“Wanna make it a combo?” This phrase is familiar to most from the fast food restaurant around the corner. The idea behind it: For a few euros more, there is a combination of products that would be significantly more expensive individually. Customers save money and the restaurant increases sales. Both sides win.
The same simple but effective principle is relevant for e-commerce stores. Instead of a combo, however, we call it a “bundle”. Research shows that up-selling and cross-selling with bundles generates up to 30 percent of e-commerce sales. In this blog post, we explain what's behind this e-commerce strategy and why it might be just right for your online store.
Table of contents:
- What are bundles in e-commerce?
- Types of bundles
- For which industries are bundles particularly suitable?
- Advantages of bundles for shoppers
- Advantages of bundles for retailers
- Bundles: challenges for shop systems and logistics
What are bundles in e-commerce?
Simply put, bundles are multiple products that customers can purchase at a lower total price compared to the individual prices. Generally, e-commerce stores advertise bundles directly as special offers in order to make it particularly easy for website visitors. Of course, bundles are not unique to online retail – brick-and-mortar retailers knew about the benefits of bundle offers long before online shopping made a name for itself. But in recent years, combined offers have become particularly popular in online stores. And rightly so: bundles are a versatile tool that offers benefits for all parties involved and makes sense for a wide range of industries.
Types of bundles
There are different types of product bundles. A very simple example, which should not be forgotten, are bundles based only on the number of a given item. For example, one bar of gourmet chocolate costs 5 euros, but five bars are available for only 20 euros. Most people, however, think of bundles as mixed bundles. Here, the product combinations that are offered make sense together: barbecue spices and steak sauce, mascara and eyeliner, the soccer ball and an air pump. Cooking boxes – such as the popular packages from Hello Fresh – also count as mixed bundles. With these bundles, the combined price is usually cheaper than all the individual products together.
Some sites also offer bundles that aren't actually bundles. Amazon is guilty of offering these fake bundles. These are bundles that give the appearance of an offer, but don't actually offer any price savings. Although customers have the advantage that matching products are sold together – they do not save any money.
For which industries are bundles particularly suitable?
Another advantage of bundles is that they can be used by almost any shop. Of course, some industries are particularly well suited to these offers. Cosmetics is a prime example. Whether it’s a combination of shampoo and conditioner or day and night cream – cosmetics stores are particularly happy to use bundles to offer customers matching items. But fashion and sports stores also like to bundle products for their customers. In the food industry, there are entire stores that focus solely on bundles and offer a wide variety of food combinations to customers with a culinary interest.
Advantages of bundles for shoppers
Bundles bring several benefits to customers. The two biggest are price savings and the convenience factor. One important reason why shoppers like bundle offers so much is that the combination of products in the bundle is usually significantly cheaper than the individual products. This is handy for trying out new articles or saving a few euros on familiar products. The convenience factor comes on top. Good bundles make sense in their combination of products. This makes it very easy for customers to find matching items and receive useful product recommendations.
Advantages of bundles for retailers
The advantages of bundles for retailers are even more diverse. The convenient and attractively priced offers for customers often mean that more items end up in the shopper’s virtual shopping cart. Online stores can use bundles to achieve a higher average order value among their customers. Since they ship more items per order, the effort and costs for logistics and shipping are reduced for each item sold. In the end, this also means higher profits for online retailers.
By cleverly bundling products, retailers can ensure that they sell off certain old products more quickly, for example, to make room on the shelves for new products. At the same time, bundles are a good way to promote new products particularly easily. A good e-commerce bundle is a good tactic to set yourself apart from the competition.
Bundles: challenges for shop systems and logistics
Ideally, it’s just one click for customers. Customers only care about getting the right products and saving money. So make sure that your system provides both of these things flawlessly. But for the store systems and logistics behind the click, bundles can be quite a challenge. It is important that all data, stock levels and price information are stored correctly. There are two ways to create the bundle in the system. When the bundle is added to the cart, the individual items are added and the price savings are calculated in the system at checkout. This step sounds simple, but it means that the shop system has to do a lot of work in the background, which negatively affects website speed.
Some SaaS-based fulfillment solutions, such as WH1+, offer an option that requires less computational work by the shop system. The bundle is simply stored as one item in the shop system and marked with the reduced price. When customers check out, the logistics solution recognizes that there are two separate items behind the bundle, each of which must be picked and packed in the warehouse. As a result, the site speed remains unaffected and customers have the best possible shopping experience.
Bundles offer online retailers a wealth of benefits. From higher average order values to the ability to easily promote new merchandise. The best part about them is that customers benefit equally as well. Bundles are a win-win situation for online stores and customers.