The days of placing shippers of Parmesan cheese in the pasta aisle are far from over, but cross-merchandising is evolving as retailers focus on more sophisticated occasion-based solutions.
Ethnic-themed displays that combine spices with produce, sparkling wine in the bakery, and fresh meats marinated in private-label sauces are among the latest strategies.
At Scolari's Food and Drug in Sparks, Nev., department managers meet twice a month to talk about which products are suitable for pairing, recognizing cross-merchandising can set apart one retailer from the next, said Steve Dickson, dry grocery buyer/merchandiser.
Spices and marinades are a popular category, since they lend themselves well to tie-ins with perimeter departments, he said. Tempura batters are placed in seafood, and guacamole spice mixes alongside avocados. Scolari's features items that are on special.
"Our hope is to get a customer to pick up an item that they normally wouldn't," Dickson said.
Heightened competition has forced retailers to step up promotional programs in ways they may not have embraced before. In doing so, they can not only generate impulse sales and higher basket rings, but also differentiate themselves as one-stop-shopping destinations.
"Rather than having people see our products individually, we want them to see our stores as a total solution," said Jeff Porter, bottle shop and beverage category manager at Andronico's in Albany, Calif.
One way Andronico's sets out to accomplish that is with a new cross-merchandising program involving wine. For each of the summer months, it will cross-promote a different wine with various foods and general merchandise.
Andronico's has done the same for beer by placing it in the meat department as part of a barbecue theme in the summer. At a time when wine accounts for 70% of its alcohol sales, though, the retailer decided the time was right to expand the effort to wine.
In June, rosT wines will be cross-merchandised with barbecue utensils, dry rubs and hard cheeses that require no refrigeration. Recipe cards that suggest food and wine pairings will also be displayed. In July, the theme will change to riesling; and in August, summer whites. The wine brands haven't been selected, but Porter said he wants to include those from emerging countries, like South America.
Andronico's views the wine displays as a valuable service for shoppers who want to know how to pair foods with wine.
"We have people on the sales floor, but this provides extra customer service," Porter said.
Such themed events are becoming a more integral part of cross-merchandising, said Don Stuart, managing director at Cannondale Associates in Wilton, Conn., a sales and marketing consulting firm.
Whether it's an Italian promotion that ties in pasta, sauce, cheese and produce or an allergy center that combines over-the-counter medicines with herbal remedies and teas, such promotions could help attract much-needed foot traffic to the Center Store if set up on an endcap.
"Cross-merchandising helps retailers differentiate themselves beyond price," Stuart said.
Dorothy Lane Markets in Dayton, Ohio, uses different levels of cross-merchandising, depending on the product. For instance, it positions its private-label peanuts in the beer section, stacked on a floor display or merchandised directly on the shelf.
But Dorothy Lane goes a step further by creating themed displays in the front of the store, said Todd Templin, beer and wine director for the retailer.
A recent promotion suggested ideas for a Cinco de Mayo party by co-merchandising Corona beer, lime, avocados, spices and chips.
"We want to make shopping easy for the consumer so that they don't have to search around for coordinating products," Templin said.
Dorothy Lane is also dabbling with more elaborate cross-merchandising concepts. Last February, it grouped 1-liter bottles of sangria on the front end with peaches, oranges and other fruits.
It was a risky venture; the retailer typically sells just a couple of cases that time of year. The promotion paid off, though: 1 pallet (56 cases) of the sangria sold in just one month.
"The amount of sangria we sold was amazing, especially for the winter," Templin said.
More retailers should make an effort to put cross-merchandising displays in high-traffic areas like the front of the store, said Mark Heckman, vice president of retail insights for Sorensen Associates, Portland, Ore., an in-store research company.
"Every store has hot spots," he said. "Retailers need to cross-merchandise in those areas."
That's because about 60% of all shoppers cover less than 25% of a 40,000-square-foot store in a typical trip, according to Sorensen research, suggesting there's significant opportunity to increase basket sizes.
"The vast majority of shoppers are not on stock-up trips, so cross-merchandising is key to generating incremental growth," Heckman said.
Since many consumers don't shop dry grocery aisles on every trip, cross-merchandising is especially critical to the Center Store.
Dorothy Lane cross-merchandises to suggest alternate uses for products. So sparkling wine, for one, has a secondary display in the bakery department.
"Many people only think of sparking wine for celebrating New Year's or birthdays," Templin said. "We want to show that it can also be paired with pastries and other desserts."
Green Hills Farms in Syracuse, N.Y., meanwhile, uses cross-merchandising to encourage private-label purchases. As part of a major initiative involving its Green Hills Farms label, the retailer is using its own spaghetti sauce as an ingredient in meatball sandwiches and other sauce-based items sold in the self-service deli case. Green Hills also is marinating chicken and pork in its store-brand apricot-and-ginger teriyaki sauce and basting meat and poultry in other marinades and sauces. Signage and cross-merchandised jars of the sauces tell shoppers that the private label is being used as an ingredient.
"We're dedicated to using the Green Hills label as an ingredient wherever we can," said John Mahar, director of operations for the single-store operator.
The goal is to heighten awareness of the distinctive flavors - like bourbon/peppercorn steak and Tuscan-lemon marinades - in its private-label line.
"We want people to know that anything that has the Green Hills Farms label on it will be unique," Mahar said, adding that the effort has helped boost sales.
While many retailers develop cross-merchandising programs on their own, others are getting help from their manufacturer suppliers. E&J Gallo Winery, Modesto, Calif., for instance, has tested an in-store program at Albertsons called "Don't Forget the Wine."
To spark wine sales, non-branded signs reading "Don't Forget the Wine" are placed in various store departments, such as meat and produce. Wine from Gallo and other wineries is cross-merchandised, along with recipe cards. Gallo hopes to bring the program to other retailers, said George Marsden, vice president of communications for the wine maker.
"We want to remind consumers during their shopping trip that wine can make any occasion special," he said. And with wine's ability to increase basket rings to an average of $54, up from $34, according to Marsden, a successful cross-merchandising program can be pretty nice for retailers, too.
