Why sell one product when you could sell two three or even more? It sounds like a no-brainer but product bundling requires a deep knowledge of your customer and a solid body of data. Here's how eCommerce brands can develop their own winning combinations.
What is Product Bundling?
Product bundling is when multiple products usually similar or complementary ones are sold together. Different product bundles are developed to perform different roles from simply increasing average order value to clearing old stock and getting new products in front of fresh eyes.
Advantages of Product Bundling?
Bundling products helps eCommerce businesses in a number of ways. Sure you're selling multiple products at the same time and that's always a good thing. But it also translates into some deeper business benefits.
Waste less inventory
Products which sit around without being sold- other wise known as deadstock-can takeup storage space and keep your inventory costs high. Plus they're simply not being sold. Sooner or later you're going to have to cut your losses and lose that product line.
That is of course unless you bundle them. Package an item that isn't selling with one that's moving much faster. The momentum of your big sellers can be leveraged to reduce waste and stay on top of storage costs.
Increase your Average Order Value
Your average order value (AOV)is acritical metric that every eCommerce marketer should be trying to improve and product bundling helps enormously to maximize it. The psychology of encouraging customers to buy more than one complementary product at a time is simple but highly effective. Some verticals lend themselves incredibly well to this; cosmetics art supplies sports gear and so on.
Lower your marketing and shipping costs
It stands to reason that marketing and distributing one product is going to cost you less than doing so for multiple different products at the same time. Bundling those multiple items together ensures a higher order value for the same marketing and distribution spend.
Pay attention to how your products get used in the real world. People can't use paints without brushes so why wouldn't they be bought together? eCommerce is loaded with examples like that where customers will be glad to get everything that they need in one place.
Streamline your customer experience
In fact many eCommerce brands present people with too much choice. Hundreds of vendors selling thousands of related and complementary products risks overwhelming consumers with options. In many cases they'll thank you for easing some of that cognitive load.
Bundling products also helps you keep on top of your brand image and messaging. A smaller palette of products lets you refine your story more carefully connecting more customers with more relevant opportunities to buy.
Different types of product bundles
Product bundles should be put together to perform a specific job not just bundled for their own sake. You know your customers and how their use your products use that knowledge to create a personalized e Commerce experience for them.
Let's look at some typical types of product bundles and the jobs they're created to do.
Pure Product Bundles
Pure bundles consist of products which are only ever sold bundled their component parts can't be sold individually.Subscription boxes are a prime example;even if customers can choose between a few different boxes they're all still pure bundles packaged as one SKU each.
Buy-one-get-one Product bundles
In buy-one-get-one bundles a main item is packaged alongside something complementary. These bundles work well when a customer is unlikely to buy more than one of the same exact product. They might not buy two laptops at the same time but if you bundle a laptop and a laptop case that's likely to go down well.
Mix and match Product bundles
Mix and match bundles let customers pick similar items from multiple groups of complementary products. These bundles were more prevalent in the days of bricks-and-mortar retail but they can still be made to work foreCommerce. Fashion brands mightlet customers mix and match clothes with accessories to bundle for example.
New or lesser-known product bundles
Earlier we mentioned how product bundlinghelps you move stagnant stock off your shelves. The same holds true for new products which haven't had time to pick up a proactive following. Bundling new items in with reliable sellers gets them out there in front of new audiences.
Upselland cross-sell bundles
Upselling andcross-sellingare marketing tactics as old as business itself but they're still very handy foreCommercebrands.If you know two products are likely to be used together it makes sense to bundle them.Different pieces of sporting equipment which are both essential to the game for example are a solid bet.
Inventory clearance bundles
Of course sometimes you simply need to get rid of old stock. Bundling stagnant productsalong with solid sellers as describedearlier is a good way toclear inventory and lower storage costs. As long as the bundled products are relevant and properly chosen people will struggle to resist a bargain.
Some products sell incredibly well as gifts so give shoppers the chance to gift them together. Deodorant and shower gel sets perform fantastically at Christmas. The same goes for sets of socks and underpants. Gift bundling also lets you add options like special packaging and other personal finishing touches.
Examples of Product bundling in action
One of the oldest marketing tactics is also a great example of product bundling. The so-called blades and razors model where a relatively inexpensive razor is bundled with the more expensive blades promotes repeat purchases and locks users into one brand.
This tactic has been picked up by video game companies who upsell by packaging software with consoles. Printer companies take a similar approach by making sure their printers only work with the cartridges they come bundled alongside.
From McDonald's Happy Meals to bundling digital products with expanded features if one product is typically used in tandem with another it's a strong candidate for bundling.
How to start product bundling for your eCommerce brand
Some products might be obviously good matches; baseball bats and mitts pencils and erasers. Others aren't so readily apparent and might take some digging through data to spot.
If you're usingaWhere to Buy solution you'llbe able to see exactly which products consumersare purchasingin the same basket including itemsboughtfromcompetitors.You can use this data to inform potential bundles or decide which items you should be advertising on your Amazon product detail pages for example.
Useful metrics for creating product bundles
When deciding on your product bundling strategy it helps to know which items are going to perform well together. Using your internal sales data you can combine products with confidence and give shoppers the experience they demand.
Good metrics to think about include:
- Complementary product sales to spot trends in products that are being purchased together already (requires aWhere to Buy solution)
- AOV knowing what the average shopper spends with you per visit sets a benchmark to raise
- Highest and lowest sellers to get a feel for which items' sales might help others'
- Year-on-year growth helping anticipate which products could perform better in the near future
- Profit margins per SKU allowing combos which accentuate high performance
- Profit margins per listing giving an insight into what customers are buying on each platform
- Seasonal trends so you can be certain when the time is right to bundle products and when to sell separately
For eCommerce businesses driven by data customer insight lets you create bundles which drastically cut down on friction for the consumer. What those bundles look like and what jobs they carry out are up to your own creativity.