By Laura Gayle, Business Woman Guide
If you run an online business, understanding product bundling could be the key to selling more of your inventory — whether it’s shoes or software, apples or apps — at a faster rate. Bundling your products also creates a great incentive for customers to purchase more on your website. Additionally, bundling is often beneficial for customers as well as business owners, making everyone is happy at the end of your business interaction.
Why is Product Bundling Useful?
When it comes to running an eCommerce business, utilizing product bundles can greatly improve sales and increase profits. At its core, the idea behind product bundling is to offer multiple products, which are typically sold separately, for a combined, reduced price. This helps sellers move top-selling products more quickly while also creating an opportunity to boost the sales of lower-demand products.
eCommerce sites offering product bundles also provide advantages to consumers in a number of ways:
- Shopping is easier and more convenient, as customers are given the option to purchase a bundle of related items instead of having to search through sites for multiple items.
- In addition to their convenience, bundles may group together items which the customer might otherwise have forgotten, not considered, or been on the fence about purchasing.
- Companies can encourage their consumers to try new and different products through bundling, creating the potential to increase future sales of those new products.
- Curated bundles keep consumers from feeling overwhelmed by too many potential options.
Bundling products can make your customers’ lives simpler, simultaneously making your business more profitable and easier to run.
Managing Customer Value Perception
Bundling requires retailers to pay attention to consumer value perception. Customers are more likely to buy something that they believe has greater value. While that may seem like a simple concept, it’s actually the principle that product bundling relies on. When developing and marketing products, a company needs to discern what their customers will want to buy. This is the reason marketing research is so important: It gives companies a look into what consumers want and need, which then allows them to adjust product availability and curate the bundles they offer accordingly.
There are four main types of consumer value perception. They include:
- Functional value: This is the perceived value an item has when it provides a solution to a customer’s problem.
- Psychological Value: This figure represents the value of the product in its ability to make the consumer feel better about themselves.
- Social Value: This is the value perceived about a product’s ability to make the consumer feel connected with others purely through owning the product.
- Monetary Value: Monetary value is calculated by subtracting the actual cost of the product from the other three values.
Tips for Product Bundling
- Keep track of your analytics – Keeping a close eye on your business’ analytics will allow you to see which of your products are being looked at and purchased most often, and which are slower moving off of the shelves. These details give companies a better idea of what items to potentially bundle together.
- Cross-sell products that go well together – Whether bundled products can be used together or they just complement one another in some way, it’s important to put considerable thought into your bundles to make sure they are as useful as possible to both business and consumer.
- Take advantage of mixed bundling – Mixed bundling is a practice that involves making items available together as a bundle, while also making the same items available as single products. While it may seem counterintuitive, since some customers will leave your store with only one item as opposed to a bundle, mixed bundling is beneficial in that those customers who only bought one item may not have purchased anything if only the bundle was available.
- Pair with popular items – One of the best ways to utilize product bundling is to pair items that are new or slow to move off of shelves with those that are quick to sell out. Customers will end up purchasing things they may like, which they would not have noticed or bought otherwise.
- Bundle large items with accessories – If your company sells large-ticket items, think about selling accessories that go with those items as part of a bundle with the main product. For instance, someone who’s just bought a vacation rental property and needs to furnish the bedrooms might benefit from a curated bundle of home goods that includes a bed frame, mattress, pillows, and linens. Accessories like these are often forgotten by consumers focused on a single main purchase, and bundles help them complete the package.
- Try split testing – Often also referred to as A/B testing, split testing works by presenting half a company’s consumers with one version of your bundle, and the other half with an alternate version of the same bundle. Seeing which of the two bundles sells more products will help decide which to move forward with.
- Make your bundles known – Advertise your bundles. Consider making a page dedicated to them. Customers who are specifically looking for a good deal in a hurry will appreciate not having to search all over a site to find out what bundles are offered.
- Personalize your homepage. Static homepages are outdated. Customers appreciate personalized homepages that reflect their interests based on how they came to your site, their recent browsing history, or what you know about them from past purchases. The more you can tailor their customer journey, the more likely people are to enjoy their experience, be loyal to your brand, and accept your recommendations.
- Advertise on the checkout page – Similarly, consider offering bundles to customers on the checkout page. To further personalize the offer, base these bundles on items that are already included in their cart.
Taking advantage of bundles is a smart idea for all e-commerce businesses. They’re beneficial to both business and consumer. When utilized correctly, bundles create the perfect win-win situation: Consumers receive products they need a great price — as well as those they may have forgotten or ignored — and companies move their inventory more efficiently to create larger profits.