How to increase your conversion rate with successful product bundling in 2022
by Irina Ciutaco
June 29, 2022
What are the Benefits of Product Bundling?
Bundling is essential for customers, as it offers a value-oriented sale with complimentary benefits. Bundling is a single source which offers several solutions for customers with a minimum of effort, by getting a maximum benefit. Moreover, let´s see how bundling can be beneficial for your business in the long haul:
1. Boost sales
The most important benefit of bundling is that it can boost your overall sales, known as the critical metric in measuring your eCommerce success and growth. An eCommerce manager can manage the sales revenue and conversion rate just by increasing the amount spent on a specific transaction. If you combine your products, your customers will buy more than one product with a single purchase. Nevertheless, product bundling is another way to sell less popular products with best-selling items. This will benefit the vendor and it will create a long-term opportunity for add-on bundle sales while you get more products in a customer´s cart.
2. Increase the average order valueThe consumer surplus is the difference between the original price and the customer´s payment. Product bundling is the effort to capture the surplus, increase sales and get the average order value from just one transaction.
3. Save marketing and distribution costs
Moreover, product bundling will make a significant difference in your marketing and distribution areas. For example, showing a bundle to your customers will make you save on your marketing costs, instead of making individual print and web ads for every item. Furthermore, if you are packaging different items collectively, you require only one bin instead of different bins for storage. Bundling helps you ship a few boxes of single items and saves money on postage of products.
4. Enhance customer experience
Furthermore, product bundling can ensure a personalised customer loyalty program. To accomplish that, you should check out the customer behaviour of your regular customers and explore their favourite products. Nevertheless, you can create a suitable product mix, according to their intent, which will provide customers with an opportunity to select products and services to accompany their needs. Moreover, you can support your customers to add, remove and edit products to make the final result more appealing. In case you design your bundle based on their needs, this will help your customers find it easier and acquire everything in a minimum amount of time. Therefore, the customer´s shopping experience will be smoother and without any hassle, while encouraging them to stick to their brand.
5. Diminish inventory wasteThe leftovers in the inventory will be the dead stock, which will add to your cost and be considered a waste. This will be nevertheless a good chance to use product bundling to finish the dead stock. In case you pair a less trending product with a product which sells faster, customers will be willing to buy it.
The enhanced order value refers to the value that a customer adds to the goods that you are providing. Bundling products will create a perception of a higher value and in this way, the bundle will be perceived as a better deal while the additional products will be featured and the customers will be interested in but ignored due to the cost.
1. Search for the most and least sold products
As we have seen above, one of the most important benefits of product bundling is selling the least sold items, cutting down the waste and removing the inventory. You will do that by tracking the revenue from your most trending products and SKUs. Nevertheless, these metrics will let you know which products your bundles should be accompanied with. As time goes by, you can verify which products aren´t selling and use them as a reciprocal product with your most selling products.
You will identify which product is performing the best in your inventory and you can compare it with other products in your stock. The profit of your SKUs will help you to divide your campaign costs and finalize the profitability from a specific item.
The growth of a specific item will acknowledge the average order in the last year, only by using in your current inventory and product bundling plan. You might as well understand the idea of a product´s yearly growth and performance. By identifying these statistics, you can track the product´s sales and better design your bundle. Furthermore, you will finalize it if a product will be sold well, while you can combine it with a less sold product and anchor the optimal product bundle.
Product bundling is by far the most trustworthy and popular method to sell offline and online goods. Certainly, eCommerce managers should develop interesting product bundling methods and strategies which make them more interesting to potential customers. With product bundling, you can sell items for less and increase your average order value. If done correctly, offering a product bundle is the most effective way to boost sales and improve customer satisfaction at the same time.
Posted by: Irina Ciutaco