You have often seen that telecom service providers give a television service with their internet service, grocery stores sell bundles of laundry items with bath items, and fast food chains give combos of burgers, fries, and drinks. So, the concept of giving bundles to customers is present everywhere. You will not find a single market or industry that does not offer bundles to their customers or clients.
The basic motive for offering bundles is to make the customers buy more products. As they buy more products, the average selling value automatically increases, and so does the profit. Now, product bundling is quite a popular concept among online stores to improve their sales. But this concept is often not understood properly. This throws hurdles in the way of the online store owners to take full advantage of product bundles. But you don't have to worry. In this article, we will see in detail what product bundling is, how it works, what are its types, and how this concept can help you get more customers. So, without any further due, let's get to it.
What Are Product Bundles?
If you are not clear about what product bundles are, then it is no problem at all. To keep things simple, a product bundle is formed by putting different products together (that are sold individually) and then selling them together as a combo. This is usually done for promotional purposes. But no matter what the purpose is, if you are selling some products together as one merchandise, it is called a bundle. What interesting to know is the fact that bundle is a product itself. The bundles can have their own identities like IDs, descriptions, and other features. You can also apply any other validation rules to a bundle that you do on a single product.
Why Are Product Bundles successful?
Product bundles are known to do very well for your business. But have you ever wondered what is the secret behind their success? Well, to put it straight, it is all because of the customer’s psychology known as customer value perception. If you notice, everyone opts to buy a product that they find useful or worth it to spend their money on. And when products are sold in bundles, customers think that it will save them money as they are getting them at a discounted price. In addition to this, bundled products are more likely to play with the customers' subconscious judgment. For example, when a customer is looking for different products, he will have to scroll through different pages, and it a hectic task. So, when they find several products of their interest bundled together, they make up their mind to buy them faster and more efficiently. Plus, they also think that they have got a bargain. The customer perceives that he is saving his money, and it is all convenient as well. Product bundles are used to take advantage of this perception and this is the reason behind their success.
Advantages of Product Bundling
There are multiple advantages of product bundling, some of which are the following.
- Bundling is always attractive to customers that are looking at a single product that is full of value and offerings. This will help your business in increasing its efficiency and reduce the total marketing and distribution cost. It will also help the customer to look at one place that offers several solutions.
- Product bundling can increase your profits drastically overtime. Being able to sell different products in one bundle means that you have less cost of acquiring a customer and in return you are getting a greater profit.
- It is a great strategy to target a large range of customers. Customers always look for deals and bundles of products that complement each other. You can offer discounts on your bundle, or you can choose not to. But selling products as a bundle itself makes your sales efficient, and you can take maximum advantage by gathering more customers.
Types of Bundling
In this bundling, the products that make the bundle are made available for purchasing only in the form of a bundle. The individual products are not made available to the customers for sale separately. Pure bundling is beneficial in the sense that it limits the options available to the consumer. As a result, there is always a greater chance of a fast conversion rate. A prime example of pure bundling would be the cable services offered by cable service providers. You have seen that different channels are made available to the customers in the form of bundles. The customers have to pay for that bundle in order to watch those channels. It does not matter if you are interested in buying only one channel; if you want to watch a particular channel, you will have to buy all the other channels in the bundle as well.
Mix and Match Bundles
Also known as custom bundling, mix, and match bundles are commonly used by brick and mortar stores. You have often seen that stores offer similar products in a bundle like a pack of 6 soaps or a pack of six beer cans. These types of bundles enable the customers to buy a similar product in bulk. This is a great strategy if you want to sell your single product in large quantities as the consumer will think that he is in charge of the buying. By noticing the price of a bundle of similar products, the customer will perceive that he is going to save money. This scheme is best used by online stores when they want to sell fast-moving consumer products that are available for a limited amount of time. This type of bundling can also be used for the items that can be bought in bulk quantities like T-shirts, Toiletries, and kitchen cleaning products.
New or Less-Known Products Bundling
In this type of bundling, you can use your famous or in-demand product and bundle it with your new or lesser-known product. In this way, the chances that the consumers of your popular product will notice your newly launched product will increase drastically. This type of product bundling is very popular among the online stores where they make use of the popularity of a particular product to flock in customers to buy their other products. This gives customers exposure to your new products, and the chances are that they might consider buying them as well. For example, if you have an online clothing store, you can bundle your popular T-shirt with a not-so-popular Cap.
In this type of product bundling, you offer your customers an upgraded version or a more expensive version of a particular product. This is a very common and effective marketing strategy. For instance, there is a customer that is looking at a laptop that has an older generation processor, but you have a new generation laptop. Now, this is an ideal opportunity to upsell and introduce the customer with the latest version of your laptop. It seems fair, right? Generally, upselling works by just introducing your upsell product. But you can boost up this opportunity by converting your upsell product into an upsell bundle.
You can say that Cross-sell bundles use the same strategy as used by the upsell bundles. The only difference is that in addition to offering the upsell product, you offer a combination of different other products that are somewhat related to the main upsell products. Let us take the same example where you are trying to sell your customer a latest version of the laptop. Now what you can do is that you can offer him/her a combo that consists of a laptop cover and mouse. If you manage to give a good deal to the customer, the chances are that he will opt to buy the cross-sell bundle instead of only buying the upsell product. As a result, you will make a sale that would not have been possible if you did not offer the cross-sell bundle.
Necessity or Occasional Bundles
In this type of bundle, you offer different products in bundle based on basic needs, celebration, season, or occasion. It is a common marketing technique used by most of the online stores. You have often seen special bundle offers on the occasion of Christmas and Halloween, where the stores take advantage of a limited period and introduce their products in different bundles. You can also offer bundles based on different human needs, for example, you can offer a Power-bank when making a sale of a smartphone.
Old or Excess Inventory Bundling
Being in the selling market, you would never want excess or slow-moving products in your inventory. They will not only occupy the useful space of your warehouse, but they also do not generally make much capital and hold you up from investing in other potential products and promotional strategies. So what should be done? A good solution would be using product bundling as it will help you to get rid of the unwanted stock from your warehouse by getting good profit. If you are having problems with selling any particular product or if a product is not much in demand, you can pair it with fast-moving merchandise. Let's suppose if your chili-garlic sauce is not selling that much, but your ketchup is doing great in the market, you can pair up both and sell them as a bundle. In this way, the customer will buy your slow-moving product in an attempt to get your fast-moving items.
Gift Set Bundles
Gift Set bundles are a great way to sell your products. Let us see how. Choosing a gift is often very confusing. People try to take advice from others that what should they buy. This is where your gift set bundles come into play. When shoppers are looking for the best gifts for their loved ones, friends, or relatives, introduce them with tempting gift set bundles. Everybody wants to buy the perfect gifts, and people tend to believe that giving more items as a gift will make the receiver appreciate the gift more. Gift Set Bundles are usually made available during holidays when everybody is in the mood of giving gifts.
Buy X Get Y (BOGO style bundles)
Buy X Get Y is one of the most efficient product bundles. In this type of bundling, shoppers are given a discount or a free item when they purchase a full-priced product. This type of bundling is usually used to sell a one-time use product like a hair-dryer or shaving machine. These types of products are usually very pricey and slow-moving. And as you know that the buyer is not going to return to buy such kind of products, you can encourage the customer to buy that product by pairing it with a free item or a discounted product. A good example of such type of bundling would be, that your store sells books but nobody is buying a backpack, you can create a bundle like "buy X books and get Y% discount on a backpack.”
In this article, we gave you an overview of what product bundles are, what are their benefits, and then we discussed different types of bundles. Now it is up to you to decide that either you should bundle your products or not. But before you do that, you need to ask yourself some questions, like whether you will be able to afford the bundling? Are you ready to support the product bundling that you will create? Do you actually have a demand for the products that you are going to bundle? After answering all these questions, you will be able to clear up your mind about what type of product bundling will suit your business.