The Power of Bundling To Maximize Sales This Holiday Season and Beyond

maximize e-commerce retail sales by bundling merchadise offers

Deep into the holiday shopping season, retailers are looking for an edge that can serve multiple purposes: bolster sales, manage inventory, and impress customers to support loyalty and repeat business throughout the Q1 doldrums and beyond. The answer to those mandates may lie in a simple but elegant package: product bundling.

A retail strategy for decades, bundling involves combining products or services into one sales unit. Bundling can take many forms, from same-product bundles — think multiple packs of tissue paper grouped into one larger order — to hardware and service bundling, where a subscription offer includes free or discounted hardware to entice the customer.

Because there are countless forms of bundling, retailers can tailor their offerings to accomplish different goals or meet specific metrics. The holidays present a unique opportunity to kickstart bundling initiatives that can set the tone for the coming year.

Deploying Bundling To Create New Retail Opportunities

The holiday shopping season is getting longer and longer each year. What was once a sprint between Thanksgiving and Christmas now begins months in advance. A recent McKinsey report shows that 50 percent of consumers are spreading their holiday purchases to October or earlier this year.

However, price and promotion are the primary factors affecting purchases, according to the same report. Further, research by Akeneo revealed that promotions, offers, and deals rank as the three most important pieces of product information for consumers, even more important than size, fit, or dimension information.

For retailers, the high value of offers means that the holiday shopping season isn’t just a three-week opportunity anymore. Year-round discounting strategies and focused bundling in the months leading up to the holidays can have a dramatic impact on overall sales.

Where bundling is most effective is in increasing basket size. It works so well by creating one unified product instead of disparate pieces.

A bundle stands out by pre-selecting and combining items, offering customers a curated mix, and eliminating the guesswork involved in finding complementary products. This approach differs significantly from merely suggesting products, as it simplifies the selection process for the customer.

Improve Customer Experience and Value With Strategic Bundling

Customers are getting not only a discount through the bundle but also a more convenient, holistic solution that doesn’t require them to do the legwork themselves. It also gives customers the opportunity to try new products from the same company that they may not have selected for themselves or even knew existed.

For retailers, the act of bundle curation can serve multiple functions. As product experts, retailers are able to demonstrate their knowledge by bundling complementary products that a customer may not think to put together. Additionally, retailers can include products in a bundle that may need a boost in sales; combining products that are performing well with underperforming products can lift all boats.

With more and more retailers focused on recurring revenue models, bundling presents a unique opportunity to create year-round customers. Not only can free or discounted merchandise be offered to incentivize monthly subscription plans, but retailers can also explore creating their own bundled subscription boxes.

For example, a retailer specializing in soaps, candles, or other sundry items could offer different subscription box tiers at various price points that can establish year-round customers. The holidays present a perfect opportunity to launch these initiatives because subscription boxes can be given as gifts throughout the year.

The beauty of bundling products and services is how it gives retailers an avenue for creative promotion and merchandising.

Understanding your own product mix and expertly curating bundle options for customers demonstrates a level of care and detail that can translate to loyalty and retention. It also creates a platform to test new artificial intelligence and machine learning technologies to build personalized, algorithmically recommended product bundles for individual consumers.

How Bundling Can Impact Inventory Management and Logistics

While bundling provides brands and retailers with new and untapped channels for sales, it also provides a collateral benefit: better control of inventory and logistics.

The ability to pair products into single SKUs creates new channels for moving products. This fact is even more impactful when applied to aging or surplus stock.

Creating bundles that include a mix of older and newer products enables a retailer to turn over less relevant stock at a discount on the promise of newer, more desirable products. Particularly with seasonal products that may have a shorter shelf life, bundling can aid in moving products fast, so they’re not left to sit on shelves the rest of the year.

What’s more, bundling creates a flexible and dynamic solution to inventory management that can mitigate supply chain risk and variance. Creating bundles of products from multiple vendors adds a level of diversification, which can safeguard product reliability if a vendor sees product shortages or delays.

Bundles are dynamic, which means they can be adjusted or adapted based on product availability without sacrificing quality. This control over the selection and timing of product sales significantly benefits retailers, often reducing their role to just intermediaries between customers and vendors.

At a time when retailers are conducting more and more business online, bundling brings the added ability to combine shipping and processing of multiple items rather than handling each item as a discreet order. This fact is especially true in omnichannel retail shopping experiences.

Creating bundles is infinitely easier when product information is comprehensive and uniform across all sales channels. It’s a simple benefit that can save a business thousands of dollars annually.

Bundling Is Great for Customers, Too

It’s easy to see the benefits of bundling on the retailer side, but the truth is that it’s equally beneficial for customers. As noted earlier, consumers are increasingly price-conscious, and finding the best deal is a major deciding factor in purchasing, especially during the holidays.

Not only does bundling offer potentially deep discounts, but it also takes much of the guesswork out of shopping for similar products. Customers often look to brands and retailers as experts in their own product assortments, so having recommendations of similar products in the form of a bundle is a chance for customers to tap into that resource and save time browsing.

When executed successfully, bundling is a win-win for customers and retailers alike. The holiday rush is prime time for experimenting with this exciting retail strategy, potentially creating lasting impressions that can turn into sales well into the future.

Kristin Naragon

Kristin Naragon is Chief Strategy & Marketing Officer at Akeneo. Previously, Kristin was the global go-to-market strategy leader for Adobe's marketing automation offering. She brings many years of experience spearheading alliances, sales, strategy, product marketing, and go-to-market capacities for B2B tech companies, from high-growth startups to category-defining major corporations. Kristin earned her MBA from Harvard Business School and an undergraduate degree from Pennsylvania State University.

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