The value of a product bundle & how to handle bundle returns.
Carly Greenberg
·November 4, 2020
Brands are always looking for ways to encourage their customers to buy more. Frequently, this comes in the form of selling products at a discount to create a tempting offer – such as a buy three, get one free promotion. But as many smart brands are discovering, there’s a more strategic way to increase sales, and that’s with product bundling.
What is product bundling?
Product bundles are also commonly referred to as kits and capsules. Essentially, it’s combining multiple products to make a larger purchase more appealing. While every brand approaches product bundling slightly differently, there tend to be shared characteristics. Product bundles typically:
- Group similar products (a pack of t-shirts) or complementary products (a travel-sized skincare kit) together
- Are offered at a discounted rate, compared to buying each item individually
- Contain unique products together in a single SKU
The benefits of bundling products
There’s a reason why the idea of bundling products is so appealing to brands. This strategy comes with many benefits:
1. Makes shopping easier
Customers have so many options to choose from, which can lead to decision fatigue. Product bundles can relieve some of this stress. Instead of having to choose six different types of socks, for example, shoppers can simply buy a pack like the one Bombas offers below.
Bundles also allow brands to communicate recommendations to customers. “You want to bundle products that strengthen the results of each other,” says the team at Absolute Web.
You want to bundle products that strengthen the results of each other.
“For example, if you’re a skincare brand, bundle products by routine pairings (like an exfoliator and a moisturizer). If the customer sees good results using pairable products, they’ll likely purchase the pair again even if it’s not discounted.”
2. Improves average order value
Product bundles are a win-win for both you and your customers. Since bundled products are often offered at a discounted price, customers get more bang for their buck. That’s why it’s common to see brands like MeUndies market these cost differences on their product pages.
Because of this perceived increase in value, customers are likely to spend more per transaction, which improves both your AOV and total revenue.
Don’t try to over-inflate the value of the bundle.
But a word of caution from the team at eHouse Studio: “Don’t try to over-inflate the value of the bundle to make it look more attractive as a deal. Research shows that pairing low-priced items with luxury or higher-priced items make the bundle look less valuable.”
3. Create an opportunity to highlight your best products
Product bundles also present a great opportunity to put your best foot forward. Many brands use bundled products to pair their best-selling products together – like the Fresh Clean Tees t-shirt pack below. Not only are you more likely to impress your customers by giving them a taste of the best your brand has to offer, but this will also likely lead to more sales in the future.
The team at BVA confirms this approach. “We’ve seen that bundling a high-margin product with your best-selling product can be a great combination if there’s high product affinity.”
How to bundle products on Shopify
Unfortunately, for brands that are on Shopify, there’s no default product bundling functionality. While you can technically use discount codes to create a makeshift bundle experience, that leads to a confusing and frustrating experience for your customers. Thankfully, you have a few other options to consider:
Option 1: Use a product bundling app
Shopify offers a few apps, such as Bold Bundles and Bundle Builder, that allow brands to offer products in a bundle and promote them to customers at a discount in the storefront.
Option 2: Deploy Shopify Scripts
Another option is to use Shopify Scripts to create personalized bundled product experiences for your customers. This can be a more complex and time-consuming process, which is why most brands work with an agency. It’s also important to note that these scripts are only available to Shopify Plus merchants.
Option 3: Create a single SKU
The easiest way to create a bundled product experience is to create an SKU that represents the entire bundle. Unfortunately, while this is simple to do in the storefront, the product bundle logistics can present challenges on the backend.
Bundle returns are challenging
One of the biggest obstacles brands face when it comes to bundles is handling requests where customers want to return just one item from the bundle. This seemingly simple request actually comes with a lot of complexity:
- Pricing. According to Zehner: “The hardest aspect of handling returns on bundles is understanding how to distribute bundled discounts between the returned products – especially in cases where someone splits the return.” In other words, when you offer customers a product bundle discount, how do you calculate the right refund amount for a single product?
- Logistics. There’s currently no functionality or app on Shopify that allows brands to set up returns for individual items in a product bundle, until now with Loop. Before, bundle returns were extremely challenging to accommodate not only for processing purposes but also from an inventory management perspective.
But if brands don’t offer the flexibility to return a single item in a bundle, they’re forcing customers to accept all or nothing when it comes to bundle returns. This will eventually lead to decreased customer satisfaction and less revenue for the business. So what’s the solution?
Changing the way product bundle returns are handled
Loop has an exclusive feature, properly named Bundles, to help brands build custom bundles that are eligible to be returned in their customer portal.
But unlike other solutions, Bundles by Loop gives customers a streamlined way to exchange individual products within a bundle and can even be customized to support your own bundle rules.
- You can deliver a great customer experience by allowing bundles to be returned by the customer without contacting your support team
- You remove the headache for your team by entering your existing bundles into Loop, allowing you to automatically support bundles without making any changes in Shopify
- You create a flexible return policy for your customers by allowing them to return or exchange individual products within a bundle
Bundles are an incredibly valuable strategy for brands to consider. And it’s not just for marketing purposes. With the right approach, product bundles are a much better alternative to discounts, give your customers a better experience, and will ultimately lead to more sales for your business. Learn more about Bundles by Loop.
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