Keith Loria
Smart approaches to improve profitability and customer satisfaction.
Cross-merchandising leverages the natural connections between products, offering customers an engaging shopping experience that can lead to higher sales and stronger customer loyalty.
This is particularly true for items traditionally sold in the deli, which pair well with a multitude of items throughout the supermarket.
“By creatively pairing deli products with complementary items from other departments, supermarkets can encourage customers to explore new culinary combinations and create complete meals with ease,” says Bob Sewall, chief customer officer for Fall River, MA-based Blount Fine Foods. “This method of merchandising not only increases impulse purchases but also helps highlight the versatility and quality of deli offerings.”
Patty Amato, retail sales director of Patriot Pickle, Wayne, NJ, notes cross-merchandising is typically used to make the shopping experience more convenient in addition to promoting complementary foods, so it’s a no-brainer for stores to work with companies on matching up items from the deli and other departments.
“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,” she says. “For instance, the best pairings for fresh pickles are lunch meats, sandwiches, burgers, hot dogs, salads, macaroni and cheese, and cheeseboard items.”
Tony Payne, foodservice sales director for Sioux Honey Co-op in Sioux City, IA, notes depending on the retailer and deli offerings, you may find Sue Bee Honey offered to sweeten toast and biscuits, grapefruit, oatmeal or in your coffee and tea, or when behind the counter, it is often used as a marinade, glaze, ingredient in many recipes or cocktails.
“Cross-merchandising increases usage and introduces the buyer to new ways of using honey and if used thoughtfully, it makes the shopping experience more enjoyable by showing customers different purchase ideas,” he says. “Honey pairs well with cheese, making it perfect for charcuterie trays, and one of the hottest trends in the marketplace is hot honey on pizza.”
So, if a consumer is a loyal Sue Bee Honey buyer and goes to the deli aisle and sees Sue Bee Hot Honey available there, or near the frozen pizza, they might decide to try that item as well adding another product to their cart.
Venus Wafers has a lot of items in the supermarket deli and looks to set up partnerships with cheese, meat and spread companies to make sure the crackers are included when they are doing events and promotions in-store.
“The consumer is always interested in various ways to use the product and wants ideas, so cross-merchandising makes perfect sense,” says James R. Anderko, vice president of sales and marketing for the Hingham, MA-based company. “By having it with other items, you can see incremental sales of the product because it’s bringing more awareness to your products.”
Blount Fine Foods has a portfolio of soups and salads that have seen increased sales when grocery stores cross-merchandise with bakery items.
“Not every retailer can do it, but we work with a lot of stores who can merchandise our soups with bread, rolls and bread bowls,” says Sewall. “The most important thing when cross-merchandising is to have complementary products together, so the customer has an impulse buy.”
Mifroma USA, Stamford, CT, has several items that have found success being cross-merchandised in the grocery store, including its Le Gruyère AOP and Raclette.
“Gruyère is a great item to cross merchandise with produce as the cheese pairs well with a variety of fruits,” says Isabelle Schilt, key account manager for the New York-based company. “Gruyère can also be displayed out of refrigeration for periods of time, allowing retailers to place displays in the produce department or on a butcher block in the deli area with various jams, spreads, and crackers accompanying the display.”
Additionally, she notes, Raclette is a fantastic melting cheese that pairs well with meats. Since Mifroma offers Raclette in convenient pre-sliced packages, it makes for the perfect item to display in the meat case next to fresh burger patties.
“Cross-merchandising is an important marketing strategy because it helps draw attention to the products and educate consumers on how best to use or pair the items,” says Schilt. “By presenting consumers with meal and pairing suggestions through cross-merchandised displays, retailers can increase turns and basket sales.”
Adam Michaels, chairman and chief executive at Mama’s Creations, East Rutherford, NJ, a manufacturer of fresh deli-prepared foods found in more than 8,400 stores, understands that cross-merchandising allows consumers to build a bigger basket, with both the company and the retailer by creating additional points of interruption in the store.
“This gives consumers new places to find our brand, as well as helps them save time and effort in meal planning through the cross-merchandising of complementary items,” he says. “Our core items, such as our beef and poultry, are found in both the deli and fresh meat sections of the store.”
Mama’s Creations, Michaels shares, is a “one-stop-shop” provider of a wide variety of prepared foods, which allows the company to deliver on the needs of all consumers, at the right time, for the right occasion.
“Personally, I love to pair our proteins, such as our Italian Herb Grilled Chicken with our Mediterranean Faro or Persian Rice,” he says. “Our popular Mama Mancini’s meatballs in sauce are most often prepared as a spaghetti and meatball dinner or made into a meatball parmesan sub.”
SHOWCASING PRODUCTS
Cross-merchandising should inspire consumers. The goal is to display items together to spark ideas and a desire to try new things.
“This can be accomplished through traditional and out-of-the-box pairings combined with proper signage highlighting the product attributes and driving consumers to discover new methods of serving the items through QR codes listed on the signage,” says Schilt.
Plus, displaying products from different categories will encourage customers to add more products to their cart and make complementary purchases.
“Cross-merchandising takes careful planning to find complementary pairings that work well together and are easily adopted,” says Sioux Honey’s Payne.
Venus Wafers knows that highlighting its products is an important key to the success of cross-merchandising its wafers.
“We use a lot of displays or shipper units, especially during the holiday season, which is a big help for cross-merchandising our products,” says Anderko.
STRONG PARTNERSHIPS
Supermarket managers play a crucial role in ensuring successful implementation and execution of cross-merchandising strategies.
“Working closely with department managers is essential,” says Payne. “The managers need to see the value in pairing complementary items so that the marketing is successful. Choosing the ideal pairing brands is essential to add credibility to the arrangement.”
For instance, one retailer has Sue Bee Honey in the coffee bar area, as well as on the retail shelf. Others have put the item in the jams/jellies/nut butters and spreads area alongside breads, muffins and biscuit mixes.
“There must be good communication by all involved so that the pairing benefits everyone, and everybody wins, even the consumer,” says Payne.
Being a small team, Mifroma relies on its brokers and distributor partners to execute its cross-merchandising visions in-store.
“We have seen the most success with Gruyère displays,” says Schilt. “Adding in a fondue pot and recipe cards to the display is another way to provide usage suggestions and drive consumers to purchase all items needed to create the recipe.”
Michaels notes that Mama’s Creations always tries to create a compelling value proposition for the consumer, either with its own products or other corresponding items.
“Recently, we did a promotion with Ahold Stop & Shop where you bought Locatelli graded cheese, Mama Mancini’s Beef Meatballs and Stop & Shop fresh pasta for a bundled price of $11,” he says. “We saw tremendous uptake from that promotion.”
“The key challenge is to meet the different needs of our buyers in unique ways; we don’t have a one-size-fits-all pricing or promotion approach,” says Michaels. “The other key challenge is maintaining profitability. We can’t help our retailers in the long term if we can’t be profitable ourselves in the short term.”
THE FINAL WORD
“By offering promotions or discounts for purchasing bundled items, companies can encourage customers to buy more,” says Sewall.
For example, a deli meat brand could partner with a bread company and offer a discount when customers buy both products together. Additionally, retailers can utilize cross-merchandising to promote new or seasonal items by strategically placing them alongside popular deli products.
Overall, cross-merchandising is a win-win opportunity for both companies and retailers to increase sales, improve the shopping experience, and enhance customer satisfaction.
