Product Bundling is the Smartest Pricing Strategy of 2016
It’s happened to the best of us, you go to the store with a list of what you need and check out with more than you intended to buy. The temptation to spend more doesn’t happen by accident. Retailers use dozens of strategies to encourage customers to add more to their cart, and a major strategy is product bundling.
Bundling products together, or making product pairing suggestions, is a great way to remind customers of other items that complement their intended purchase.
Product recommendations are responsible for 10% to 30% of ecommerce revenue
Product bundles typically have a higher perceived value even though they are more expensive than buying a single product. If the combination is right, bundling can increase ecommerce average order value and sales margins. A study on the effect of bundling shows that the strategy is also an effective way to attract high value buyers away from your competitors.
3 Ways to Sell Bundled Products:
- As an entire package
- Complementary product recommendations while shoppers are browsing
- Cross-sell pitch after products are added to the cart
Amazon has mastered the art of bundling. You can see the strategy at work throughout their product pages using “Frequently Bought Together” and “Customers Who Bought This Item Also Bought…”
Use Data to Drive Product Bundles
But just because bundling works well for Amazon, doesn’t mean it will work for every ecommerce business. Don’t leave product pairing decisions to trial and error. Instead, use data to drive your selections.
By analyzing customer data and tracking product performance, you can create bundles and recommendations based on which products are bought together most of the time. Go further by creating groups of users from analytics data and serve targeted bundles for unique groups of buyers.
Beyond what the data tells you, product bundles should all:
- Make sense together
- Represent value to the customer
- Increase the overall margin of the products
Give Buyers Creative Ideas
Use bundling as an opportunity to put products together in a way that your customers may never think about. This strategy helps shoppers get creative about how to get the most out of your products, resulting in higher sales and loyal customers.
Call Out Bundle Savings
Don’t leave it to shoppers to figure out how much they’ll save if they choose a bundle. Call out the value by highlighting the amount or percent saved when products are bought together.
Offer Bundle Promotions
Another bundling approach is to generate a promotion when the shopper is ready to checkout. Use “Add This and Save” offers with suggestions of items buyers can include in their cart. You can also limit the time that a discount is available to encourage the shopper to buy a bundle quickly.
Create Dedicated Bundle Pages
If your ecommerce business sells a lot of products that can be paired together, you’ll want to consider a dedicated bundle or kit page. Beauty product seller Sephora offers a quick link to a page featuring “Value Sets.”
Bundle Product Display
Once you’ve determined which products you’ll bundle together, make sure your website is set up to handle the new options. Many popular ecommerce platforms offer license and extension options that make it easier to add product pairings to your site and keep track of bundle inventory.
WooCommerce offers a Product Bundle license that allows you to add pre-configured or customizable bundles to your online store. Shopify’s Product Bundle app helps ecommerce sellers bundle by individual product or collection. Magento offers Frequently Bought Together and Bundle extensions.
If you decide to offer product bundles, make sure you do it right. Finding the right mix of products at a competitive price can differentiate your brand in a crowded ecommerce space while delivering higher profits and happy customers.