What is cross-selling?
Cross-selling is a business practice of recommending related or complementary items to a product that the customer has purchased to increase their spending in a store.
Cross-selling is one of the easiest ways to grow a business. However, a good brand-customer relationship must be established to understand customers’ needs accurately. This insight is essential to determine the most effective cross-selling strategy.
Before implementing a cross-selling plan, the following must be taken into account:
- What are the products related to the item bought? A cross-sell works if it is relevant to the original purchase. It should add value, benefit, or elevate the experience for the buyer. One item can be tied to multiple products. Knowing the context of the purchase can narrow down the list to the most appropriate suggestions.
- When is the right time to cross-sell? The timing of the offer is crucial to a successful cross-selling strategy. Bundled offers and package discounts can be introduced at the start of the customer’s shopping journey to help plan their purchase. Recommendations can be made when the customer adds an item to their cart or right before check out. But sometimes it can be better to wait for a few days before making a related suggestion.
- Where to place the product recommendation? Optimal placement is more likely to convince the buyer to purchase the cross-sell. Customers should easily see the items — either with the related products or before the payment section. They must also make a visual connection between the item in their cart and the recommended item.
- How much is the customer willing to spend? Cross-sell should be within the buyer’s financial capabilities. The complementary products are often the same or lesser in value than the initial purchase to minimize the customer’s cost burden. They may also be more open to buying suggested items if offered some savings or more flexible payment options.
Cross-selling benefits businesses and shoppers
When done correctly, cross-selling can benefit both the business and its customers.
Online stores enjoy larger order sizes and profits by recommending add-ons and accessory items. McKinsey & Company estimated that 35% of purchases on Amazon are from product recommendations. Moreover, businesses can save resources because they don’t need to invest in additional tools to encourage repeat purchases. Instead, they can focus on creating effective cross-selling plans. According to Marketing Metrics, companies have a 60% to 70% chance of selling to an existing customer through product recommendations.
Cross-selling is also a way for brands to introduce lesser-known products to shoppers. They can showcase the item’s function and features without employing hard-sell techniques.
On the other hand, customers can experience a more well-rounded shopping journey. The product suggestions may help their initial purchase work better or inspire their styling creativity. Considering that 91% of consumers are more likely to shop with brands who recognize, remember, and provide relevant recommendations, such added value can influence customer loyalty in the long run.
Cross-selling practices in e-commerce
Many e-commerce companies employ cross-selling as part of their sales and marketing strategy. Here are some of the popular cross-selling strategies that online retail platforms utilize:
- Bundling: Packaging related items helps maximize sales for the brand and offer customers suggestions on how to use the item. It also becomes more appealing to customers when these bundles are available at a discount.
- Visual aids: Visual cues provide the real-life look of items and help shoppers picture them in use. When visual aids include multiple items in the store, the shopper may consider the advantage of purchasing the items together as a whole package.
- Content: Creating content like how-to articles and videos demonstrate the use of products together. It helps drive the importance of purchasing other items to go with the original buy.
In e-commerce, cross-selling generally happens in the store during the add-to-cart and checkout process. But companies may also employ other post-purchase selling channels, such as email and social media.
Amazon shows the sold item in use along with other products in their “Livestreams Related To This Product” feature. The e-commerce site also displays “Customers Who Viewed This Item Also Viewed” sections within the product page.
Meanwhile, fashion brand Zara employs a “Match With” feature to suggest clothing and accessories that work with the item.
Cafe24 brands 66 Girls, Stylenanda, and IMVELY have also created effective cross-selling programs by selling complete sets of styles rather than marketing one item at a time. While many international brands only show model cuts of a product on a white background, these Korean brands show items uniquely styled in various settings.
For instance, IMVELY features 50 plus pictures per product, including different fashion tips for various occasions in the form of a lookbook. Customers are then inspired to buy the whole ensemble to mimic the vibe and atmosphere showcased on the site. Meanwhile, Stylenanda lists all the clothes, accessories, and makeup used in the styling in the “Related Items” section on their product details page.
Cafe24 offers helpful cross-selling tools
Cafe24 offers a one-stop-shop for various e-commerce solutions that can help you grow your online business successfully. The global e-commerce company provides functions that merchants can use to easily and quickly implement cross-selling strategies in their storefronts.
The Cafe24 Store has a vast library of apps and tools that provides product recommendations to buyers in e-commerce stores. These solutions are easy-to-plugin and ready-to-use. Merchants only need to make a few clicks to integrate these apps into their online store and use them.
Moreover, the tools use state-of-the-art technology, such as big data, to optimize business operations. They require minimal input and supervision from the merchant by automatically interpreting customer data and creating relevant suggestions.
Cafe24’s Smart Recommendation is a premium cross-selling tool based on a machine learning algorithm. The tool is the first of its kind in Korea to automatically identify various products that a shopper would be interested in to cross-sell. It effectively uses a customer’s purchase pattern and click tendency data to minimize their product search times and maximize checkout rates.