Merchandising Tips

Crossover Buying: Why It’s the Key to Your Retail Business

by • February 1, 2017 • Merchandising + TrendsComments Off on Crossover Buying: Why It’s the Key to Your Retail Business2885

While specializing in a specific type of merchandise can be fruitful, expanding your assortment and offering a wider “lifestyle” variety of items will supercharge your store’s revenue. “General Merchandise” has always worked for large retail chains — now you can make it work for you.


You might have noticed that your favorite car wash is now selling T-shirts and tech gadgets, while your local hardware store is selling moisturizers, fancy soaps, and picture frames. Ahead of the holidays, you can find stocking stuffers, greeting cards and seasonal gifts everywhere from gas stations to hospitals.

In the retail world, this phenomenon is known as Crossover Buying — and it’s actually a strategic way to expand your clientele and increase your revenue. Equally important is how you display your products, a.k.a. “Lifestyle” or Cross-Merchandising.


ASD Market Week


Yes, words like “niche” and “curated” are still important. After all, you can’t be all things to all people. But once you identify and own your niche, testing the waters with products from a completely different category can lead to a whole new territory of clients — and that, friends, can mean more revenue for independent retailers.


The Key to Crossover Buying, a.k.a. “Lifestyle Merchandising”

The Crossover Buying strategy has become a lifeline for several retailers. Case in point: bookstore Indigo, Canada’s version of Barnes & Noble.

indigo books

It’s been no secret for a while that focusing on book sales alone can be risky business. In 2014, Indigo’s CEO Heather Reisman decided to reinvent Indigo by introducing more “lifestyle” items like stationery and gifts, and even expanding its toy department with “American Girl” mini-boutiques within Indigo stores. Reisman has referred to this repositioning as turning Indigo into the world’s first “cultural department store” — a title that perfectly sums up its wide assortment of merchandise spanning from books to trendy water bottles, yoga gear, and aspirational houseware items.

Customers today want to be able to find (almost) everything they need in one place. They’re drawn to independent retailers who have a unique point of view and are known for curating an interesting array of different products. High-margin products, of course.

According to a recent article in RetailTouchPoints.com, “product variety” tops the list of elements that are important to shoppers of all ages (at 88 percent). This represents a move towards creating “lifestyle centers,” which are the kind of experiences shoppers are craving.


A Wildly Successful Example of Lifestyle Merchandising: Drake Hotel General Store

Another Canadian success story has mastered the art of lifestyle merchandising — so much so, it’s part of its name and DNA. Meet the Drake Hotel General Store.

What started as part of the Toronto-based Drake Hotel, the General Store has since expanded to seven locations (two standalone stores, five shop-in-shops) and has become known as the purveyor of cool goods of all kinds, knickknacks, and gear.

You can find all sorts of new goodies at our Yonge + Eglinton location. Shop @shopbando, @doiydesign, + more!

A photo posted by Drake General Store (@drakegeneralstore) on

We especially love the Drake Hotel General Store’s bio: “We’re a traditional hotel gift shop, a classic general store, a flea market stand, and a museum shop all rolled into one. We love classic and modern goods that fill us with whimsy and nostalgia.” They know who they are, and have the branding and visual presentation to back up their lifestyle identity. (Keep scrolling to see our list of cross-merchandising tips, below.)

Now let’s see how Crossover Buying applies — and works — for more independent retailers.


More Than a Gift Shop

The Hospital Gift Shop

Believe it or not, some hospital gift shop chains have multiplied their revenues by adding fashion accessories — yes, you read that right! — to their merchandising mix. Unexpected and unorthodox? Yes. Successful? Absolutely.  

Adding high-margin fashion and accessory items to your gift & novelties mix can significantly increase your revenue (and vice versa).

One could call it a “Gift Shop Renaissance” — with fashion items leading the way. So what are the fashion crossover items to consider adding to your assortment in 2017? They include jewelry, leggings, scarves, ponchos and hats. Novelty items from recently released movies like Star Wars and Trolls are also big this year.  

According to Lee Patterson, Regional Services Manager for the St. Vincent’s Hospital chain in Birmingham, Alabama, the economic downturn changed the way people buy. The tchotchkes usually found in gift shops are making way for trendier items like handbags and scarves.

“We’ve embraced the trend in fashion accessories and clothing, especially one-size-fits-all, ready-to-wear pieces. That’s turned our business around. In every store we now have ladies’ handbags, jewelry, and scarves. I think hospital gift shop sales of women’s fashion accessories and jewelry will be a consistent trend going forward. I don’t see any sign that it’s slowing down,” says Patterson.

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Also, adding Millennial-minded items like electronics and artisanal jewelry can be a recipe for success.


Retail Success Stories: How Adding Fashion Transformed These Hospital Gift Shops.


We also spoke with Bruce Leahy, founder of Quips ‘N’ Quotes, a greeting card institution and purveyor of American-themed merchandise on the Texas-Mexico border since 1972. As a seasoned entrepreneur and 30-year buying veteran of ASD, Leahy recognized the opportunity to expand his merchandise from Hallmark greeting cards to a destination for women’s accessories.

Today, his Hallmark greeting card category represents about five percent of Quips ‘N’ Quotes’ business, whereas gifts and fashion represent almost 50 percent of the current business.

Leahy even created a cool in-store coffee bar that seats 36 people at the Texas-Mexico border location. He stuck to a winning formula: “I was trying to mimic Starbucks when I created it.” Well, it worked as it creates a “dwell” factor that sets Quips ‘N’ Quotes apart.

When we asked Leahy about the ever-growing trend of Crossover Buying, he replied:

“The more we offer our customers, the more they will buy. It also gives the customer more reason to shop a store. It is critical in achieving ‘Add-on Sales,’” says Bruce Leahy, founder of Quips ‘N’ Quotes.

And how has Leahy made it work?

“Lots of testing. We crawl before we walk and walk before we run. Buy a little, if it sells, buy more. The customers will tell you if you are right.” Words to live by, indeed.


Retail Success Stories: How Quips ‘N’ Quotes Took Gifts and Fashion to Another Level.


The Gift & Novelties Shop

Independent shop Jack & Jill, based in Montreal, Canada, has been open for over 70 years and has become the go-to spot for gift & novelties items, accessories, and apparel. Jack & Jill focused primarily on children’s apparel during its first 50 years of business, then slowly started introducing gift & novelties items into the fold.

They started by selling a few “Beanie Baby” dolls, and it gradually evolved into more.

We spoke with Jack & Jill owner Barbara Vininsky about the secrets to her boutique’s success and how she stays relevant to her customers. One of her winning formulas is the concept of one-stop shopping: when her customers come in to purchase clothing for their kids or a gift for a child’s birthday party, they know they can find something cool for themselves (like a S’well water bottle) or even a hostess gift (like the Magnolia cupcake cookbook) when they’re in a pinch on a Saturday evening.

“My customers know they can come in for ‘trend items,’ for kids or adults. So they come to us to find a trend item for whoever they’re gifting, whether it’s a teacher or a kid’s birthday party. We’re not a toy store, we don’t pretend to be something we’re not. We’re a one-stop shop for trend items,” says Vininsky.


The Fade and Return of Kitson: What All Gift & Novelties Shops Can Learn.


More Than a Market

Over the top excited to hit up @uniqueusa this weekend! #regram @themiaproject // #shopmvad

A photo posted by Mar Vista Art Dept. (@mv_artdept) on

The Mar Vista Art Department is also making waves by bringing a sense of community and a “Curated Lifestyle Boutique” approach to a market.

Everything in their retail space is either made by the Art Department or someone they know, and the range of items is limitless, with everything from clothing and furniture to jewelry and home décor. There’s something for everyone — from the glam boho chic girl to the urban sophisticate guy.

According to co-founder Amy Cherie, “MVAD is an artisan retail space that supports local makers with a working art studio that sits in the back. We hold weekly workshops and events. This includes anything from indigo dyeing, woodworking, and watercoloring to private events for wineries and brands. We want our space to be a go-to spot on the west side so during the day, we’re open for co-working.”

Co-founder Chris Smith explains MVAD’s buying strategy: “We offer amazing products for our community at varying price points and categories so that all customers in our demographic have the ability to feel inspired and purchase an item. This could be a camp mug from Iron & Resin for $10, a $50 Cabin Spray from Juniper Ridge, a Topo Designs bag for $120, or $300 sunglasses from Northern Lights. We feel that MVAD is more than a place to purchase an item, our goal is to provide an experience for every customer that walks in and offer a destination for discovery with our merchandising and product mix.”


Shop This Look: Fashion Accessories Now Trending.


Membership to MVAD means that artists become part of the MVAD community, and are featured on MVAD’s Instagram feed (which boasts approximately 44K followers), MVAD’s shoppable website, and placement IRL at its Venice Beach location. As members, local handmade artists get the support they need in terms of visual merchandising, staff and on-site resources, and an aesthetically on-point space to sell and showcase products.

“In order to create this experience, it’s super important for us to merchandise our products in a way that showcases the lifestyle behind it. Beyond this merchandising approach, we magnify this experience with our weekly workshops to build customer engagement and allow them to experience the brands we work with first-hand,” says Smith.

Naturally, we’re loving this commercial and cultural hybrid!


Putting It All Together: It’s Called Cross-Merchandising

So you’ve purchased your lifestyle goods and you’re ready to sell your inventory; now how do you add them to your display in a way that’s most appealing (and not too busy or overwhelming to consumers)? Part of the magic is in the presentation and creating a seamless merchandising experience that attracts your customers, and encourages them to buy as many items as possible.

We spoke with Nicole Leinbach Reyhle, Founder & Publisher of Retail Minded and Co-Founder of the Independent Retailer Conference, about lifestyle merchandising and making your displays next-level successful.

Taking a ‘lifestyle’ approach to merchandising is a great way to capture more attention from a variety of customers. By cross-merchandising inventory from various categories, you will more likely capture attention from a broader range of potential buyers while also increasing the chance of higher units per sale, says Reyhle. “For example, showing an apron merchandised over a stylish outfit and displayed by kitchen-themed inventory opens up opportunities for a variety of like-minded products to be sold.”

When working on your visual presentation, consider how these items would be laid out in someone’s home. Don’t let the different product categories dictate your visual presentation — mix it up!

Susanne Kernan, Co-Founder of SNR Brand & Licensing Strategists (an NYC-based strategic licensing agency focused on growing iconic multi-channel brands at retail), also offered her cross-merchandising tactics — here are her most important tips:

1. Use a color scheme to create a more organized aesthetic. “One of the challenges of cross-merchandising a variety of items is fighting the tendency for your presentation to look messy or disorganized, or worse, random!” Kernan says.

She offers the following solution to ensure items are presented in a more methodical fashion: “Choose a single color to tie together the presentation visually, such as all red for a Valentine’s Day presentation or all green for a fresh take on a housewares presentation in spring.”

2. Coordinate the holders or vessels you use, as display items. “Another tactic is to use coordinated vessels to hold the smaller items on a table or shelf. The consistency of the boxes, baskets or bins will visually organize your display and make it easier to shop.”

3. Create a theme or narrative for the different product categories. Kernan explains: The best tactic to create a compelling cross-merchandised display is to select items that work together, offering your customer a solution. The bar accessory displays seen especially at Father’s Day is a great example of this, and promotes multiple sales for a higher average ticket.”


Simple Ways to Get Started Now

With trade show season upon us, here are other ways to get started with the Crossover Buying approach — be sure to keep these in mind as you work the ASD floor, looking for merchandise!

  • Buy and test new wholesale products.
  • Shop wholesale product categories outside of your main focus.
  • When attending trade shows, go to different sections within the show. Sell clothing? Go to the stationery or beauty section. Sell gifts & novelties? Check out the high-margin fashion and accessories booths. Go beyond your usual sections and visit booths you’ve never been to before — you might discover that new hot-ticket item you and your customers have been searching for.
  • Promote your shop as a “Lifestyle Destination”: this is a cool way to refer to your store as a one-stop shop.
  • Apply your unique vision and personality to a diverse group of products.
  • Make sure you calculate your margins when considering new crossover / general merchandise items to add to your mix.

Merchandise your newfound lifestyle bounty effectively. Learn how here.


The Takeaway

If you’re thinking of adding some new merchandise categories to your current product assortment, try it gradually and analyze the results. Experimenting and evolving can help you discover and attract a whole new type of customer — and drive more sales!


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