What Is Product Bundling?
The Ultimate Guide to Product Bundling Strategies
If you're doing it right, product bundling can be an incredibly effective marketing technique. However, before you decide on your bundling strategy, you first need to figure out which of the three major product bundling makes the most sense for your business and your customers.
These are pure bundling, mixed bundling, cross-product bundling, and new product bundling. Let's take a closer look at each!
What Is Meant by Product Bundling?
Product bundling combines two or more products or services into a single package that can be sold at a lower price than what the individual components would cost if sold separately, thereby increasing your average order value. It's also known as bundled marketing, product packaging, product coupling (or even simply bundling).
Even though the concept isn't new, it remains one of the most effective methods companies use to encourage customers to buy multiple products and spend more than they intended.
If you're smart about how you utilize this type of discount pricing that often displays featured products, it can be an extremely effective tool for your business.
The Benefits of Product Bundling
Bundle pricing is a great way to introduce new products to your collections without worrying about price resistance. Below are some benefits associated with this marketing strategy:
Generate More Sales
Another advantage of product bundling is that it allows you to create more revenue from the same number of products by simply putting them together. Imagine that you own a furniture store and want to get rid of some inventory.
You could bundle two sofas with a side table, chair, ottoman, rug, and lampshade - giving your customer everything they need for their living room at one price point instead of having them come back later to add things up individually.
Save on Marketing and Distribution Costs
Product bundling also saves you time and money when marketing and distributing each product. Rather than running separate ads for both TVs and speakers, you can advertise one bundled set with the combined marketing costs being cheaper for both parties.
And since there's less time spent transporting items individually from warehouse to warehouse, there's also less risk of breakage, which means fewer returns.
Simplify Customers Experience
One important reason to consider product bundling is that it simplifies customers' experience. When someone buys something they're familiar with, they know how to use it and don't need much information from you to get started.
But when buying a bundled package, even if the buyer has never heard of either item, there's still a sense of comfort in knowing what will happen once they get home.
Speed-Up Inventory Clearance
Managing inventory is a major responsibility for E-commerce businesses. It is possible to better manage inventory by bundling products like the I'm So Fly I Neverland - White/Gray Baby Onesie with the BAHSTON / Boston Inspired Ringer Onesie.
Combining top-selling products with less popular items with a large inventory can increase the appeal of a package.
It is also effective to package certain quantities of a dead item at a reduced price that still generates a profit. Bundling this product exclusively for past customers will increase its sales.
The Different Types of Product Bundling Strategies
Product bundling is a marketing strategy that offers two or more products for a lower cost than if you were to buy them separately. There are four different types of product bundles:
With pure bundling, customers are not given a choice to purchase only certain parts of the bundle but only the entire bundle as one unit. This tactic limits customer choice because there is no option to mix and match the included items.
Unlike pure bundling, mixed bundles let customers choose which items they want in their bundle. However, these items are still grouped into one package. An example would be cereal and milk as part of your morning breakfast bundle.
Although they may have been bought separately before, they make up a complete breakfast that can be purchased at a discounted price when bundled.
New Product Bundling
Using this approach, a new product is often combined with one or two popular products, and a new set of consumers is reached. E-commerce stores combine new and well-known products to gain exposure to their newest items. The existing products bring the buyer closer to the new ones.
This method works well with lower-priced items or accessories. A case for your iPhone might be an excellent addition to your purchase. You could sell the phone along with the case as a bundle.
Gift bundles are groups of complementary products aimed at shoppers who want to give someone something special beyond a typical gift. These bundles are usually packaged and sold during the holiday season.
The Psychology Behind Why Product Bundling Works
The idea behind this marketing strategy is that customers are more likely to purchase a bundle when they perceive it as an exceptional value than if each item were sold individually.
Product bundling is a marketing strategy that can help you make more money by selling two or more products. It influences subconscious purchases in fashion-related E-commerce.
For example, a Pimps Don't Cry / Basic Onesie bundled with a matching bib, socks, and a cap will be more desirable than buying these items individually. It is unlikely that your customers will haggle over price points with you because they feel like they are getting a better deal. You may even find that your customers spend more than they would have without the bundle.
Which Products Can Be Bundled?
A product bundle can consist of any number of products; the only limit is your imagination. However, ensure that you have enough of each product so that one will sell even if the other does not.
Once you know what products can be bundled, it's time to decide how they should be packaged. This decision will depend largely on which products you're offering.
Why Do Teams Use Product Bundles?
Some teams use this technique as a sales incentive for customers, but it can also be used to simplify and streamline the purchasing process.
For example, if you're buying a new suit from a department store, you'll probably be offered an option to purchase the suit with matching shoes, underwear and socks all at once in one bundle. This way, you don't have to spend time shopping for each item.
What Is the Goal of Product Bundles?
Product bundling can be used to get customers to buy products they might not have otherwise or to make certain items seem more desirable when paired with others. It also saves the customer money as they will only need to pay one shipping fee instead of two or three.