Increase your ecommerce revenues up to 30% by creating bundles — a detailed to-do
Bundles are grouping of products. Today, we are going to discuss the basics of bundling and its utility. Hopefully we can convince you to try these out on your online store. For the ones among you who refuse to wait, there’s a tutorial on how to implement bundles in Shopify in the second half of the post.
What are bundles exactly?
Bundles are groupings of related products, created to increase the average order value of a store. You can find bundles in absolutely every industry: restaurants, clothing stores, grocery shops…
As far as grouping products goes, the principle is very easy to comprehend.
You wish to buy book A. It costs $15. Book B is similar to book A, for it mainly adresses the same subject, from a different angle. It also costs $15. The shop owner might think, correctly, that: “clients interested in buying one of those two books may also be interested in buying the other one.” And so he creates a special offer: book A or book B for $15 and the one you didn’t pick for $10. Or also, both books for $25. That way, you get more value for less money. So you are happy, and the store owner is happy.
Of course, this only works if people are interested in buying the items composing the bundle at a lower price. If you sell an unrelated book, even tough its price has been lowered, it may not be enough to encourage buyers.
Other configurations are possible. Seth Godin famously talked about selling a book in packs of12 copies for the price of 3. It’s a pretty fair deal! How does one restrain from essentially buying 11 extra books for the price of 2 ? And, because you only read a book once and that every copy is the same, you now have 11 copies to give to your friend. In that case, the bundle allows for ideas to spread much easier.
But how do bundles work?
The website that used bundles the most extensively is Amazon.com. Jeff Bezos & his team have pioneered several online best practices that we have been reusing ever since. In the case of bundles, it is the “frequently bought together” section.
The idea is to increase order value by suggesting to the user that he may want to buy a charger and batteries to go with his flashlight. Though amazon.com typically doesn’t give promotions for FBT items, many online sellers do. This example is showed mostly for the data side of it.
One could think the recommendation system to be pretty simple. You know, just rank order real “frequently bought together” items and offer the top selling ones to the user.
That would work, except, it’s not how it’s done. Many variables are taken into account to generate which products you are going to see in the FBT section. For example, you may wish to buy book A. Book B is still related to book A, and some clients buy both books at the same time. But to know if book B will be suggested to you, a complex calculation involving book B’s ratings, book A’s ratings, book B’s seller’s ratings, and the typology of the users who previously bought both is conducted. This calculation is made for every items that are susceptible to be sold together. It is a huge amount of data, that increases the quality of potential recommendations. It seems logical that Amazon will suggest you buy another item if it has great ratings, is well delivered and has a low return rate.
But you don’t have Amazon.com’s database.
Chances are, you don’t even have 1 percent of what amazon uses to calculate its “frequently bought together” section.
If that is the case, you have two solutions:
You can guesstimate what bundles are worth creating
You can use an intelligent system to create your bundles
If you decide to do it by hand, there’s no secret, you just have to try things out again and again. Here are a few tips to help you out:
Know that there are 2 main types of bundles.
A pure bundle is a grouping of items that can’t be bought separately. In accordance with the academic research, we would advise you against that.
A pure bundle can be split into two categories that might be of interest in some very specific circumstances.
But most of the time, you might want to refrain from using it. They are the joint bundle and the leader bundle. The joint bundle is an association of several products for the price of only one of them. The other product(s) is/are in effect free. The leader bundle is recommended when you sell a complementary product with a leader product, accompanied or not by a promotion. These two techniques allow you to make people try out new products. In most cases, if your products are not perishable or last a long time, you might want to use another system.
A mixed bundle is the exact opposite. Two products are combined, but you let your clients buy them separately if they wish to do so. The bundle has a lower price than the sum of the products taken separately.
If you are looking to increase your average order value, you will have to use a mixed bundle, because a pure bundle simply encourages clients to try out new products. On the other hand, if you want to introduce a new product with a limited time span and that is meant to be bought often, use a pure bundle.
If you decide to use a AI/intelligent system to genarate bundle suggestion, you really don’t have to do much. Depending on the algorithm, the bundles created will be greatly more effective than what you can create on your own. Our shopify app ZeBundler analyses the last 30 days of orders and creates recommandations based on customer behavior. It takes into account what they bought, what products they saw, and how much they spent. It varies depending on the industry, but you can hope for an increase in average order value of 20% or more. Very rarely under 5%.
Let’s say you decide to use our app, which, to us sounds really nice.
How do you use ZeBundler ?
The app is free to install and use for a duration of 14 days. Once you have installed it, it is pretty easy to use.
The first thing you want to be doing is to create a new product. You can fill its name, description and photos. You also want to detail the variants that your product will have, like color or size or any other combination.
Make sure to allow Shopify to track the product’s inventory” so that the app can directly synchronize your bundle orders with your stocks.
You can now access the app menu and create a new bundle. In the example we use, there are already three bundles.
Here are the bundles suggestions. If you don’t have enough data on your site, wait a few days of boost the traffic to allow the app to function.
For now, let’s say you know what you want to create. Go ahead and click on “create a new bundle”. You will be taken to the bundle page. It is empty for the moment:
Select the product you created earlier.
Once the product is loaded in the app, you can see its variants displayed. Depending on the number of sizes and colors your product has, there can be quite a lot of variants to fill in!
You can do it a la mano and select a complementary product for each variant of the bundle. If you decide to go down this road, you will see that you have the ability to choose what variant of the product you want to include. This is because in many cases, if you are selling clothing, you want to be size-specific.
If your original product has too many variants to be filled by hand, do not fret. We have just what you need: the special set tool.
That function was designed for our clients that worked in the clothing industry. We added a few functionalities for other industries since then.
The special set tool allows you to select a second product to add to the original product you added to create the bundle. Once you select the product, you can select a criteria to match its variants with the original product’s variants. There are two criteria : size and color.
There’s also a third option to add a product to each and every variant of your bundle.
Here are the three options, clearly separated:
Let’s say you decide to go with the size. It’s a sensible decision. We load our T-shirt, select the size option and complementary color. The process is the same if you go with the color first of if you decide to just add a product to every variant of the bundle.
Once the variants are added, you can see them on the bundle page.
You can customize the number of variants per option of the bundle. This allows you to create 2 for 1 or other forms of promotions.
If you are finished, click on “create a bundle” and wait a few seconds!
Your bundle in created and can be bought. You might want to go back, hone the description and the pictures. We like to add a link to the bundle page on the page of the item that compose it, to inform users of the promotion.
This is it ! You know how to use ZeBundler. In four minutes, give or take, you will be able to create your very own bundles, and increase your average order value!
The Aizca Team