Bundled Product

What is a Bundled Product?

A bundled product is a package of two or more stand-alone products sold together for a single cost. In most cases these products are complimentary units sold together to increase consumer interest and sales.

The key concept to understand is that each product in a bundle can be broken away from the set and sold on its own. These units are most commonly called stand-alone products because they are fully functioning products by themselves and can be sold separately to the consumer.

What Does Bundled Product Mean?

Product bundles are several individual goods or services that are sold to consumers as one combined package. Sometimes called “package deals,” product bundles are generally made up of complementary items or, less frequently, similar items. When retailers offer multiples of the exact same item, this is generally referred to as a “multipack,” not a product bundle (1). Examples of product bundles would be a fixed-price meal at a restaurant or a beach kit that includes sunscreen, sand toys, flip flops and towels as one saleable item.

Some retailers only sell certain inventory items as part of a product bundle rather than offering them as either individual or bundled items. For retailers who sell the same items both individually and as part of a product bundle, the bundle tends to cost less than if a customer were to purchase those items individually. Making the savings explicit is one way to entice the user to purchase the bundle, though they might have intended to only purchase a single item on the site.

Bundles may be marketed as distinct items at any point in the online shopping experience, including the homepage. Or they can be automatically generated by online tools when a customer tries to complete the transaction, as in an “add this and save” promotion offer.

Product bundles can be especially popular with customers who appreciate the bundle’s discount. They also appeal to customers who value speed or simplicity over the ability to tailor their product options.
For online retailers, product bundles are appealing for several reasons:

  • Bundling can effectively increase average order value, by selling more without incurring higher transaction costs.
  • Bundling makes it harder for customers to price-comparison shop and bounce to the site with the absolute lowest price point.
  • Bundling can encourage cross-selling if the product bundle includes items from new categories

Which Products Can Be Bundled?

When considering which of your products to bundle, the best approach is to add goods that complement one another or can be used together, as was true for Nintendo’s consoles and games package. Your product bundles have to make sense, so if you’re selling a computer, you’d be wise to include something like a free USB cable or screen cleaner.

Another practical tip is to find out what customers want directly from the customers themselves. This is especially important within ecommerce, since bundles can help you outshine your competitors.

With the help of customer data and product performance analytics, you can see what products a person is buying. Moreover, you can even track the different products they frequently purchase to learn which products might make sense together in terms of cross-selling.

If you notice Shopper A bought a bottle of shampoo from your store, and they ordered a hair spa treatment you sell, this data shows you can successfully bundle these products together. To leverage this data further, find something that allows you to incorporate full-suite ecommerce analytics to provide better insights, and to measure the full performance of your A/B tests.

Types of product bundles:

There are several different bundling techniques which are used to group products:

  • Pure bundles
  • New product bundles
  • Mix-and-match bundles
  • Cross-sell bundles
  • Gifting bundles
  • Inventory clearance bundles
  • Buy-one-get-one bundles

Pure bundles

In pure bundling, the individual products that make up the bundle can be purchased only as a bundle and not as standalone products. This technique limits the choices offered to the consumer. For example, HelloFresh is a company which does pure bundling successfully. It bundles the ingredients that their customers need to cook a healthy meal. They offer meal options based on the number of people and recipes the customer requires each week, but they don’t allow you to choose the ingredients as individual items that can be bought separately.

New product bundling

In this technique, newly-launched products are grouped along with existing or popular products as a promotion to help customers discover your latest product. This method is used by ecommerce stores, which mix new products with their well-known merchandise to gain some exposure for the new product. The more well-received the existing product is in the market, the more it brings the buyer closer to the new product. For example: The Nintendo switch + the legend with Zelda product bundle, is one of the fast-selling Nintendo’s bundle, in this bundle Nintendo introduced their brand new games which is grouped together along with their existing best selling products. This bundle offers an unique Zelda carrying case which is available with this bundle exclusively and two brand new games (Breath of the wild and Super Mario Kart) along with the accessories for gaming.

Mix-and-match bundles

The mix-and-match bundling technique allows the customer to choose among multiple similar products. This is mostly done by brick-and-mortar stores for fast-moving consumer products such as perishables or bulk items. Here, you specify a few products for your customers to choose from and they can create their own custom bundle from the options available. This method helps the customer feel that they’re in direct control of what they want to buy, thereby increasing the perceived value of the item. It’s the perfect method for encouraging your customers to buy products in bulk without forcing them to buy items which don’t interest them. For example, some retail stores offer a deal where you can match complementary pieces of clothing from an array of choices for a fixed price, such as any shirt along with any pair of trousers for $50.

Cross-sell bundles

In this bundling technique, retailers sell a complementary product as an add-on to a main product. This type of bundling works well with lower-priced items, or accessories or parts that go with a more expensive item. For example, if you buy an iPhone, you would probably like to buy a case along with it. So the iPhone and case can be sold together as a bundle.

Gifting bundles

Gift bundles are aimed at shoppers who want to give a bundle of complementary products together to a loved one. This type of bundle is mostly sold during holiday seasons. For example, beauty brand Estee Lauder offers a popular protect-and-hydrate gift set containing four skincare products that work together.

Inventory clearance bundling

In this bundling technique, you pair a faster-moving item in the inventory with a stagnant or slower-moving item to clear inventory space and decrease your inventory holding costs. This method includes discounts on your bundles so that shoppers who are interested in a top-selling item will see the whole bundle as a bargain and will be more inclined to buy it. For example, the popular specialty tea retailer T-WE found out that their tea accessories were selling faster than their teas (which was unfortunate, because the teas offered a higher profit margin). So they started to bundle their teas along with the accessories so that they look like more of a deal.

Buy-one-get-one bundles

This bundling is used when you buy one main item, you can avail a discount for another complimentary product or get another product free. This is a best used technique for one time purchase products For example, electronics, if a customer buys a hair dryer they wouldn’t be coming in to buy the same product again. Hence, offering a complimentary product, discount or gift card will encourage your customers to add more items to their carts at a lesser price.

Bundling adds value to your products by adding extra features or products to your existing purchase. You can tailor your product offerings according to the preference of your customers to align with their wants. Offering unique and carefully curated bundles can help you stand out in comparison with your competitors. It clears out your aging inventory, increases your items’ perceived value in the eyes of your customers, and boosts sales.

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