Merchants sell more when they sell kits and bundles. It’s easy to see why. And with the holiday season approaching, shoppers will be looking for value while merchants will be looking to squeeze in as many sales as possible.
As shoppers come to expect more personalization and purchasing options, merchants are tasked with finding the best ways to meet the demands.
During the busy holiday season, shoppers are looking for ways to maximize their purchasing and increase the value provided to them by retailers. They are also looking for efficiency in terms of their time and money as they select gifts for friends and family.
And merchants, in this consumer-centric world, are always looking for ways to provide exceptional value and deliver what customers want. Providing this value is no longer a luxury to merchants, it’s vital for survival.
What if this need for efficiency on the part of the shopper could also lead to more sales for you, the retailer?
Offering kits and bundles is a surefire way to both give shoppers the value and efficiency they are looking for as well as boost your bottom line.
What are kits and bundles?
Simply put, kitting or bundling means selling multiple, related products under one SKU, often at a discount. Typically a bundle would be similar items grouped together, while a kit is more like a set of related products that are codependent on one another.
Traditionally, kits and bundles can be seen as fundamental to retail. Simply because the use of one product necessitates the other. Kits and bundles are sold out of a basic necessity to make something functional for the end user.
A Real Life Example
Kits can enhance the shopper’s experience by offering them everything they need to get the most out of a product (and sometimes more). For instance, a tea shop might create a kit that includes an assortment of tea bags,a teapot, cup and reusable stirrer stick. And the value for the shopper is that the kit is more cost-effective than buying each item individually.
Using the example above, a bundle might simply be a variety pack of different teas. The possibilities are numerous here. Perhaps the tea shop wants to encourage customers to try new varieties, thereby creating more customer loyalty. Or maybe they have a slow seller that they need to move.
Regardless of the reason, creating the right bundle is a win-win. Your customer’s purchase goes farther, and you sell more.
Why is maximizing kits and bundles important?
Kits and bundles are practical all year long, but why are they such a hot commodity around the holidays?
Think value and its relationship to the psychology of gift giving. In the rush of the holiday shopping season, shoppers are often looking for ways to save both time and money while at the same time getting meaningful and thoughtful gifts for friends and family.
And shoppers now have infinitely more buying options.
In order to cut through the clutter and make sales, offering kits and bundles also gives merchants additional insights into what motivates shoppers.
So how do you cut through the clutter?
By offering savings and offering value. Savings can be in terms of both money or time (ever noticed how it seems like there is never enough time around the holidays? Shoppers do too).
Value can be thought of in several ways. Creating a clever or unique kit or bundle can enhance the value of the purchase, or in this case, gift.
Aside from that, most merchants spend much of their time trying to understand their customers wants and needs. Kits and bundles can help them discover creative ways to market and sell products that they may not have thought possible otherwise.
How to create the perfect kit or bundle for extra holiday sales
You don’t necessarily have to add new products to your offerings in order to create a unique kit or bundle. Sometimes you just have to get creative about what you already have.
Chances are that you already have everything you need in stock.
But knowing what to bundle and how to price it can be a little trickier.The answer to that question likely lives in your past sales data.
Take a look at your top sellers, and then filter to see if there is another product that is frequently bought together. From there, you can back into a price point that creates a healthy profit margin for your business, while at the same time offering a value to the customer.
Another way to look at it is to use bundling as a way to unload dead stock. Offering a slow moving item to customers as a gift is a lot more enticing than having it take up space in your warehouse.
Bundles can often make a great contest prize, if that is part of your marketing strategy to drive extra sales. This can be done at any time of the year, especially in the slower sales months of the year.
Tips and tricks from the experts
As one of the first inventory management software providers, SkuVault has been around for quite a few holiday seasons.
We’ve also helped many sellers make the most out of kits and bundles year-round. Here are a few things we’ve learned along the way:
- Create a clear plan for how to keep the SKU for the kit or bundle separate from the SKU for each individual component. This would seem like a no-brainer, but if you are also selling each item individually, you will need to make sure you keep the inventory counts up to date so as not to oversell.
- Which brings us to Quality Control. Make sure that you are employing an efficient pick, pack and ship process to accommodate the bundles. Planning for kits and bundles is also a good use of the wave picking method.
- Plan for shipping, especially of a bundle. Bundles will be larger than any single item you regularly ship out.
- Your ad spend and return on investment. Merchants, particularly in eCommerce, are reporting that they have to spend more and more just to get sales traffic to their websites or to have their listings seen on Amazon. Using kits and bundles and even generating a buzz with a giveaway like we mentioned above, is a good way to maximize return on investment.
How should I go about choosing which items to bundle together?
Think logically about which items best go together that not only add value to each item, but could also help your bottom line.
How should I promote the bundles in my online store or sales channels like Amazon or eBay?
Position them as the ‘better’ value when compared to price of each individual item. Use stunning photography and perhaps even a small video showing the value.
What changes do I need to make to workflows to accommodate kits and bundles?
Probably not much at all. Other than creating a separate SKU for the bundle or kit, and then keeping a close eye on the individual SKUs to prevent overselling. Also, make sure you have a plan for packing and shipping if for some reason your kit or bundle is larger in size than the items you typically sell.
What do I need to do to train temporary or seasonal workers on how to do kits/bundles?
If you have created separate SKUs, updated the workflows, and are using an inventory software like SkuVault, then processing a kit or bundle will be virtually the same as any other product,
In order to create the correct product listings to support kits and bundles, you first need to have clear control of your inventory levels for each item.
The most important part of inventory management for kits and bundles is to prevent overselling the individual items that make up the kit. And in turn, making sure that you don’t overstock the others.
And just be sure to give yourself extra time to set up if you’re offering them as a holiday promotion. Or at any time of the year really.
After that, you are ready to start selling!