What is Product Bundling & How to Bundle Your Products to Increase Average Order Value?

Product bundling is unique and probably most underutilized way to increase e-commerce revenue of store. I haven’t seen many stores that uses this tactic to increase revenue for e-commerce stores. If you head over to our E-commerce Revenue Optimization Framework that I built recently, it is pretty evident that if you can increase avg. quantity per transaction, it can have a strong boost on the revenue of e-commerce stores.

I wanted to use this article to explain some of the new practices are coming to make customers buy more if they are deal seekers using product bundling:

Product Bundling:

What is Product Bundling?

A Product Bundle is basically a group of products that you offer to your users, mostly at a discount. It’s a nice way to encourage impulse buying and increase order value. When a customer is on a product page, you can suggest a bundle of products that would go well with that product.

It works as normal recommendations. In bundling, all products that you recommend have a relation and they are sold together. The hitch here would be, “why would people buy 3 products when we are not even sure that they’re not even going to buy one?

They will. Actually, they do.

We implemented Product Bundling with one of the customers of Liftsuggest. Within 15 days, his order value for the customers who bought bundles increased the order value from $160 to $182. We learned that about 3% of visitors who saw bundles actually bought them.

How does bundling work? How are these bundles created?

Tatvic’s recommendation engine can be implemented on your shopping cart. It will analyze your website’s customer’s behavior using data from Google Analytics. It creates groups of users from the analytics data, and creates bundles based on which products are being bought together for the most of time, within that group. Then it serves targeted bundles to each specific group of customers.

How does it benefit the customer?

Example of Product Bundling

The customer has to see value. Here’s one of the 3 reasons a customer will consider buying the above bundle:

  • She sees a huge saving
  • She loves the product combination you are offering as a bundle
  • Both of them
How does it benefit the vendor?

If offered discounts, the vendor has to lose some margin. He makes less money per product, but more money on the total order value. Also, sells more products. Find below 3 product bundling strategies you can use for your e-commerce store:

Product Bundling Strategy:

There are some bundling patterns to create targeted bundles that customers would like to buy.

1) Bundling main product with accessories

Product Bundling Accessories

Above is a perfect example of bundling main product with accessories.  An Indian wear is bundled with a necklace and a purse. The customer will buy this because she’s getting a matching set and with discounts.

2) Bundling main product with similar products

Example of Product Bundling with Similar Products

This kind of bundles will go well for books, apps, software’s, music and movies.

3) Bundling main product with different products

You can use this pattern to cross sell. E.g., A washing machine can be bundled with a microwave or a TV.

Product Bundling Tips:

Offer discounts

Bundle products together and give good discounts. The customer will see direct value and a reason to buy the bundle. In above image, “Best deal..” as a heading is a nice way to promote the discounts and attract customers.

Build urgency

When offering discounts, or showing a value deal, urgency can be built. to push the purchase. Again in above image, see this line, “Valid for next 4 hours”. It builds and urgency in customer’s mind, and pushes her to buy it right away. 

In this blogpost, we learned what is product bundling, how to begin with product bundling and few tips that will help you improve your overall product bundling strategy.

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