Business Management 101- Retail + Selling Tips- #1

Good day friends,

I decided to kick off my first business post with a skill/selling method I learnt at the age of 10 at my uncle's clothing store. This method is called Cross-Merchandising and is by far one of the best methods to drive increased basket size. This applies to every business owner in the world.

Before we get into Cross-Merchandising I want to touch a bit on increased basket size. What does increased basket size mean? Let’s look at this in the world of a grocery shopper. Think about when you do a grocery shopping trip. Hypothetically, you go to the usual place you shop at and intend to pick up a few essentials for home - bread, milk, juice etc- this is what would have been your usual basket size. However, you somehow end up leaving with way more than you intended to. Your basket had magically gained a chocolate (happens to me every time), batteries, razor blades etc- this can be defined as an increased basket size. The grocery shop owner has somehow managed to place products in key locations that have triggered you to increase your basket size, so instead of spending $10 in the store, your basket had increased to $15. Now if you are a business owner and get 1000 customers into your store a month with an average spend of $10, just by increasing 50% of consumers basket size to $15, this will immediately step change your revenue.

Increased Basket Size is essentially what Cross-Merchandising is about. Enticing/reminding the consumer to purchase the additional product.

The above puts Cross-Merchandising in a retail store context into perspective, but this skill/selling method can be applied across almost everything. I’ll show you what I mean by this in the examples below.

Grocery Retail

Grocery retail probably has the biggest scale for Cross-Merchandising. This is a field I am particularly passionate about and would regard myself as an expert in. In a grocery retail store, Cross-Merchandising is pretty exciting because of the numerous opportunities you have to increase a consumer's basket size! Listed below are just a few of many examples that can be accomplished in a retail grocery store that will step change your revenue.

Bread: Amongst the biggest essential product purchased today is bread. I’ve seen some great cross merchandising done in stores where there’s peanut butter, cheese, jam and chocolate spreads placed strategically next to the bread baskets in store.

Nappies/Diapers: Every store owner knows that if you want bigger baskets to leave your store you need a mum that buys diapers. With diapers you can do Cross-Merchandising on Baby Wipes, Baby accessories, Baby formula, Baby meds, Baby toothbrushes- a great category to get creative.

Potato Chips- This category sells superb amount of volume regularly and a great example of Cross-Merchandising would be to provide the dips next to the chips. It's as simple as that :)

These are just a few examples of many one can implement to achieve greater basket spend in a store.

What grocery Cross-Merchandising examples can you think of?

Below are some pictures on grocery Cross-Merchandising

A good example of Chest Rub for babies next to nappies/diapers.

Pet Toys with Pet food :)

Batteries with Shavers.

Baby Wipes racks with nappies/diapers

Lice comb next to shampoo, this is brilliant, so smart!

Clothing Retail

This is where I learnt my trade in cross merchandising. It simply requires you to merchandise your suits with shirts, your shirts with ties, your shoes with socks, you name it.

As long as i have my suit and tie ;-)

Shoes and socks!

Insurance

After all the info given above, you’re thinking how does insurance fit into all of this? Well it’s simple really, let’s take the example of health insurance, a medical aid plan if you will. The company has sold you the plan and now they have extensions to the plan that require a further fee from you. Discovery health in SA utilises this quite brilliantly. They have a vitality option on the plan that rewards an active and healthy lifestyle, with travel discounts, flight discounts, grocery discounts and many more. While you have bought into this, the healthier you are, the less likely the insurance company would have to pay for anything medical related.

What about car insurance? Well you can simply sell car insurance and advertise a tracking device to go along with it!

Like I said, Cross-Merchandising can be implemented in anything!

While there are great examples of Cross-Merchandising, there are horrific ones as well. Below are some pictures on poor Cross-Merchandising that is a complete waste of space.

Car toys with washing powder - really.

Eye medicine with diapers. Why???

Okay so now I’ve mentioned yet a few examples, there are still many more. Take the car industry, where you can sell a BMW and offer service plans, sell accessories, advanced driving courses with it… okay okay I think you get the picture and if I carry on any longer I’m afraid the read will become an hour long.

Let me know what you think and if you have any creative Cross-Merchandising examples or ideas-I’d love to engage on this topic!

Keep a look out for my future business management posts! If you liked this post and want to learn more upvote and follow me.

Until next time-Happy Selling