5 Product Bundling Strategies to Skyrocket eCommerce Sales
Have you ever bought an extra tube of toothpaste because you saw a "buy one, get one free" deal?
How about wanting a burger and fries from a fast-food joint but buying a drink with it because it does not cost much more?
That’s product bundling, and we have all experienced it, often without even realizing.
Every eCommerce business owner understands the challenges of attracting new shoppers, keeping inventory moving, and making sure current customers are happy.
Selling your products in bundles is a strategy that enables eCommerce businesses to present customers with new products and increase revenue from a single order.
The article below goes through the in’s and out’s of product bundling and gives great examples of companies using this strategy to boost their sales.
What are product bundles?
Product bundles are several items that are typically purchased individually but are combined and sold as one package.
Also referred to as package deals, product bundles are usually made up of complementary or similar items.
Here’s a great example of a product bundle - SunnyLife’s Beach Kit.
Benefits of product bundling
Product bundling is an effective pricing strategy for eCommerce businesses. It provides an avenue to cross-sell and upsell a wide range of products.
Package deals generally include multiple products at a discounted price. Both the customer and the business benefit by:
- Increasing customers' perception of value because they are saving money and getting a deal.
- Improving inventory management for companies to clear out slow-selling products or overstocked items.
- Creating a better shopping experience when presented with prepackaged and convenient options.
- Increasing the average cart value and generating more sales.
- Saving businesses money on marketing and distribution when customers spend more on larger purchases.
Tips on which products to bundle together
Choose products that complement each other when deciding which products to bundle. Think strategically and consider the following.
- Bundle products that are useful, such as accessories, that a customer will likely need with their purchase. For example, if someone is buying a battery-operated item where a battery is not included, put the correct battery size in the bundle to save the customer time searching for them.
- Offer real value by making sure your bundles will save customers money.
- Get ideas from real-life data by looking at sales patterns to see what customers tend to buy together.
- Check out which products your competitors are putting into bundles.
Below are nine eCommerce bundling strategies to send your product sales to the moon.
1. Use data and analyze product performance
eCommerce businesses can use artificial intelligence (AI) and machine learning (ML) tools to leverage the full power of data to boost conversions and sell smarter.
As eCommerce innovative development grows rapidly, we will continue to see the positive impact AI and ML tools will have on eCommerce sales.
Big players such as Shopify, Rakuten, and Amazon lead the way in leveraging AI and MI in collecting data from every customer interaction to optimize product bundles and increase sales.
If you are just starting out in eCommerce and are looking for the best platform for your business, learn about the pricing, benefits, and features of some of the most popular platforms on the market today.
Look at the pricing, features, and benefits of each and choose the one best suited for your business to increase sales dramatically.
For example, Shopify automatically creates group bundles based on historical sales data. The items included are frequently purchased together, like shirts and pants. Check out this feature on the screenshot below.
This process is similar to Amazon's site when they recommend products. To show this in action, let us search on Amazon for a toaster oven.
When you scroll down the page to read all the information, specs, reviews, questions and answers about this toaster oven, Amazon presents you with suggestions to purchase items that are usually bought or needed with a toaster oven.
From the data collected, Amazon's AI and ML algorithms detected that when others bought this toaster oven, they also bought three additional sets of items, as shown in the image above.
Notice how simple it is to add the items to your cart without having to search for them. This does not mean that everyone who buys the Hamilton Beach toaster oven will automatically add the additional items to their carts.
But Amazon's AI and ML-generated data showed that enough customers did for them to include them as product recommendations.
When creating your product bundles:
- Utilize data collected from eCommerce software, such as browsing history and past purchases, to create personalized bundles and customized landing pages.
- Look for consumer buying behavior patterns.
- Identify which products are frequently purchased together.
eCommerce platforms are using AI and ML algorithms to come up with more compelling offers and product recommendations.
Using data and analyzing consumer behavior and product performance will help you identify which products are most frequently bought together.
2. What are your customers already buying?
Customers are likely to make additional purchases they might not have otherwise considered if they see significant discount offers or special product bundles.
For example, if you are buying a gift for someone special who wants Black Tea Corset Cream Firming Moisturizer from Sephora, you can purchase it alone for $95.
However, if you found that you could purchase an entire gift set of Black Tea products bundled together for not much more money, wouldn't you likely be inclined to purchase the set?
After all, you know you want the brand, so why not get the face cleaner, age-delaying eye cream, overnight mask, and facial treatment essence to get a better, more comprehensive effect?
That is the power of product bundles. The consumer spends a little more to get complementary products, and the brand gets more revenue.
3. Know customers needs and bundle them
Often, brands find that offering a free seven-day or one-month trial lets customers evaluate the value to them before paying.
If satisfied, the consumer will continue to pay for further access to the services. Below are some famous brands that offer free services for a period of time.
With original series, hit movies, and kids' shows, Hulu lets customers try out their service free for one month, but they also try the bundling strategy to make you convert immediately.
Hulu understands that many of their customers subscribe to other services at the same time and uses this knowledge to offer a 25% discount on a Hulu Disney ESPN bundle that many will find so compelling that they might subscribe immediately.
Getting new customers to pay immediately is a big boost for Hulu's bottom line.
Another great example of a company using bundles is Spotify, where you can find just about any song you want. However, if you do not want to see annoying ads, you might want to upgrade to a premium account. Which is a great moment to present the available bundles.
Notice that they offer four packages so that the subscriber is likely to see the value of selecting a higher package as the perceived value of the packages per user is a lot higher than an individual person plan.
Given the steep discounts for Duo and Family over the Individual plan, these package deals are likely to significantly increase the number of Spotify subscribers and their profits.
4. Promote lesser-known or newly launched items
For product bundles, companies can capitalize on some of their products' popularity to promote lesser-known or newly launched items.
For example, Shaklee often includes free samples of products in their bundles of best-selling items.
The popular product bundles help bring exposure, drive sales, and open a new market for the new or less popular products to get them noticed.
5. Create Bundles for specific channels
We have all heard the phrase "the money is in the list," referring to email marketing. A good rule of thumb is building a list before you are ready to launch a new product or service.
Email still dominates digital marketing because of its high ROI. On average, for every $1 you spend on email marketing, the average rate of return is $42.
Although it is great to have a massive email list, the customer relationship and level of engagement play a more significant role.
So, even with a small list, you can effectively use email marketing to promote your product bundles.
Segment lists into groups that share similar needs or qualities to create more targeted and personalized emails.
Send new visitors discounts or free offers to attract potential customers and introduce them to your products.
Communicate offers directly with potential clients to build interest over time. BarkBox is an outstanding example of a company that markets its services using its mailing lists.
BarkBox also uses its email marketing campaigns to introduce customers to new products. In the image below, customers are sent new products curated for them by the company.
This is a way of introducing current subscribers to new products inside their product bundle.
Remember, the purpose of sending out emails, like all marketing initiatives, is to develop and nurture relationships with your current and prospective customers.
Do not forget that it is all about how your products can make your potential customers' lives better.
Stay in touch via email with your current customers, provide and share special offers for VIPs, and be sure to customize and personalize the emails you send to cultivate a long-term relationship with your client base.
Ready to boost your revenue with product bundles?
Companies see the highest returns on their investments when they focus on:
- Utilizing the popularity of successful products to introduce new or lesser-known items.
- Offering free trials or free product samples.
- Using email marketing to stay in touch with and build relationships with current customers.
- Know customers needs and bundle them
- Promote lesser-known or newly launched items
Offering product bundles can combat buyer fatigue, deliver a better customer experience, provide greater convenience, and acquire new customers. Make product bundles part of your business success story.
Written by our guest writer Julie Weishaar, Visual Digital Marketing Specialist at New Horizons 123
Julie works to grow small businesses, increasing their online visibility by leveraging the latest internet and video technologies. She specializes in creative camera-less animated video production, custom images, content writing, and SlideShare presentations. Julie also manages HubSpot CRM, blog management, email marketing, marketing automation, and social media for her clients.