Bundling & Kitting 101: Boost eCommerce Profitability & CX

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In today's hyper-competitive eCommerce market, it's crucial for your business to find innovative ways to stand out. That's where product bundling and kitting come in. By grouping complementary products together, you can offer value to your customers through discounts and curation, while increasing your average order value to grow your revenue. In this article, we'll explore the concepts of bundling and kitting, dive into their benefits, and give you practical advice on how to integrate them into your eCommerce strategy. 

Bundling vs. Kitting

When it comes to eCommerce, you may have heard the terms "bundling" and "kitting" being used interchangeably, but it's important to note that they are not the same thing. Bundling typically involves grouping together existing products into a package or set, often with a discount or special offer to incentivize customers to purchase more. On the other hand, kitting involves creating a new product by combining different components or parts together, often for a specific use or purpose.

It's important to understand the differences between bundling and kitting, as they can impact your order fulfillment and inventory management processes. While bundling involves combining products that are already in stock and can be fulfilled separately, kitting requires assembling new products or components, which can introduce additional complexity and time into the fulfillment process. For instance, if you want to create a skincare bundle that includes a cleanser, toner, and moisturizer, you can easily pull each product from your inventory and ship them separately. But if you want to create a kit that includes a makeup bag, brush, and several makeup products, you would need to source and assemble each component.

The Winning Edge: How Bundling Boosts eCommerce Success

Bundling is a smart strategy that can help eCommerce businesses boost their sales and revenue while delivering more value to their customers. Here are some of the key benefits of bundling that can help your business gain a competitive edge in the marketplace:

Increased Sales

Bundling allows you to offer a curated selection of products that cater to your customers' needs and preferences. By bundling complementary products together, you can make it easy for customers to purchase multiple items at once. For example, you can bundle a dress, cardigan, and a matching belt together, creating a complete outfit that customers can buy in one go.

Higher Average Order Value (AOV)

Bundling can also increase the average order value by incentivizing customers to buy more products in one purchase. By offering a discount or a special offer on bundled products, you can encourage customers to add more items to their shopping cart to increase the revenue per customer. For instance, you can bundle a cleanser, toner, and moisturizer together and offer a 10% discount on the total price, enticing customers to buy all three products.

Reduced Inventory Costs

Bundling can help you clear out slow-moving or excess stock by packaging them with other items that are selling well. This can reduce the costs associated with holding onto excess inventory and free up valuable storage space. For example, you can bundle a selection of gourmet sauces and condiments that are approaching their expiration date with other products that are popular with customers.

Improved Customer Satisfaction

By bundling products that are relevant and complementary, you can create a convenient and efficient shopping experience for your customers. This can lead to increased customer satisfaction, which can help build brand loyalty and encourage repeat purchases. For instance, you can bundle a set of grooming tools with a selection of organic pet shampoos, making it easy for customers to take care of their pets' grooming needs in one purchase.

Competitive Advantage

Bundling can provide a competitive advantage by offering unique product combinations that are not available from other competitors. By creating bundled products that are tailored to your customers' needs and preferences, you can differentiate yourself from the competition and attract new customers. For example, you can bundle a set of throw pillows with a matching area rug and curtains, offering a complete room makeover package that customers can't find anywhere else.

This example from IKEA shows a storage bundle that is made up of multiple products. Customers buying this bundle likely wouldn’t have been able to come up with this combination on their own. So with IKEA offering their expertise directly in the form of bundles offers value to their customers while also significantly increasing their AOV. 

Ikea storage furniture bundle

Overall, bundling is a versatile strategy that can help eCommerce businesses increase sales, improve customer satisfaction, and reduce inventory costs. So, whether you're just starting out or looking to take your eCommerce business to the next level, bundling is definitely worth considering as part of your eCommerce strategy. 

Bundle It Up: Exploring Types of Bundles for Your eCommerce Business

In bundling, the secret lies in pinpointing the optimal items to pair together and determining the right price for them in order to increase your profit margins. Let's dive into some popular types of bundles and how you can implement them effectively. With so many bundle options available, it can be overwhelming to choose the right one for your business. By understanding the different types of bundles and considering your target audience and business goals, you can create effective bundles that drive sales and improve customer satisfaction.

Mix-and-Match Bundles: These bundles give customers the option to customize their purchase by choosing different variations and sizes. This bundle type offers customers complete control over their purchase, making the offer more enticing.

Multi-Packs and Pre-Packs: Multi-packs provide multiple copies of the same product at a discounted price. For example, a multi-pack could give customers the option to purchase a 3-pack, 6-pack, or 10-pack of socks.

Gift Set Bundles: This bundle typically involves a selection of related items that are attractively packaged and priced for gifting. Think about popular holidays like Valentine’s Day, Mother’s Day, and birthdays.

Upsell and Cross-Sell Bundles: Upsell bundles are used to encourage customers to purchase higher-end products. This can involve bundles of similar products or bundles of one high-end product and several lower-end products. For cross-sell bundles, products from different product lines are bundled together. This bundle encourages customers to try various products—often ones they might not have considered before! 

Buy One Get One (BOGO) Bundles: This bundle offers one item at regular cost and a second one for free. This is a popular bundle type because it is an effective way to encourage customers to purchase more items.

Thinking It Through: Key Considerations for Implementing Bundling & Kitting

Successful implementation of a bundling and kitting strategy requires careful planning and consideration. We’ve compiled some key considerations to keep in mind when implementing bundling and kitting into your eCommerce business.

Analyze Your Customer Needs

Understand what your customers want and need from product bundles. Identify their pain points and create bundles that solve their problems. For example, skincare brands often bundle products based on skin types to provide customers with targeted solutions.

Watch Buying Trends

Pay attention to which products customers purchase together to identify potential bundles. This can make it easier for customers to purchase the bundle rather than hunting down each item individually.

Develop Segment-Specific Bundles

Different customer segments have different needs, so tailor bundles for each segment. Make it easy for each customer segment to discover products that are relevant to them.

Create Bundle Landing Pages

Offer a more focused customer experience by creating dedicated landing pages for product bundles. This makes it easier for customers to understand the bundle's value and how it can benefit them.

Consider How You Will Track Bundle SKUs

Decide how you will track bundle SKUs to streamline your operations and make it convenient for customers. Tracking individual SKUs can provide better control and visibility over your products, optimize your operations, and provide a better customer experience. Using apps such as Simple Bundles can help. This software breaks down your bundled products into their individual components within the customer's order. This facilitates a more streamlined picking and packing process, and offers a more accurate view of your inventory count.

Improve Productivity Through Back-End Automations

Technology and automation can streamline the fulfillment process for product bundles and improve productivity. ShipNetwork’s eCommerce fulfillment services seamlessly integrate into most eCommerce platforms, enabling order data to be received at your customers' nearest fulfillment centers to get orders picked and packed right away. 

Show the Value of the Bundle Right Away

Highlight the cost savings, limited-time offers, and other conveniences of the bundle to make it more enticing than buying each product separately. Paint a clear picture of the bundle's value on the product page.

Test & Measure on an Ongoing Basis

Continuously perform tests to measure the effectiveness of each bundle and make adjustments accordingly. Consider conversion rates, landing page engagement, data between bundles and variants, seasonal bundles, and bundle performance compared to individual products.

Leveraging Simple Bundles + ShipNetwork for Effective Bundling & Kitting Solutions

Managing inventory and order fulfillment can be a challenging task, especially when dealing with bundled products. Fortunately, there are solutions to help streamline the process and ensure that customers receive their orders promptly and efficiently.

One solution is Simple Bundles, a bundling app that integrates with Shopify, allowing you to create and manage several types of product bundles, such as mix-and-match bundles and subscription bundles, with ease. Simple Bundles works seamlessly with ShipNetwork, which offers a range of eCommerce fulfillment services like kitting, subscription boxes, and returns management. By leveraging Simple Bundles and ShipNetwork together, you can create and manage your bundled products seamlessly, while also streamlining the order fulfillment process.