Both product bundles and packages contribute to growth by encouraging customers to buy more items resulting in increased revenues, AOV (average order value), CR (conversion rate) and LTV (lifetime value).
Product bundles refer to a group of complementary products that are sold together as a group, often at a discounted price. Product packages are typically multiple quantities of the same item sold together as one item.
Product bundles and packages can take various forms and be used across different industries, from fashion and beauty to electronics and software and have been known to increase conversion as much as 5-20%, depending on the product category and proper item selection, discount design and communication.
From the technical and inventory aspects a bundle is a collection of items curated together to form a single decision. Bundles however include multiple SKU (product IDs) which will show up in the cart individually. The discount will only be applied if all parts of a bundle are in a cart.
A package typically contains multiple quantities of a single item, but can also include multiple items put together and sold as one SKU. Customers can not break down packages into individual pieces.
Bundles
Product bundles can take different shapes and for varying purposes. Some of the more common options include:
Fixed Bundles are pre-defined bundles curated together by the retailer, for example a skincare bundle may include a cleanser, toner, and moisturizer.
Customizable Bundles where customers can pick and choose the products they want to include in the bundle from a selection of options.
Theme-based Bundles are centered around a particular theme or occasion, such as holiday bundles, or back-to-school bundles.
Starter Kits are designed for customers who are new to a product category or brand, offering a selection of essential items to help them get started.
Buy One, Get One (BOGO) Bundles provide customers savings if they purchase one product and receive another product for free or at a reduced price.
Cross-selling bundles combine complementary products from different product categories, encouraging customers to purchase additional items. For example bundling flashlights and batteries together, or engine oil and oil filter together.
Bundling as an inventory turn strategy
Bundling can be an effective strategy to get rid of unsold inventory, especially if the bundled products are complementary and the discount is attractive to customers.
Subscription bundles
Subscription boxes are a uniquely beneficial type of product bundles where customers receive a curated selection of products regularly, often on a weekly or monthly basis. The specific contents of each box may vary, providing customers with a surprise element. This model is popular in industries like beauty, food, and lifestyle.
Product groups or packages
Product packages or groups refer to sets of items that are grouped together for sale as a single unit.
This strategy is commonly used in ecommerce to encourage customers to buy multiple products at once, providing them with added value or convenience, and the retailer increased revenues due to larger orders.
Product packages can take various forms, and their composition often depends on the nature of the products and the goals of the business.
As a product manager you can:
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Add bundle and package capability to your ecommerce application for use by your partners in marketing, merchandising and other teams.
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Specifically for growth you will make sure the analytics are set up correctly and reporting is automated so the organization is informed and current on how the packages are performing.
To determine if a bundle or package is performing well you can use the typical product tracking and analytics for volume, frequency and conversion.
One good comparative gauge is to see if a bundle is selling better than individual items sold separately.
Bundles and also be used for a type of experimentation for combining different items together to see which ones sell better together.
Typically if the savings are enticing the bundle should sell more but if the price difference is not meaningful to customers they may decide not to purchase the bundle if they don’t really need the additional items immediately.