This week, I dashed into Safeway to pick up some paper towels. While standing in the aisle, I noticed that the left side held tissue, paper towels, and other essential sundries. On the right side, I found impulse buys, such as chips, pop, nuts, and popcorn. Brilliant.
Safeway obviously realizes that, when customers pop into the store to pick up necessities, they’re not planning a major shopping excursion. By placing impulse buys in the same aisle as low-ticket basic necessities, Safeway captures impluse buys, capturing more revenue from an otherwise small sale. Call it passive cross-selling.
Another oft-cited example comes from the United States, where a major retailer mined their data warehouses and discovered that most of their diaper sales were to men who purchased no other items. Presumably, the men had run to the store at night, desperate to pick up diapers, while their spouses stayed home with squalling babies. The retailer analyzed its data, and determined that, in general, men were the most likely customers to purchase beer. So the retailer put baby diapers in the same aisle as beer. When men pulled a big box of diapers from the shelf, they turned around and grabbed a six-pack with their free hand. As a result, the American retailer grew the cash register value per diaper buyer.
Large companies often use customer relationship management (CRM) systems and data warehouses to determine marketing strategies like these. However, even small companies can grow the value of transaction per customer. Small companies should consider how to meet the whole needs of the customer, then cross-sell products that meet those needs.
(c) 2004 by Andrea Coutu. Vancouver Marketing Consultant. All rights reserved.