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Product
Bundles
Chances are that as a retailer, you have been looking to or experimenting with product bundles as a way to increase revenue. Product bundling is a key ecommerce growth strategy that any retailer can leverage. For this strategy to succeed, it is important to ensure you are offering the customer the right “bundle” while not compromising on your individual product margins.
In this article I’m going to describe four key bundling strategies and how to implement them to drive sales. I will explore what they are, the key points to remember about each and how to set them up. Additionally, I will highlight best practice examples of well-known retailers leveraging these tactics effectively.
"Ideally you should be bundling products that have a positive synergy together," Harvard Business School professor Vineet Kumar says,"but what we have shown here is that even when synergy is negative, bundling can be profitable." - Forbes
Pre-built bundles or sets are the simplest and most pervasive form of bundling products together, often used for gift sets or hampers.
Products are grouped together and sold as a package. The bundle is treated as a single SKU and the inventory tracked as one item. This means it's easy to set up in your ecommerce platform, warehouse and ERP. Pre-built bundles typically contain products with no variants or options. The bundle itself however can have size or colour options, as long as each product in it is the same size. For example, if you have three items of clothing, each item should be the same size, but can have different colours like Pepa & Co’s gift sets.
Here are some best practice examples of well-known retailers using pre-built bundles.
Virtual bundles allow you to group a set of standard products into a bundle on your ecommerce platform. It’s important to note that standard products that make up the bundle are tracked separately. Often a discount is provided as an incentive against buying the products individually, however the goal is to provide an easy way for the customer to purchase complimentary items together, thus increasing the average order value.
Two or more standard products grouped together as a master / parent product in your ecommerce platform. The parent product is then presented to your customer as a single product on your website.
The inventory for each product is tracked separately. Usually the revenue is tracked into your analytics as a single product, however your warehouse and ERP will usually need the revenue attributed across each product in the bundle separately.
There are a few ways products are grouped together:
Typically some work will be needed on both the frontend and backend of your ecommerce platform in order to allow virtual bundles.
Virtual bundles can be supported by each of the four ecommerce platforms we work with, either natively or via an app:
Here are some best practice examples of well-known retailers using pre-built bundles.
Bundle builders take virtual bundles to the next level and allow customers to select what products they want to buy together. Normally, the objective here is one of the following:
A bundle builder is a complex product that allows customers to choose different options and products that make up a product. Common use cases are:
Bundle Builders can be supported by three of the four ecommerce platforms we work with, either natively or via an app:
Pioneered by Amazon, “Buy Together and Save” groups products together to tempt the visitor to purchase more.
A manual or automatic feature that groups together products and allows the customer to purchase multiple products at the same time. This usually works best with products that have no options, for example books or lego sets.
If you have to select options like colour or size, this feature becomes more complex to design and build as it should still be easy to use for the end user.
This is an advanced feature that requires an app, extension or 3rd party like Nosto to implement
Overall, product bundling is a very effective way to allow your customers to buy a range of products with just one click while also increasing your average order value. This tactic offers convenience and entices your customers to keep coming back.
No matter what ecommerce platform you’re using, there is always a bundling strategy you can set up. Start with simpler strategies like pre-built bundles or sets and as you get a few successes under your belt, you can then build more complex strategies. This will help you push your business forward, while providing more value to your customers.
Image Credit (Hero): Marissa Grootes
