offering complementary products, you can also foster and strengthen customer loyalty. Then there is the point that you can increase foot traffic into your store since you’ve built up a reputation as a store that’s convenient and easy to shop.
In essence, what you’re doing is creating a personal selling advantage that you can use to separate yourself from your competition.
As for your customers, you’re giving them the option to find everything they need in one place. You’re also catering to their needs, and set your store up as the go-to place for specific products. More importantly, you’re offering them a shopping experience that they will want to experience again.
Unpacking cross-selling strategies to use in-store
While you may understand cross-selling and know why it’s important, that doesn’t mean much if you don’t know how to implement it strategically in-store.
Below are three strategies that you should consider putting into action. We recommend that you use all three rather than one or the other.
1. Place a salesperson at the end of an aisle
The first cross-selling strategy to consider involves the placing of salespeople at the end of your aisles.
There’s only one reason why you should put them there, and it should be obvious. These salespeople are there to educate any passing customers about a new product to the market or seasonal promotion.
For example, at the end of your Coffee and Tea aisle, you could position a sales rep demonstrating how a coffee machine works or handing out free coffee pod samples. At the same time, they’re explaining the different varieties, and why they’re worth purchasing over another coffee brand.
When done right, this will increase your sales for that product (and category). Also, customers will walk away having had a great brand experience and remember it. They may even tell their friends and family about the brand and that they have to try it.
However, this strategy can also go wrong. Here’s why:
It could be because the salesperson positioned at the end of the aisle isn’t in branded clothing, so customers don't know why they’re there. They could be standing in front of the product, either blocking customers’ view of it or making it difficult to reach.
They might not even be at the stand to explain the product. Or, they could hand out free samples without any explanation about the product and why they’re giving them away.
2. Merchandise complementary products together in-store
The second strategy to put into action in your store is to cross-merchandise your products across a variety of categories.
We have written about cross-merchandising from many different angles, including the reasons why you should be doing it as well as looking at various practical examples of what it looks like in-store.
But that doesn’t mean it’s not worth writing about again. It’s an effective method to increase impulse buys and create awareness around products. For the record, cross-merchandising entails merchandising complementary products from separate categories together to provide the shopper with solutions.
Let’s take Batteries as an example. It’s a product that you can cross-merchandise in multiple areas and with various products such as TV remotes, Toys, and Small Appliances. That means you could place it in many areas and it would still make sense to shoppers.
Thus, implementing such a strategy also makes it easier for your customers to shop at your store since, in this case, they don’t have to go looking for Batteries elsewhere. At the same time, cross-merchandising stretches your trade budget and draws attention to other products throughout your store.
But it can go wrong.
When incorrect products are cross-merchandised, all you are doing is causing confusion, which lays the foundation for a bad shopping experience. Let’s keep the Batteries example. While you might cross-merchandise batteries next to Toys, they might be the wrong size, thus frustrating your customers.
There is also the point that when done wrong, your shelves will look cluttered and untidy. If shoppers don’t know where to find what they need, they could very well decide not to return.
The most important thing to consider about implementing this strategy is that you need to have a plan in the form of a planogram so that all staff from all stores know how, when, and where to implement which cross-merchandising tactics.
3. Create visually appealing displays
Since many of your customers shop with their eyes first, it goes without saying that you need to include visually appealing displays throughout your store. When implemented correctly, you can use them as a psychological tactic to draw your customers into and through your store.
More than that, they can make the whole shopping experience exciting.
For example, you could place a taste-testing box within the Olive Oils section, complete with complimentary pieces of bread, which happen to be from your in-house bakery. This display also happens to be near the entrance of your store to draw your customers in to experience the product.
Then, you could place another visually appealing display within the eyesight of the first to pull them further into your store. Do this enough and you’ll soon see basket sizes increasing as your customers spend more time in your store.
As a bonus, you could also post a sales rep nearby to assist and answer any questions that customers may have when they visit the display.
That said, you do need to be strategic in where you place your displays because it can go wrong.
A mistake would be to place a display in an area that is either too difficult to access or can’t be seen. Likewise, you shouldn’t set such displays too close to each other since that could create unnecessary floor congestion.
And above all, if you create a display, you need to maintain it. There isn’t much worse for your shoppers to see than dirty and broken fixtures, a half-empty display, or a promotion with improper or no branding.
If you’re looking for further tips and tricks to create a visually appealing display, this piece is worth reading.
Conclusion
If you want to implement any of the above cross-selling strategies, you first need data-driven planograms so that your staff across all of your stores know how, when, and where to implement which cross-merchandising tactics.
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