Video from Skubana

Tips for a Successful Product Bundle Strategy

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Getting Started with Product Bundling
If you want to boost your ecommerce sales, you can never go wrong with product bundles. Product bundling is a proven retail promotion tactic that helps online sellers move inventory faster, boost perceived value and grow recurring revenue. We're here to help you make bundling an easy, profitable part of your online strategy.
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Transcript

Hi, I'm Matt Rickerby, and I am the director of marketing at Skubana. We're an operations platform focusing on inventory and order management. And we rock at product bundling. Of course, I could give you a demo and blow your socks right off what demo goes and do that. But no, instead, I'm not gonna focus on how it solves those operational hurdles so easily. Instead, I'm gonna give you five tips, five strategies that you have to follow if you wanna be good at product bundling.

And then I'm gonna give you five things you've gotta look at from advanced analytics, or analytics, you gotta pull these things from somewhere. You gotta get these answers if you wanna create a great data-driven product bundling strategy. So, without further ado, we only got a few minutes here. I wanna make this as tight as possible. We're gonna talk about those things to look up.

Number one is your best and worst sellers. You don't have to have Skubana to have this even though it helps. You wanna go in, you wanna pull your top and your worst sellers, and you wanna pair them together and you wanna create product bundles. You don't wanna just do anything. Of course, you wanna make sure you're creating good companions things that go together. You can do this through buyer personas or you can think about segments that, where it makes sense to put these things together. But you need to know which are your top and your worst sellers. And your worst sellers aren't necessarily bad products. Though they often are the things that need to get off the shelf because they're dead stock. They're costing you money being stored at a 3PL or even just in your own warehouse. We know that that costs money. Inventory holding costs. We use that term, right? A data point you can find in some great platforms.

So, anyways, we wanna take our worst sellers and we wanna pair them with our top sellers to move them out the door, get them off the shelves of your warehouse. But we also wanna take a different kind of worst seller. We've got a lot of inventory in our warehouse hopefully, from a new product to a new product line, 'cause we're always innovating, right? So, we wanna move that off the shelf. You've got a great product launch strategy. I'm sure every time when you launch you've got email, and social, you're pushing these things out and you're doing digital ads and you're spending a lot of money on it. Except maybe you haven't considered product bundles. People are already flocking to your top pages. I'm sure that 80% of your customers buy 20% of your product. Bundle with those, bundle with those and get some movement on these items and get some reviews. People review the individual item if you incentivize them, if you push them to, if you promote that page where they're need to leave it. Rather than continuing to compile reviews just on, on that top-selling product which maybe already has tons of UCG. All right.

Number two, we're gonna go a little bit deeper. We're gonna look at annual growth. Worst sellers, you know, something might not be the worst seller yet. Maybe it’s on its way to the worst seller. So we want to look at its depreciation in value. You know, it's costs, overhead costs of storing that inventory and how much it tends to make you while it's sitting there in any given month. It could be going down over time. Hard metric to pull from just anywhere. Maybe you have some really cool spreadsheets where you're doing this, but anyway, you wanna look at that trend over time. Don't just push worst sellers, when they're worst sellers, push them before, get that product ready. Think about it as a launch you're gonna get all this stuff off your shelves especially before the holidays where you wanna replenish with a bunch of stock that you know is gonna move. So, annual growth rates, super important number to use.

The third one is SKU profitability. SKU profitability goes a bit deeper. We don't always just want to push our top sellers. Sometimes our top sellers have really thin margins, right? And we're discounting sometimes 10, 20%. And then if you throw the discount that comes from a product bundle, you could be losing some money. And specifically, you could be losing money on certain channels.

And that's where we use tip number four we wanna look at our listing profitability. That is a layer deeper, right? It's our SKU profitability, but on a per-channel basis. You're just selling on one channel. I guess, don't worry about this, but it is something to think about as a multi-channel seller. You want to figure out if something is costing you like maybe it doesn't make sense to sell a certain product bundle on a certain channel. Maybe Amazon's fees cut into your margins a little too much to sell a bundle on Amazon. Although generally speaking, Amazon is a great place to sell bundles.

Number five, trending profitability. So, not just what to sell. We wanna know when to sell certain things. Products synergy, that companionship, that we're trying to find when we do some of these other reports in this other research that changes over time. That's where you're gonna see sort of incongruous data. You know, during the holiday certain things just tend to go together for whatever reason. And I think product bundles are a much bigger deal during the holidays for gift-givers. When we look at that persona somebody who's trying to hit a $75 Mark, right? Last year, Fred from work, he got you a $75 gift. You don't know why he spent that much, but he did. And you know, this year he's gonna spend the same amount. You look like a schlub last year when he gave him, you know, $30 crappy gift. So, you know, he likes this one thing, it's this gym bag. It's $45.

You got to go a little above and beyond. The site you go to, they built a great product bundle. It's right at that $70 Mark. So you're saving a little bit of money. And, you're able to get him something he wants. Booksellers, do this all the time.

They throw genres together. Cause they know you don't know about that specific mystery-teen-romance-vampire-werewolf-drama collection which author you should be looking for. They bundle it together so you can hit that right number for that gift. There are other ways that this becomes important. But again, look for products energies over time. Look at common carts that happen, you know, earlier in the year, in the spring, in the summer and in the fall. And of course, during the holidays... super important.

Okay, great. So we've got those numbers to look at. Hopefully, that informs our strategy a little bit more than just thinking about buyer personas. Although highly recommend doing those as a practice, no matter what. And now we wanna dive into our strategy.

Strategy number one, this one seems kinda obvious. In fact, all of these seem obvious but I bet you, you're missing at least one of them. If you're doing product bundles today. Lets say you want to create something diverse. You wanna create enough packages that you actually learn something. You roll one out at a time. You're not gonna learn how that differs. We know that those products energies change over time. So, that seasonality is gonna affect like the idea of a test in January versus testing something else in February. Roll enough out, base it on data. But roll enough out to where you'll learn something but not so many that you don't get enough traffic to them.

And I'll touch that with our third tip here in our strategies. So number two, emphasize savings. It's surprising how little this is done or just how poorly this is done. People are buying bundles almost always because there's that slight discount. Otherwise, they would just add these two products together. It’s not as good of an experience, but generally speaking, it's that money they're saving. So why aren't you talking about it? You wanna do it in one or two ways. There's really only two ways to do it. A percentage or an actual dollar amount saved. So if you're gonna test this, and you should be testing most things with your user experience. You want to test that percentage versus that dollar amount. And it probably will make a difference depending on how else you talk about promotions. And once you settled on a way to do it, stick with it, keep it consistent across the user experience that's gonna be important.

Number three, you want to offer these at the checkout counter. This is something we see all the time in retail. How many times you've been to the grocery store, you're standing behind somebody, you got a lot of items today, you're wearing a mask over your face and you just wanna get out of there and get some fresh air. And then the cashier says, "You know, if you buy one more of these, you'll save five bucks." What do they do? You're praying they don't, but they do it. They leave the line to run to the back of the grocery store to grab that thing. The cashier caught them with a sense of urgency that split-second decision and got them to buy. We do this all the time in e-commerce the easy way. It's not an operational challenge to push another SKU right?

Complementary products, upsells, cross-sells. But bundles have always been a little bit harder. So, we haven't done that. So you're already doing this. You're doing with cross-sells and upsells; try it with product bundles. It might make a difference for you.

Tip four, this is tip four and tip five kinda roll together. Tip four, you've got to actually display these. You're not gonna get that traction. You're not gonna learn anything. You're not going to see what works with especially different types of customers. If you don't display them, if you don't push them in email, push it in social, push it in banners or following tip number five dedicate a page to it. Top navigation, put it there where you maybe normally have a discount section and push your product bundles. It's a much more refreshing experience than your discounts with your, just your 20% off. Do a product bundle of the week or a month and push it on different channels. Work with your promotions team. Or if you don't have a promotions team, you know what to do. So, get that done, push it out. I think it'll make a difference for you. Product bundles are so much more refreshing than your typical discounts. And yes, there are sometimes operational challenges to doing these things.

You know, spreadsheets get a little bit confusing, and what you're doing with your inventory and discounting items. And then if you want to unbundle certain things, it can be frustrating. And luckily Skubana was built with that in mind. Our founder loved to do bundles and kits. Truly believed in the profitability that could be achieved with them when he was running his own e-commerce business and the one he still runs today. So, he made sure that Skubana is a software that has a lot of product bundling features built into it. So, if you get a demo from us and please do if you are dealing with any operational headaches, just go to Skubana.com, go to get a demo and book a time with us and ask about our product bundling. I think you'll be surprised how different it is from how other people do it. So thanks for your time. I hope you got a lot out of this and good luck.