Cross merchandising is a successful method of selling, but retailers need to plan and get creative.
This visual merchandising strategy consists of placing complementary products in close proximity within the deli.
It is an effective approach. According to McKinsey & Co., cross-selling can increase sales by 20% and profits by 30%.
Cross merchandising is important for both the customer experience and increasing sales.
“Cross merchandising is typically used to make the shopping experience more convenient in addition to promoting complementary foods,” says Patty Amato, retail sales director, Patriot Pickle Inc., Wayne, NJ.
The Importance
Cross merchandising works best when the retailer and supplier work together to achieve the same objectives.
“One example would be to provide simple, creative and quite possibly unique pairings of products to fit the consumer demand,” says Tom Orlando, national sales director, Conroy Foods, Pittsburgh, PA. “Transparency and sharing of information are a practice that can benefit both manufacturers and retailers.”
He adds that retailers that share promotional plans for the deli department with manufacturers that don’t directly compete with the promoted products better equips manufacturers to pair their product for a great selling opportunity.
“For example, if a retailer was planning on promoting their naan breads or pizza dough (shells) then we could cross merchandise our white pizza sauces; the consumer wins by presenting such a natural pairing,” Orlando says.
Because Conroy Foods’ condiments are a natural item to pair with lunchmeat and other deli items, the deli department has been a treasure trove of cross merchandising possibilities.
“One challenge is where the product is merchandised,” Orlando says. “If a store is crowded with products then your product could be lost to the traffic pattern in the sense of being far away from impulse purchases.”
This is why a balance is needed with these programs.
“Upselling is the obvious thing, and the checkout counter can be used as an example of this,” says Kali Kinzinger, associate product manager, Placon, Madison, WI. “Delis can do the same thing with fresh foods, placing hummus containers by the olives and pita bread to make it easier for people to get what they need.”
This also inspires shoppers to get creative as well as encourages impulse purchases.
“Retailers can use deli cups for small amounts of items people may not think of putting together, which encourages people to pick up things not on their grocery list,” Kinzinger explains. “We’re definitely seeing an increase of online ordering and pickup, which is where retailers are missing the opportunity to cross merchandise and cross sell.”
With the current labor and supply issues, along with inflation, consumers are scaling back restaurant visits. This provides delis with even more opportunities to create meal solutions.
“With costs through the roof, consumers are making active decisions and trading down [their purchases],” says Carl Cappelli, senior vice president of sales and development, Don’s Prepared Foods, Schwenksville, PA. “Instead of purchasing a seafood salad, they will go with a less costly potato salad. Cross merchandising gets more dollars into retail and satisfies consumer needs.”
Deli departments also have an opportunity to mimic restaurants by offering combo meal deals.
“Soup, sandwiches and salads are very natural combinations, and this can be accomplished with CPG,” says Bob Sewall, vice president of sales and marketing, Blount Fine Foods, Fall River, MA. “Deals such as a purchase of a sandwich or salad with an 8-ounce cup of hot soup for 99 cents raises the check averages and introduces other facets of the deli to consumers.”
Proper Pairings
With the deli encompassing a wide variety of product categories, there are endless cross merchandising opportunities for this department.
“Crackers, flatbreads, cheeses, spreads and soup can all be cross merchandised,” James Anderko, vice president of sales and marketing, Venus Wafers, Hingham, MA. “Also, with the popularity of meat and cheese boards, this merchandising method is almost essential.”
He notes that many delis have shelving above and below the full-service case, which offers additional opportunities.
“Many delis do this effectively,” Anderko says. “One of our retail clients has a basket display of flatbreads next to the soup, which draws attention to the area.”
Incorporating products that can be cross merchandised in multiple ways gets better mileage overall for all complementary products.
“The more diverse a product is in usage applications, the better,” Conroy Foods’ Orlando says. “For example, a number of our products have multiple uses; the Pineapple Honey Mustard in addition to a great condiment with ham also makes for a great dip for soft pretzels. Although we have many great flavors within our Beano’s Deli Condiment line, we always want our products to compliment the sandwich, snack or meal it is being paired with. We want to enhance the consumer experience.”
Blount Fine Foods offers a line of Cheese Crisps designed to be paired with the company’s soup lines.
“Everyone likes value today, when our dollars are stretched thin,” Sewall notes. “It’s absolutely necessary to pair products, and for those delis with seating, it’s a great time to engage people to sit down and eat on site.”
Placon’s Kinzinger has seen its Refresh packaging line of tamper evident packaging being incorporated in more deli grab-and-go cross merchandising programs.
“These offer different depths and sizes, so departments can add sauces, toppings or smaller amounts of ingredients to support bigger items,” Kinzinger explains. “Delis also can create kits as a way to bring shelved items into the deli, which eliminates traffic in the grocery aisles.”
When paired with another ingredient, Tillamook cheese can enhance a product.
“That new dimension can be enhanced by the taste, texture or scent,” says Christina Bruce, Tillamook, OR-based Tillamook’s sales director, specialized retail channels. “We often pair with crackers and chips (texture and crunch), almonds and other nuts (saltiness) and sauces.”
According to Amato, the best pairings for fresh pickles are lunch meats, sandwiches, burgers, hot dogs, salads, macaroni and cheese, and cheeseboard items.
Display Tactics
Creative displays are necessary to support cross merchandising and help spur sales.
“If stores want to include bakery items into the deli for impulse buys, baskets of rolls can be sold by the chili for 99 cents apiece,” Blount Fine Foods’ Sewall says. “If running a deal on hot items, it’s important to make sure the containers are kept full; there’s nothing more disappointing than if the kettles aren’t full or the rolls are sold out during the lunch rush.”
One of the display challenges in cross merchandising is finding a dedicated space that works for perishable and non-perishable items.
“A retailer can help circumvent this issue by having dedicated open cooler spaces around the perimeter that are seasonal/occasion based,” says Tillamook’s Bruce.
Including signage to make customers aware of product pairings, any hot deals or meal opportunities is key. Proximity also is a top consideration when cross merchandising.
“It’s a lot harder to take advantage of complementary products if the items are not located in adjacent displays,” Sewall says.
Visibility is another vital aspect for cross merchandising programs.
“Shelves above deli cases that contain perishables like cheese and hummus are very effective for cross merchandising crackers,” Venus Wafers’ Anderko says. “Our water cracker packaging has photos of different topping possibilities.”
Orlando at Conroy Foods notes delis should expand the pairings paradigm and stretch preferences when thinking about creative cross merchandising opportunities.
“For example, having our Beano’s Honey Mustard on display by the prepared food or frozen chicken nuggets and a display of Beano’s Horseradish sauce by the meat case when beef is on sale,” he says. “Shelf-stable condiments are able to be placed anywhere in the store.”
Delis’ biggest challenge is being known as more than a place with just meats and cheeses. Cross merchandising with items from other departments as well as the grocery aisle creates a one-stop shop for rushed consumers.
“Customers can see a difference in stores with customizable or seasonal displays,” Placon’s Kinzinger says. “It is more advantageous for stores having stands with chips, mixings and other items to give customers ideas for parties or dinner.”
Delis can create cross merchandising opportunities for tailgate items or back to school as well as specific holidays.
“By having kits already available, customers don’t have to go all over the store to find what they need or try to create pairings on their own,” Kinzinger says. “Having these displays is a great way to upsell and be more creative.”
Thinking outside the box can pay off big when cross merchandising.
“Buying in bulk allows for more creativity in conjunction with a retailer’s commissary or foodservice operation for pairing products,” Don’s Prepared Foods’ Cappelli says. “Everything we make in bulk, delis can assemble in their commissary. We also offer nine traditional salads like seafood, shrimp and buffalo chicken in 10-ounce cups for grab-and-go refrigerated cases.”
Don’s Prepared Foods introduced five clean sides in 2019, five in 2020 and bowl concepts in 2021.
“The average retailer has five to 16 linear feeds with bowls,” Cappelli notes. “This is a meal concept with protein and carbs that was introduced in bulk to be sold by the pound. Retailers can pair these with bread or a green salad by grouping the items and adding signage.”
The company also offers five indulgent and five clean dips that can be sold adjacent to crackers, breads, chips and other complementary items to provide a snack solution.
“The best display tactic with cross merchandising is figuring out what items are purchased together to help generate more sales while improving the customer experience by saving time,” Amato says.
Manufacturer Support
Manufacturers provide cross merchandising support to assist delis in putting their best foot forward for added register rings.
Venus Wafters provides various displays and can create point of purchase (POP) materials as well as promotional activities that tie in with complementary products.
“The challenge is if there are two different companies involved in one promotion,” Anderko says. “But most of the time, this can be worked out. We’ve found that tags that show a discount for pairing items is more effective.”
Don’s Prepared Foods can provide recipe ideas, assisting retailers in developing meal and snacking solutions.
“We’ve found most retailers are experts in cross merchandising,” Cappelli says. “They will assemble kits in commissaries with meat and sides in a clamshell with multiple compartments, for example.”
All of Conroy Foods’ products are packaged in convenient shelf-ready packing.
“Our packaging is convenient for the consumer to enjoy anywhere—at a picnic, dinner table, tailgate events, etc.,” Orlando says. “By offering the consumer a few more twists to the regular condiments with flavored mustards to developing innovative unique flavors that are exclusive to their program creates an innovative piece to differentiate deli offerings.”
Conroy Foods has developed a Deli Condiment Shipper Program, which features seasonal display cards to customize and capture the deli or seasonal theme that the retailer is targeting.
“We have six header cards depicting seasonal themes, and all of these headers are interchangeable on the shipper base,” Orlando says. “Depending upon the holiday or event, we have a themed header card and the product mix to match. For example, our Summer Sizzle shipper features four flavors that all have a little heat and add a little sizzle to a sandwich.”
Because every retailer and program is different, Blount Fine Foods tailors its support to each store.
“As part of our program, we may support the cost of reducing hot soup to 99 cents with an ad for the item,” Sewall says.
Tillamook believes in a full funnel/integrated approach when it comes to marketing.
“That includes driving awareness through social media influencers and brand partnerships all the way down to marketing tactics at the retailer such as demos, TPRs, weekly promotions and shopper coupons,” Bruce says.
Tillamook’s Farmers Collection Deli Cheese line, launched in 2021, leverages the side of the package to call out recommended pairing options from the company’s R&D and Sensory team.
“For example, with our Hickory Smoked Cheddar we recommend pairing with red ale, green apples or pickled vegetables,” Bruce says.
When successfully executed, cross merchandising can increase register rings and improve the customer experience. But because stores and demographics differ, it may require trial and error to find the best formula. It is worth the extra effort in the long run. DB
