Product bundling, or the act of selling complementary products as sets, has long been an effective method for increasing revenue. Not only does bundling help retailers upsell products, it also makes for a good strategy for cross-selling. There are three main types of bundling:
- Pure: Selling bundle-exclusive items.
- Mixed: Combining products sold separately at a discounted price.
- Price: Choosing specific items that customers must purchase together to obtain a discount.
Although product bundling is an extremely simple tactic, it can work wonders for your business when done right. Here are some of the benefits that you can reap from using bundling as part of your sales strategy.
Increases your average order value (AOV)
Since product bundling essentially combines multiple products into a single unit to offer discounted pricing, customers will inevitably feel as if they’ll get more value purchasing bundles rather than separate products. In turn, this incentivizes your customers to spend more than they initially would have, which then increases AOV. Of course, you need to be able to take the necessary steps to ensure that your business remains profitable despite offering some attractive discounts through bundling.
Can help you introduce new products
A good rule of thumb for creating bundles is to include a popular product among customers. But an underrated strategy is to include another product with it that you want to further showcase or promote – say, a product that you feel doesn’t get as much attention. This way, you could potentially increase your customers’ interest in other products.
Can help you clear excess stock
Have some merchandise that hasn’t been sold in quite some time? You can include them in your bundles to clear them out. Similar to the previous strategy we discussed, you can pair these items with faster-selling products in order to get rid of them and optimize your inventory.
Conclusion
Overall, product bundling is a versatile and effective sales strategy that can benefit retailers and customers alike. By offering bundles of complementary products, retailers can increase their AOV, promote slower moving products, and clear out excess inventory. However, it’s still important to create bundling strategies in accordance with data, so that you can ensure that your bundles are tailored to the needs and preferences of your target market.