As a DTC business, we know one of your top priorities is getting the most out of every purchase by increasing your average order value (AOV). One of the best strategies for encouraging your consumers to buy more of your inventory is product bundling. An effective product bundling strategy makes shopping easier for consumers while also giving your audience the perception of getting more for less.
When it comes to your eCommerce business, there are multiple reasons why implementing a bundling component will help boost your brand — and with Smartrr, there’s no need to go looking for a separate bundle app. With the ability to enhance your subscription program through personalized build-a-box-like offerings, bundles enable you to add customization and variety to your consumers’ recurring purchases all while increasing your revenue.
We’re exploring some of the key product bundling benefits and strategies for your Shopify brand, as well as why Smartrr’s Bundle Builder is the best tool to support your efforts.
Product bundling works by grouping individual products together and selling them as a single package. For those of us who went to McDonald’s as kids and are deeply familiar with Happy Meals — that’s one of our favorite examples of product bundling. Now that we’ve pointed this out, you’ll probably start to see bundling strategies across many fast-food restaurants.
Bundles are appealing to subscribers because they are typically offered at a more reduced price than if the consumer had purchased the individual items separately.
What often ends up happening is consumers buy more than they would have had they purchased the items on their own because of a psychological phenomenon known as customer value perception. Because consumers feel like they’re getting more for a lower price, they’re willing to spend a little extra to get the bundle offer.
Pure bundling refers to products that can only be purchased as a bundle and not bought individually. While this can be used effectively, we’re big proponents of giving subscribers the freedom and flexibility to engage with your product offerings however they see fit — so we’d recommend proceeding with caution with this strategy.
Mixed bundling is the opposite of pure bundling and refers to selling items together but also allowing them to be purchased separately outside of the bundle.
This form of bundling puts the power into the hands of the consumer and allows them to create their own bundle from scratch. This strategy can be a great way to imbue personalization into your bundling experience and further delight your subscribers
With this technique, recently-released products are grouped with well-known products in an effort to have these new products gain traction.
Cross-sell bundles usually involve adding a lower-priced complementary item to a higher-priced main item. This type of bundling is typically offered as an add-on at checkout. The common example here is a customer getting offered a phone charger after buying an iPhone.
It’s also worth noting that many brands will sell and market gift bundles, which are variations of other bundles that are specifically targeting buyers who are looking to give presents. Gift bundles are usually popular because they increase the likelihood that the gift recipient will like the gift (because giving more means more things to like!). These gift options are usually popular around the holidays and Valentine’s Day.
Before you’ve convinced yourself this isn’t for you, let’s quickly dispel a common myth: you don’t have to be a build-a-box brand to offer product bundling. Even if it doesn’t end up being one of your core offerings, so long as you have at least two complementary products, you can utilize and benefit from product bundling for your online store.
Glad we cleared that up.
Let’s dive in.
This benefit is a bit of a paradox that really works in your brand’s favor.
One of the clearest benefits of bundle pricing is increasing your AOV — and the primary way this works is by incentivizing your consumers to buy more (at a reduced price) than they’d originally intended on buying.
Say your consumer is planning to buy shampoo for $5 and you also sell conditioner for $5. By offering them a product bundling option of both shampoo and conditioner for only $7, your subscriber feels like they’re getting significantly more for only $2 beyond their initial budget even though they’re leaving with different products than they expected to buy. Your profit margins spike, their sense of savings spikes — and it’s a true win-win for everyone.
Plus, by getting your subscribers to engage with more products, you’re increasing the likelihood that they’ll love and start to rely on your brand — thus boosting customer retention and brand loyalty.
66% of consumers have expectations that brands should understand their individual needs. Bundles are an excellent way to illustrate this to new customers and loyal subscribers alike, especially if you leverage your subscription data to determine popular products that typically get purchased together.
In addition to meeting subscribers’ needs, by grouping related products together and selling them at a discounted price, you can delight subscribers with the precise products they were looking to buy and offer them meaningful savings at the same time.
These little positive touchpoints will ultimately result in a stronger customer experience and better customer loyalty for your subscribers.
If you’re having trouble selling some inventory individually, the ability to sell these items by grouping them in a bundle with more popular products is a big benefit of product bundling. We’ll discuss some specific strategies around pushing less-popular inventory in a bit; there’s definitely an art to it.
🧠 Smartrr’s Bundle Builder: While we’re on the topic of inventory management — we know inventory reporting with bundles has traditionally been a big pain with 3PLs. With Smartrr, you can set your bundles up as Custom Attributes or Line Items. This means you can either opt to send your 3PL a single product SKU with custom attributes or individual line items for each product in your bundle. By being the first subscription app to prioritize post-purchase inventory reporting, we’re helping you strengthen your overall business operations and minimize any headaches.
Human psychology once again plays a huge part in how brands develop marketing strategies and create deals. Just as bundles can make people feel as though they’re getting a great deal, they can also prevent your buyers from feeling ripped off — even if the amount of money they pay stays roughly the same.
Here’s a commonly-used example:
If you pay $750/night for a fancy hotel that then charges you $10 for a bottle of water, you’ll likely feel cheated and annoyed. However, if the hotel bumps the price of the room up to $760 and includes a complimentary bottle of water, that discomfort goes away — even though you’re ultimately spending $760 in both situations.
If people tend to view some of your less-expensive products as “bad” deals, they could be a good candidate for bundling. Your consumers will still feel like they’re getting more for less, and you’ll be able to mitigate any negative feelings about the individual cost of each item.
Approach this pricing strategy for your eCommerce store with caution. The best product bundling strategies involve true savings for consumers, so you don’t want to bundle products for the sole purpose of hiding the cost of individual items. We’ll talk about specific ways to leverage this reality without abusing the bucketed price of bundles.
Instead of having to market individual products across your product line, bundles let you market them all as a unit — which can decrease your marketing costs and bring more awareness to lesser-known products. Bundling can also help decrease your distribution costs by having these items stored and shipped together rather than separately.
Make sure to clearly advertise the discount of the bundle on your product page — because the more your audience feels like they’re getting a great deal, the better they’ll feel. There’s actually scientific evidence that the perception of saving money boosts your customers’ oxytocin levels, and increasing the number of products that your consumer is getting for a good price will only heighten those positive feelings.
We recommend strikethrough prices or side-by-side price comparisons to clearly illustrate the reduced price of the bundle option. Anything you can do to emphasize savings will help your consumers with their purchase decision.
🧠 Smartrr’s Bundle Builder: As you’re promoting your bundle options, you want the user experience to be as smooth as possible. With Smartrr, you don’t have to worry about any costly custom builds or separate PDP pages. Our onsite modal can be seamlessly linked to any existing subscription program to save you both time and resources, and it can be put on your site anywhere that makes the most sense for your consumers. We make it easy for you to style your modal with custom brand colors and fonts so it fits in with your overall business. This is all to say: we set you up for instant success so you can get started boosting your AOV immediately.
Offering your consumers the chance to customize their own bundles is an excellent way to boost their engagement and give them a sense of control over their experience.
56% of online buyers report that they’d go back to a website that personally recommends products, and 80% of consumers are more likely to make a purchase from a business that provides a personalized experience. Customizable bundles are a prime opportunity to make the shopping experience feel more tailored to the user, and your consumers walk away with only the items that they really need.
Leaning on your analytics is a great way to identify two products that would be great candidates for a bundle. Keep an eye out for items that are commonly bought together (like, say, a razor and shaving cream) to suggest to your consumers. This is another great opportunity to play up personalization. Learn your consumers’ tastes and shopping habits to inform tailored recommendations, whether that be a pre-built bundle or a bundle they create themselves with a “you may like” section.
🧠 Smartrr’s Bundle Builder: Choosing to prioritize personalization only matters if your software enables you to do so. With Smartrr, we put personalization at the forefront — which means you can offer multiple bundle sizes, cross-sell variety packs, and empower your consumers to pick whatever variants they want. Taking it a step further, customers can edit their bundles to try new products or stock up on their favorites when it’s time for their next subscription order.
Proceed with caution when pairing cheap products with your premium offerings. In fact, we don’t typically recommend it.
Returning to the hotel example, throwing in the free water doesn’t make consumers feel like they’re getting a great deal so much as it protects against agitation from having to pay even more for something so small. And of course, you want your bundles to genuinely be saving your customers money — not just masking the price of cheaper goods.
Strategizing by pairing some of your less-popular cheaper items with medium-priced popular items, while still offering a real discount, will go a long way to get rid of your inventory and sell some of your perceived “less valuable” items.
By regularly asking your consumers to interact with and edit their bundles, you can quickly gauge which products people are loving — and which just aren’t flying off the shelves. If you’re noticing that 85% of your customers are opting to remove one product from their bundle or regularly swap it out for something else, you might decide to retire that product altogether — or perhaps that product really doesn’t belong in that bundle.
While there are a lot of reasons a product might not sell outside of bundling (consumers aren’t aware of the product, it’s too expensive, they just aren’t interested in it, etc), bundles eliminate many other confounding variables and leave you with some vital data: your consumers aren’t interested in the product and actively go out of their way to avoid buying it. This level of interaction and frequent feedback will help you tighten your overall business and make crucial adjustments to optimize your strategy.
Try offering two different bundles at two separate price points. One can be your regular-sized product and the other can be a travel-sized product to help attract two different segments of your customer base: those who are familiar with the product and those who want to sample the product.
From what we’ve seen, brands that try this out attract many net new subscribers — which is a great way to grow your brand while simultaneously increasing AOV.
And as we mentioned earlier, you can also test new products by offering them as part of a bundle. If you’re marketing something new and have no reviews yet, this is a great chance to get experimental and increase the likelihood that your consumers will try out and provide feedback on new (and maybe riskier) products.
Be sure to leverage your loyalty rewards to incentivize subscribers to leave reviews on these new products. That way, you can speed up the social proof process and start selling the new item individually at a faster rate.
🧠 Smartrr’s Bundle Builder: With our bundles, you can easily offer multiple sizes at different price points to help figure out which your customers prefer.
Ultimately, product bundling is an excellent way to increase customer convenience and personalization, increase AOV, successfully achieve inventory-clearance sales and reduce dead stock, and continue improving your brand with frequent customer feedback and data. However you decide to implement bundling for your Shopify brand, Smartrr’s Bundle Builder is here to help.