From “buy one, get one free” offers in retail stores to pre-configured value meals at fast food restaurants, product bundling is a tried and true way of boosting sales. But savvy e-commerce businesses are putting a new spin on this strategy by harnessing intelligent software to customize bundles for customers based on their browsing histories, demographics, or other factors.
If you’re not seeing the online sales you’d like or you’re on the hunt for growth, personalized product bundling could be an innovative way to increase average cart value and reduce inventory. Product bundling involves selling multiple related products as a package deal, often at a slightly discounted rate. Personalized bundling uses customer insights to present individualized offers that might vary from one customer to the next. When executed properly, customized bundles can help you see results, even on slow-moving inventory or during the offseason. Here’s what educated bundling can mean for you.
Increase the Perceived Value of Your Inventory
Bundles leave a different psychological impression than a single item; subconsciously, they communicate a better value to customers. When customers purchase, say, three items for less than the sum of the prices of each individual item, they feel as though they are getting an amazing bargain, regardless of the reality of such. Even if all three items aren’t necessary for a customer, there is still a pull to purchase because doing so implies savings. This can effectively increase average purchase value; one case study saw an average boost of $12 per order in the first 15 days of implementing bundles.
In order to get the best bang for your buck, however, you can’t bundle just anything. There has to be strategy involved, pairing like items with values in the same ballpark as well as products that logically go together. For example, if you sell camping gear, pairing a sleeping bag with a halogen lantern and a cookstove can be a compelling offer for those stocking up on supplies. A pricey tent bundled with a low-cost flashlight, on the other hand, or a sleeping bag bundled with a chainsaw, will likely be less enticing. Think logically, and use sales history to determine which items are often purchased simultaneously to develop bundles that will resonate.
Move Stalled Inventory
Have some items with a long turnover or that are out of season? Bundling can help you fix that. By bundling inventory that’s hard to move alone, you’re more likely to make sales, clearing up storage space for more desirable products. When you bundle a struggling product with a best seller, you increase your chances of seeing movement, boosting turnover times and reducing the amount you’re spending to store merchandise that isn’t selling.
As with all bundles, it’s important to be strategic here as well. Bundling a poor selling product with a fan favorite can help you see growth, but two or more average products in a bundle may start to threaten your likelihood of selling. It’s certainly possible to go overboard when it comes to bundling, particularly if you’re creating unnecessary deals in response to dreams of higher revenue. At the end of the day, your bundles still need to offer value to your customers, regardless of the advantages to your business bank account.
Upselling can be an essential way to increase sales in your business, driving an estimated 4% of all retail sales online. Unfortunately, persuading a customer to make additional purchases is easier in a physical setting than a digital one. However, bundling can be the secret weapon you didn’t know you needed, encouraging a customer to buy more without getting pushy at the cash register.
Instead of selling a customer on the merits of a product, you can encourage an additional sale with the promise of savings. Product bundling allows you to add more diversity to your sales opportunities in a compelling way that can convince customers to buy more than they initially planned to purchase. This can be particularly important for customers on the fence about adding additional items to their carts; with a product bundle available, customers will spend less time considering items and more time actually buying them. Bundling can also encourage shoppers to branch out from the norm, urging them to try new items that could potentially trigger future sales.
Personalize the Customer Experience
Customers love a great bargain, as the multitude of savings sites on the web can attest. They also like feeling as though retailers are paying attention to their needs and working hard to meet them. Amazon began personalizing consumers’ shopping experiences in the late 1990s and tailored marketing has become important enough that some experts have declared that the static home page is “dead”.
If you’re not aware of the benefits a positive customer experience can have on your business, it’s time to pay attention: in retail, facilitating a superior customer experience can increase retention by 5% and sales by up to 25%. The opportunities you make available can significantly influence how and why customers enjoy their time shopping with you. Research has found that 90 percent of consumers find personalization appealing and 80 percent are more likely to make a purchase if they’re presented with customized offers. A compelling bundle at a good price point can make you a desirable destination, sending customers back to you rather than risk losing them to your competitors.
To nail the personalization factor accurately when bundling your products, be sure to gather information about your customers and their habits. Study individual preferences by monitoring searches and past purchases. Examine your sales to find out what products customers usually buy together. A/B test different bundle offers to find out which ones are most appealing. Make sure your inventory management system is sophisticated enough to adapt to different product configurations.
When you’re looking for a better way to move your business forward, taking advantage of bundling may be the perfect way to do it. Offering product bundles on your site can drive both interest and sales, giving your shoppers a deal they’ll subconsciously have a harder time denying.
As with all sales options, it’s important to be smart about the way you approach your strategy; poor bundling is potentially worse than no bundling at all, forcing you to showcase a confounding package that few, if any, customers will consider. By keeping products in a similar family and including an in-demand product customers want, it’s possible to increase the value of your inventory, improve upselling and inventory turnover, and do wonders for your customer experience.