The festive season is one of the most crucial periods for eCommerce sellers to make sales. In eCommerce, there are multiple strategies and techniques that you can use to stay ahead in the game, one of which is marketing bundles.
Product bundling and marketing product bundles are proven strategies for boosting sales and enhancing revenue, giving eCommerce businesses a competitive edge. By understanding and implementing effective bundle marketing techniques, you can attract more customers and improve their overall experience with your brand.
In this article, we’ll explore how bundling marketing works, its benefits, and how it can drive customer satisfaction and loyalty.
What Is Product Bundling?
You must have come across this marketing strategy many times while shopping online. Product bundling might seem like a simple marketing tactic, but it’s based on strategic reasoning. When done right, bundling products together can help you boost your profits by encouraging customers to buy more in one go. But what is a bundle in marketing?
A product bundle combines multiple items or services into a single offering, with the products typically complementing each other. This marketing strategy groups two or more items under one SKU (stock-keeping unit) code, often discounted, to encourage customers to buy more than they would if purchasing each item separately.
Product bundling boosts sales by making it easier for customers to purchase related products together. These bundles are displayed prominently in physical stores or featured on eCommerce websites, simplifying the buying process. Presenting items as a package can increase overall sales and maximise the ROI of inventory that may sell poorly individually.
Understanding Examples of Product Bundling
Let’s look at an example to make this easier to understand. A personal care brand could create appealing bundles by offering a body lotion alongside a subscription service for automatic refills. Alternatively, the brand might assemble a comprehensive product bundle that includes body lotion, face pack, lip balm, and other personal care essentials. This approach helps increase customers’ convenience and encourages them to purchase a range of products at once, boosting overall sales and customer satisfaction.
Here is another example of an ecommerce bundle marketing.
For example, you might sell a “Cosy Winter Set” with a soft, knitted scarf, warm gloves, and a matching beanie. The scarf is the central item, providing warmth and comfort, while the gloves and beanie complement it perfectly. Together, they create a cohesive set that’s perfect for winter weather. Customers are more likely to buy the bundle because it offers a complete and coordinated winter accessory solution, making it easier to stay warm and stylish.
You can create a “Festive Movie Night Bundle” during the holiday season. This may be a set of holiday-themed mugs, a cosy blanket, and various gourmet popcorn flavours. This package would be a thoughtful gift or special treat for anybody wishing to spend a laid-back evening with loved ones.
During this festive period, you could create a special bundle featuring a beautiful idol, a set of traditional diyas, incense cones, and a selection of premium dry fruits. This thoughtful combination offers everything needed for a joyful celebration, making it an attractive option for customers looking for meaningful gifts. Such a bundle will surely be a hit and sell quickly.
Types Of Product Bundling
Product bundling is a versatile strategy that helps drive sales and improve customer experience. Here are the main types of product bundling:
- Pure Bundling: In pure bundling, products are sold exclusively as a bundle. This means that the items within the bundle are only available together and cannot be purchased separately. This approach often provides unique value by offering products that complement each other.
- Mixed Bundling: Mixed bundling combines products that are available individually but are offered together at a discounted price. This type of bundling encourages customers to buy the bundle by providing added convenience and cost savings compared to purchasing each item separately.
- Price Bundling: Price bundling involves offering discounts or added value when customers buy items together. This can include discounts on the total price or special offers like Buy-One-Get-One (BOGO). Bundle pricing marketing creates a sense of value and encourages customers to purchase more items.
Benefits Of Product Bundling
Here are several benefits of product bundling that can work wonders for your business:
- Increase Sales and Revenue: When you bundle products together, you offer customers an attractive deal, often encouraging them to purchase more. It’s a great way to boost sales and revenue because people are drawn to getting more value for their money.
- Clear Out Inventory: Bundling helps you move older or less popular items by pairing them with products that are in higher demand. This can help you clear out inventory that might otherwise sit unsold.
- Create a Sense of Urgency: Special deals and bundles can create urgency, prompting customers to buy before the offer expires. This can drive faster sales and help you reach your goals more quickly.
- Build Brand Loyalty: You can enhance customer satisfaction and loyalty by offering great value through bundles. Customers who feel they’re getting a good deal are more likely to return and buy from you again.
- Enhance Customer Experience: Bundles often include complementary items that customers need, reducing the hassle of buying each item separately. This makes the shopping experience smoother and more enjoyable for them, potentially giving you loyal customers.
- Reduce Decision-Making Stress: Bundling simplifies choices by grouping related products. This means you don’t have to worry about whether different items will work well together—everything you need is included in one package.
- Move Stock Quickly: If you have slow-moving inventory, bundling it with popular items can help accelerate sales. This approach uses the popularity of the main product to drive sales of the less popular ones.
- Expand Your Market: Bundles can attract customers who might be hesitant to buy expensive items independently. Offering discounted bundles can appeal to a broader audience and increase your market reach.
- Create Positive Impressions: When you offer a bundle that includes a free or discounted item, customers see it as a better deal than buying the products separately. This can enhance their perception of your brand.
- Save Time and Marketing Costs: Bundling allows you to market a single package deal instead of multiple items. This makes your marketing efforts more efficient and can reduce your overall marketing costs.
How To Make Product Bundling Work?
Follow these steps to create the best strategy for product bundling marketing for your online business:
Understand your Buyers and the Market
Like any other marketing strategy, clearly understanding your customers is essential. Before creating your marketing bundle, gather current data on customer preferences across various demographics. This should include insights into the type of advice or information your customers find helpful when deciding what to buy. Like:
- The sort of deals they’re looking for
- The amount of money that they would be willing to spend
- What products do they purchase simultaneously
- Which products are customers willing to pay a bit more for?
- Which items would offer them the best value when included in a marketing bundle?
For the market, find out the:
- Competing bundle offers and their pricing
- The estimated demand plus the marginal cost
- The supply-chain structure
- Possible risks
With this data and your goals, you can make the offer benefits for both the buyer and the seller as possible.
Learn How to Offer the Discounts Effectively
Ensure that your offered product bundle is as prominent to the buyer as possible and that its benefits are clear. You can achieve this by highlighting the benefits of purchasing the bundle instead of buying the individual items. Keep in mind that the buyer may not need everything in the bundle, so it’s important to show them the added value or savings they get by choosing the bundle. Still, your discount may encourage them to pick the bundle anyway. This goes alongside the complementing products. They really must be a great combo.
If this is not done carefully, you may be unable to sell anything.
Psychological Aspect of Pricing
Bundling your slow-moving or less popular products with the best-sellers is a smart strategy for both the seller and the buyer. The trick is ensuring the offer is irresistible and satisfies the customer’s needs. When customers feel they’re getting good value, they’re more likely to leave satisfied and return for future purchases. They will spread the word.
Calculate the Price
To calculate the bundle price for your products, follow these steps:
Determine Gross Margin for Each Product
- Use the formula: Gross Margin = Ticket Price – Cost of Goods Sold (COGS)
- This helps you understand how much profit you’re making on each item in the bundle.
Calculate the Bundle Subtotal
- Add the ticket prices of all the products in the bundle to get the bundle’s subtotal before any discounts.
Apply a Discount (Optional)
- If you’re offering a discount, apply it based on your average margins:
- For average margins of 50% or higher, offer a discount of 10% to 20%.
- For 50% or lower margins, a discount of 5% to 10% works best.
Test the Discount
- Monitor your chosen discount’s performance over time and adjust to optimise sales while maintaining profitability.
Name Your Product
When naming your product bundle, highlight the key benefit it offers your customers. A name that communicates the bundle’s value can capture attention and make it easier for customers to understand why they should buy it.
For example, instead of just naming it after the products included, you could use descriptive names like:
- “Glow & Hydrate Kit” for a skincare bundle focused on achieving radiant, moisturised skin.
- “Ultimate Travel Essentials” for a travel-friendly set of must-have items.
- “Cosy Winter Comfort Set” for a bundle that brings warmth and relaxation.
This approach clarifies the purpose of the bundle and helps attract customers looking for those specific benefits.
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Conclusion
To effectively run bundle marketing, it’s important to have current data on your potential customer’s needs and a solid grasp of the market trends. This helps you create bundles that truly appeal to your audience and stand out in the market. Knowing what your audience wants allows you to create product bundles that resonate with them, making your campaign more effective. Awareness of current market trends can help you stay competitive and position your offer in a way that stands out. When done right, especially during high-demand periods like the festive season, a well-planned bundle campaign can be extremely beneficial for your business, driving higher sales, enhancing customer satisfaction, and boosting your brand’s visibility.
