How to bundle your way to higher e-commerce profits
You can boost your e-commerce sales tremendously by offering your customers added value through product bundling – find out how.
By Laura Gayle, Business Woman Guide
Product bundling is a great strategy for companies looking to boost their online sales. It makes customers feel like they’re getting more value for their dollar while it helps businesses upsell complementary and related products to keep their inventory moving. If you’re looking to bundle your way to higher e-commerce sales (and higher customer satisfaction), here are some steps you can take.
Focus on personalization
Back in the late 1990s, Amazon pioneered personalization techniques that forever changed the dynamics of e-commerce. Today, customers expect customized experiences such as recommended products based on recently viewed items. Some even suggest the static home page is “dead” because that’s how important interactive and personalized marketing is in modern e-commerce.
Recent research suggests the majority of consumers, 80 percent, are more likely to make a purchase if they are presented with personalized experiences. The same research found a whopping 90 percent of customers find personalization appealing. That being the case, you definitely want to accurately nail the personalization factor when bundling your products to reach your objective to boost sales.
To accomplish successful personalization you’ll want to:
- Target and define your audience
- Learn about individual consumer preferences via searches and purchases
- Track what products customers tend to buy together
- Include your own expertise and experience
- Prepare appealing bundles
Once you compile the right data, you can present product bundles as suggestions tailored to each customer based on what you’ve learned. Statistics show retailers that implement personalization are rewarded with 6- to 10-percent sales gains, which equates to two to three times faster than those retailers who don’t. Add bundling to the mix and the possibilities are likely to go even higher.
Tactically bundle your products
When bundling your products, it helps to tailor the choices presented to customers based on their individual preferences – but you also want to keep these limited. To make a successful sale, it’s best not to overwhelm customers with too many choices; just give them enough options to make your offer easy and appealing. Believe it or not, customers love it when you make suggestions.
You can use a number of bundling techniques to increase sales. Some approaches you can consider include:
- Bundle less popular products with high sellers at an attractive price. This is a good way to eliminate goods that aren’t selling well before they turn into dead stock.
- Conduct A/B tests to find the most appealing product combinations. Comparing how different bundles perform will help you understand what your customers want.
- Combine useful products together and shave off a few dollars to offer a package deal. Consumers are often grateful when you save them time looking for complementary items.
- Let buyers build their own bundles. In some cases, you can present a flexible bundle of products – for instance, letting the customer choose three from a total of six items to get a customized discount.
- Combine overstock with a high-selling product and offer it at a discounted price.
- Offer a “buy two, get one free” type of deal. Discounts are popular, but “free” really tends to grab the consumer’s eye.
- Use pop-up suggestions to show customers related products that either complement or are necessary to use in conjunction with the originally selected product.
Once you determine the options that are most likely to appeal to your customers, you’ll want to give them an easy way to add bundled items to their carts.
Offer a true discount
Be sure to offer customers a true discount. Today’s shoppers are pretty savvy and many will spot a fake deal a mile away. You don’t want to try to pull one over on them by presenting them a bundle that doesn’t give them a financial benefit. Otherwise, you could end up losing customer confidence. A quick sale is definitely not worth the loss of a loyal customer.
To successfully implement a good bundling strategy:
- Increase perceived value
- Make the purchase highly convenient
- Focus on being helpful
There is much to be said about the benefits of bundling and the psychology associated with customer value perception. Offering these low-pressure deals yields big benefit for businesses.
Artificial intelligence and mobile technologies
Artificial intelligence (AI) and mobile both enable you to increase the level of personalization you offer your customers, however, these two technologies are going to be playing such a large role in the future, they deserve a mention of their own. Product mixes have always existed, yet the Internet created an entirely new playing field. Marketplaces are literally global, significantly increasing competition. E-commerce retailers need to find ways to give customers the same feel-good emotions they receive when they deal with a caring salesperson. AI can help fill the gap.
AI has worked its way into e-commerce, giving merchants the ability to use consumer behavior data to really zero in on what each customer wants, and predict their behavior before it happens. Retailers can then take this information and use it to create eye-catching bundle deals to offer their customers.
Mobile also can no longer be ignored. Retail e-commerce sales hit $2.3 trillion in 2017, and the mobile share of that was $1.4 trillion, or about 59 percent. Forecasts show mobile is poised for continued explosive growth. Businesses that sit on the fence or avoid investing in mobile-friendly websites and/or apps are going to be left behind the competition. If you find ways to draw customers into bundled offers via mobile, you can’t go wrong. Shopify highlights some good mobile options.
On the fulfillment side of things, bundling products effectively may require upgrading your inventory management techniques. With modern inventory software, you can sell your bundles while keeping track of your inventory levels across individual SKUs.
Bundling is a powerful approach to boosting online sales, increasing average order values and helping you turn your inventory over faster. Once you figure out which deals are most likely to catch your customer’s eye, you should see a nice difference in your bottom line.