Jul. 15, 2024
Machinery
Price bundling helps you overcome the difficulty of getting potential customers to make a purchase of specific products or services. It simplifies their buying experience and can potentially increase average order values through the combination of high-value and low-value products.
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When you offer a bundle of normally separated products or features that, together, your customers need to accomplish their goals, you make the purchase decision easier. Instead of expecting them to cobble together different products or features, you&#;re offering a one-stop shop for them. That makes the experience of interacting with your business and purchasing your product simple and efficient.
Bundling is a great way to increase your sales and profit margins as well as the value you provide to customers. We see this in companies like Amazon, which often create dynamic product bundles based on complementary products their customers typically purchase. This allows Amazon to create larger margins for themselves while also offering a lower price than their competitors.
Let&#;s take a look at an example with sticky notes of different colors. When a customer purchases orange sticky notes for $6.72, Amazon can bundle those together with aqua sticky notes for $9.03.
Impact of price bundling on margins via McKinsey
This results in a 34% markup from the customer&#;s intended purpose, helping Amazon tap into more revenue through the bundle while still offering a low price for orange sticky notes.
With a bundle pricing strategy, you&#;re not just putting together products that complement one another from a business perspective; you&#;re also giving customers more value through the bundle than they would receive from each individual purchase. That compounding value makes customers more loyal and can lead to future purchases.
If you have a product or feature that&#;s underperforming, price bundling helps you boost customer engagement by selling it alongside a more popular one. Just make sure that both of the products you&#;re bundling together increase in value as a result of the bundle. You don&#;t want to decrease the value of a more popular product or feature by connecting it with one that your customers don&#;t actually need.
Product bundling is a widely-used product merchandising tactic.
With product bundles, brands like yours sell two or more individual products together as a combined offer. Bundles enhance your customers&#; experience, expands your market, and above all, increases your average order value (AOV).
But not every brand approaches product bundling the same way. See 12 product bundling examples from leading brands in action.
Given the benefits of product bundling, it&#;s no surprise that many brands provide consumers bundle offers. See what different types of product bundles look like in action with these 12 product bundling examples.
Pure product bundling is when individual components are only for sale as part of a bundled item. These individual options are not for sale as separate products &#; you can only purchase them as part of a larger bundle.
Popular meal kit company Hello Fresh provides an example of pure product bundling. Hello Fresh customers don&#;t buy individual meals. Instead, they buy a meal package &#; customizable by dietary preferences and the amount of food &#; and have a bundle of meals delivered.
Notice that no part of Hello Fresh&#;s digital commerce platform allows for the selection of individual meals. Instead, customers select their culinary preferences and the amount of food they want delivered. In this way, Hello Fresh&#;s product isn&#;t individual meals &#; it&#;s a bundled set of meals that need to be purchased together.
Mixed product bundling is the opposite of pure bundling. In a mixed product bundle, you buy a package of products &#; sometimes for a set, discounted price &#; that can also be purchased as separate, standalone items.
Often, mixed product bundles involve the ability to choose different options as the bundle&#;s components. Fast and casual dining offer prominent examples.
Wendy&#;s, for example, has a &#;2 for $6&#; bundle in which customers can choose 2 items for $6. Items for selection include hamburgers, sandwiches, chicken nuggets, and drinks.
On Wendy&#;s mobile app, customers can make their 2 for $6 selections. Notice that it&#;s possible to swap items without changing the price.
The buy one get one (BOGO) product bundle is a commerce classic.
In BOGO product bundling, buying one item gets you the same option or a related product for a discounted price or for free. In commerce, BOGO bundling is useful for increasing AOV and getting inventory off shelves.
Pella, which manufactures and installs windows and doors, offers a standard BOGO bundle package: buy one window and get another half off.
Pella offers high-quality products, so offering two products for the price of 1.5 helps expand their market and reach different, more price-conscious customers.
Want to learn more about how Pella increases AOV and powers complex, custom-configured purchases? Learn how Pella adopted a revolutionary direct-to-consumer (DTC) digital commerce solution.
When consumers think Reebok, they&#;re probably thinking about shoes.
But shoes aren&#;t Reebok&#;s only product. By offering a &#;you may also like&#; bundle on a web page promoting a pair of sneakers, Reebok puts more products in front of their most loyal customers.
&#;People also like&#; bundles allow customers to view and add on complementary items to a main product, such as Reebok&#;s Club 85 Vintage sneakers. Shorts, a sports bra, other apparel &#; for Reebok, the opportunity for customers to add other standalone items to their purchase drives sales, revenue, and the awareness that Reebok sells more than just shoes.
Many product bundles are anchored by a main product and complemented by additional items. Others, such as the Nutrition and Professional Development Bundle offered by the International Sports Sciences Association (ISSA), bundle together topical products and services into a holistic solution.
ISSA helps their customers become certified personal trainers, and the Nutrition and Professional Development Bundle gives consumers access to a bundle of continuing education units that ensure certification.
These courses could be purchased or completed separately, but ISSA&#;s topical product bundle allows prospective trainers to purchase high-quality coursework at once. Plus, buying the courses in this topical bundle comes at a discounted price.
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Featured content:People shopping for clothes often aren&#;t searching for jeans or a t-shirt or a sweater so much as they are shopping for a look.
Like other major retailers, Nike offers &#;Complete the Look&#; bundling in which consumers can use a single product as inspiration for a curated, head-to-toe outfit.
For example, customers shopping online for a Nike Sportswear Phoenix Fleece are also served with panels of related, complementary products that could be fashioned together. Toggle over a &#;Complete the Look&#; panel and the linked prices of individual products appear, as well as a &#;View Entire Look&#; prompt. This way, consumers can bundle socks, a hat, shoes, or all of the items with their fleece. Nike wins, too, by selling more products and increasing AOV.
QuickBooks provides accounting software for small and medium-sized businesses. Self-employed people use QuickBooks to manage their business finances, but some entrepreneurs need more tax support than others, so QuickBooks offers tiered bookkeeping bundles.
QuickBooks&#; offerings range from basic, $7.50 per month services to a Live Tax Bundle for $17 per month that includes access to a CPA. For customers, the tiered services bundle offer gives choice and flexibility. For QuickBooks, offering a tiered services bundle helps enhance the customer experience and reach a wider swath of self-employed customers.
Access a free Elastic Path trial today to see our leading composable commerce solution in action.
Sign up for a free trialConsumers in the market for a big-ticket product aren&#;t always thinking about additional products that complement it. HP provides an example of cross-sell bundling that offers consumers a related, complementary item as part of a major purchase.
In this example, customers buying a laptop are offered a bundle that includes an add-on pair of high-quality headphones. The two items in this bundle weren&#;t designed to be sold together and would typically be separate purchases. But HP is anticipating customers&#; future needs. Why not buy a pair of headphones with your laptop and get something you&#;ll eventually need for a reduced price?
Beyond improving customer experience, HP is increasing AOV and ensuring that inventory doesn&#;t go to waste.
If cross-sell bundling is about offering customers one or more additional items that would be nice to own together, paired bundling is about offering customers a bundle of two or more items that are built to be owned together.
Take the powered cooler and portable battery bundle from Dometic, which sells outdoor goods.
Dometic&#;s CFX3 Powered Cooler requires charging. For a camper, hunter, or fisher, electrical outlets aren&#;t guaranteed &#; so Dometic also offers the PLB40 Portable Battery.
These products are designed and optimized for one another. So, Dometic provides a bundle sale in which consumers get close to half off the battery if they also buy a cooler.
Dometic is essentially saying to customers: A powered cooler needs a portable battery. We can offer both, at once, for less.
Sometimes buying a major product &#; like a house, car, or &#; comes with the need to buy other, related items or services, such as insurance, upkeep, or a cellular plan.
In these cases, brands such as Volvo offer customers subscription product bundling.
Volvo&#;s car subscription product bundle gives customers the opportunity to lease a car on a subscription basis. For a monthly, all-inclusive fee, drivers receive a car, maintenance, insurance, roadside assistance, and other perks. These services are sold together in subscription-based, monthly increments for a flat fee.
Product bundle sales are common, but some bundling offers come as inventive, partially-discounted offers.
Someone shopping for children&#;s books on Target&#;s website may find one for-sale book bundled with three other titles.
In this example, Target bundles a discounted version of Dr. Seuss&#;s Fox in Socks with three other books. One of those additional books is on sale, and the other two are sold at their normal price.
This way, Target increases AOV, gets inventory off shelves, and offers customers a discounted set of titles that complement each other.
One of the advantages of product bundling is reducing customer decision-making, and perhaps no decision gives shoppers more angst than deciding on a gift.
Sephora&#;s gift set bundles help reduce the stress of gift giving by bundling together themed items into gift sets.
Consumers buying for a new parent can gift a baby bundle, and those gifting to a makeup lover can gift a makeup kit.
Consumers and retailers win with gift set bundles. AOV goes up, inventory moves fast, and consumer stress is reduced.
Now that you&#;ve seen top product bundling examples, you may wonder: How do I build my own product bundle?
The answer: Turn to Elastic Path Product Experience Manager (PXM). EP PXM gives your customers a product bundling experience that will boost your conversion rate, revenue, and overall commerce performance.
With EP PXM, you don&#;t have to embark on a long or costly replatforming process in order to practice effective product bundling. EP PXM combines commerce PIM, product merchandising, and Catalog Composer capabilities to give brands like yours total freedom when designing bundles and other product experiences.
Want to learn more about how leading brands approach today&#;s merchandising challenges? Watch our on-demand merchandising panel with the experts at Maavvee and Pokemon.
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