You buy a mattress and see a recommendation for a mattress cover. A quick search for a t-shirt can end up with a purchase of a set of 5 t-shirts.
Product bundles are everywhere. Brands are leveraging the power of bundling to increase profits.
In this blog, we take a look at how product bundles are helping brands increase sales, what are the most effective Shopify product bundling strategies, and how to implement bundling in your store.
Let’s get started!
TL; DR
- Product bundling creates combos and packs of related or complementary products and services offered at a discounted price as one bundle/pack.
- Shopify product bundling leverages psychological principles, such as price anchoring and easy decision-making and increases average order value (AOV) by 30 to 50%.
- Effective product bundling strategies include tiered bundlings, build-your-own bundle, seasonal bundles and AI-powered dynamic bundles.
- Brands such as Mylkables (plant-based milks) and YuMove (pet supplements) use product bundling strategies to increase sales and AOV, manage inventory, and build loyal customer bases.
- Appstle Bundles & Discounts App helps Shopify brands set up and manage bundling, pricing transparency, tracking performance metrics, collecting data, increasing conversion rate, AOV, and profits.
- Beyond discounts, bundling is more a strategic approach to increase sales, improve inventory management, and create competitive differentiation in the industry.
What is product bundling in eCommerce?
Product bundling is a marketing and sales strategy where brands group together multiple products and sell as one bundle. Bundles often have a discounted price. The products may be related and complementary, or variations of the same item. For example, a back-to-school bundle with a bag, a lunch box, books, and pencils. Another example of a bundle is a set of five t-shirts.
While traditional bundles in physical stores are often limited to the products available in the store, eCommerce bundling offers more freedom and flexibility, as products need not be present at the time of online sales. Ecommerce bundling need not to be managed manually, but with smart apps, for example, Shopify product bundling apps.
Example: Camera kit with accessories, card reader, LED, lens, and more.
Types of bundles
There are different types of bundles, such as:
1. Build-your-own bundle
Customers can pick multiple items and create their own bundle. For example, keep one high-value product mandatory and allow customers to pick three other products from a curated set of products or any product from your site. This increases average order value (AOV).
2. Cross-sell and upsell bundle
By grouping together complementary or related products, you can encourage customers to buy a bundle that adds value to their purchase as well as increase AOV on your Shopify store. For example, bundle a phone with a protective screen guard, and a case.
3. Fixed bundle
In fixed bundles, you can add either different types of products or variations of the same product. Allow customers to buy the products individually too, but when bought as a bundle, offer them a discount.
4. Theme or seasonal bundle
Theme bundles include related or complementary products based on a theme. For example, a winter skin care bundle with a moisturizer, cleanser, and lotion. Another example is a gift set for baby girls and baby boys.
5. Subscription bundle
A popular Shopify product bundling strategy, in the subscription bundle model, customers received a box with curated products on a recurring basis. For example, a curated tea monthly subscription box. Customers only
6. Buy-one-get-one bundle
In this bundle type, customers get a free product when they buy a particular item. For example, buy one bottle of soft drink and get one free, or buy one phone and get a smart watch for free.
Why Shopify product bundling matters for merchants
The benefits of offering bundles go beyond increased revenue. Here’s why bundling matters to Shopify merchants.
- Bundling helps merchants increase AOV as customers end up buying more than just one product. This does not require additional marketing, making it an effective conversion rate optimization (CRO) strategy
- When existing customers buy bundles instead of single products, the revenue increase with the same traffic volume
- Bundling helps merchants manage inventory better. For instance, merchants can add slow-selling items in bundles to sell stock
- Merchants can optimize their inventory with the help of bundles. For instance, create seasonal bundles to sell season-based inventory
- Offering bundles can help create unique value proposition (USP) and a competitive differentiation
The psychology behind product bundling
Bundles and combo packs encourage customers to make more purchases. So what exactly is the psychology behind bundling, and how do bundles work? Here’s how.
Price anchoring
Price anchoring is a strategy that creates a high initial price point or value anchor, which makes a discounted bundle price offer more attractive. It works on the principle that we tend to “anchor on the first piece of information we encounter”, to make purchasing decisions.
When you bundle products and services, you can create a price anchor with the original price of a product when bought individually. For instance, a bundle of 5 t-shirts offered at a price of INR 4500, and the same t-shirt bought individually at INR 500.
When customers buy the bundle of t-shirts, they will anchor it against the price of a single t-shirt. This sort of anchoring and comparing makes bundles more appealing to customers.
Discounts drive urgency without hurting margins
Even though merchants offer discounts on bundles, it doesn’t mean they are losing profit margins. In fact, when planned strategically, bundles can balance discounts with profitability.
When merchants bundle a high-margin product with low-margin products, it balances out discounts and profitability.
Another factor to note is that even though merchants offer discounts based on the number of items in a bundle, their profit margins increase because bundles increase the AOV compared to single-product sales.
Moreover, bundles can lead to the feeling of urgency and FOMO in consumers. For instance, if there’s a limited-edition bundle or seasonal bundle that will be available for a limited time, customers feel the urge to buy the bundles immediately. This increases sales and profitability.
Bundling case studies: How brands increased sales with bundling
Let’s get into the details of how and why bundling works for Shopify brands by looking at some real-life examples and bundling case studies.
Case study 1: Mylkables
Mylkables is an Australian brand that offers alternative milks. Apart from offering single products and subscriptions, the brand offers many types of bundles. The bundles include multi-pack offers as well as bundles with different types of milks.
The brand’s Combo Deals and Multiple Box Deals collections offer reduced pricing, encouraging purchases of larger quantities. Mylkables plans bundles strategically, allowing customers to choose multi-packs of the same item or try varieties by choosing bundles with a variety of milks.
Why Mylkables Shopify product bundling works:
- The combo offers increase AOV
- With the multi-pack bundles, customers get to try new products they might not have tried
- Increases brand loyalty and repeat purchases
- Subscription of bundles increases revenue as well as repeat purchases
- Customers have many varieties to choose from, keeping monotony away
2. Case study 2: YuMove
Yumove is a pet supplements brand that offers supplements to address various pet health issues. However, their USP is they also offer supplements for humans. The brand caters to the needs of different types of pets, offering supplements for various ailments. Their ‘Dog and Me Bundle’ offers supplements for pets and humans.
Why YuMove bundling strategy works:
- The bundling strategy extends across multiple life stages and supplement needs at each stage
- The bundles often include complementary products so customers can try new items
- Its subscription option makes it easy for customers to make purchase decisions for convenient long-term purchase
- Having a wide range of supplements makes the brand a complete solutions provider, increasing sales
Bundling strategies that drive 30%+ sales growth
If you’re waiting to get started with Shopify product bundling, here are some tried and tested strategies that have helped brands increase sales by 30% and more.
1. Tiered bundles
Tiered bundles strategy works on the structure where the more customers buy, the more discount they get. For instance, ‘Buy 2, save 5%’, Buy 3, save 10%’, and so on. It works on the principle of progression of value, encouraging customers to buy more. Customers can maximize savings by choosing higher tier bundles.
To implement tiered bundles strategy on your Shopify store, follow these points:
- Carefully calculate profit margins for each tier
- Calculate eCommerce bundle discounts in a way that it encourages customers to purchase more and increases your profit
- Add higher-margin products based on tiers, making it easier to sell high-value products
2. Build-your-own bundles
Build-your-own bundles strategy enables personalization. Customers can choose the products they want to add to the bundles. This Shopify product bundling strategy works well for brands that have an extensive inventory with many products and categories.
Here’s what you should do:
- Categorize your inventory in a thoughtful way
- Communicate about the value of these bundles to customers
- Keep it simple so that customers understand it
- Example: Choose any 3 products from our organic collection for 15% discount
3. Seasonal bundles
Seasonal bundles are based on purchasing patterns seen around specific times of the year. For example, during the Holiday Season and Christmas, or during school reopening time. Seasonal bundles are often for a limited time and hence there’s an urgency around them.
Here’s what you can do with seasonal bundles:
- Create seasonal bundles based on timing and relevance
- Use customer data from the past to create bundles
- Launch the bundles much in advance
- Create FOMO and urgency by offering limited-time offers
- Example: Valentine’s Day bundles, back-to-school bundles, monsoon bundles, etc.
4. Dynamic bundles
In the ever-changing eCommerce environment, it is critical to have a pulse on your customers’ needs at all times. The best way to do so is AI. With AI, you can create dynamic bundles, even in real-time. AI-based bundles use data analysis and insights to create bundles of products customers want.
Here are some AI-based dynamic bundle tips:
- Create dynamic bundles based on customer behavior, purchase history, and browsing patterns
- Offer personalized dynamic bundles to increase sales
- Choose a Shopify product bundling app that offers AI-based features
- Continuously optimize your dynamic product bundling strategy by collecting and analyzing data
How to implement bundling on Shopify
Follow these tips and best practices to set up a strong foundation for your Shopify product bundling strategy.
Install Appstle Bundles & Discounts Shopify app
There are many Shopify bundling apps in the market that make it easy to implement bundling strategies. One efficient app preferred by Shopify merchants is Appstle Bundles & Discounts. The app offers a comprehensive set of features that easily integrate with Shopify stores.
Appstle Bundles & Discounts features:
- Enables different types of bundles
- Offers flexible pricing and eCommerce bundle discounting options
- Targeted discounting and tailored bundles
- Real-time analytics for dynamic bundles
- Easy integration and migration from other platforms to Appstle
- Various bundling rules for unlimited use cases
- Integrated with third-party apps
- Smart inventory management
Best practices for Shopify product bundles
- Ensure there is transparency in pricing and discounts. Keep it clear and straightforward
- Customers should know what they’re purchasing, how much they’re paying and saving
- Clearly display all the products in the bundle and share detailed information on each
- Highlight bundle savings and show original price as well. This highlights value proposition
- Ensure the checkout process is smooth and frictionless
- Mention all the products in the bundle in the order confirmation
Wrapping up: Set up Shopify product bundling on your store
Product bundling can help merchants increase AOV on Shopify stores. We’ve shared strategies and best practices for you to get started. However, you will first need to install a bundling app on your Shopify store.
Install Appstle Bundling & Discounts App on your Shopify store.
