Product Bundling Strategies and Examples for Higher AOV

Sabena Suri
August 4, 2022
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Product Bundling Strategies and Examples for Higher AOV

There are many ways to merchandise products online: upsells on product detail pages, cross-sells within a cart, and post-checkout offers. These ecommerce merchandising tactics are easy to personalize with software, but a few tactics require the special touch of a merchandiser. One of these is product bundling.

With carefully curated products, product bundling can create an experience that lasts a lifetime. Product bundling strategies include bundling your own products (native), partner products, or a mix of the two. In this article, I’ll provide an example of each. But first it’s important to talk about curation and how it sets the stage for a successful product bundling strategy.

The best product bundling strategy starts with curation.

The success of your product bundling strategy is largely determined by how well you’ve curated products for your digital storefront. Are you choosing products to sell based only on data or what you think people want? Or are you selecting products that speak to why you launched or joined a particular brand in the first place?

In this sense, curation is a “filter” that helps people find what they really want. It also prepares the way for an effective bundling strategy since bundling takes that curated selection and makes it even more exciting. Bringing the right products together to engage someone in a nuanced way while simplifying their online shopping experience is what product bundling is all about.

Product bundling also benefits your bottom line. Customer lifetime value (LTV) can increase by 47% and average order value (AOV) increases with greater personalization that comes from merchandising tactics like bundling that are more hands-on.

“Curation expands the possibilities of what can be merchandised in ways that will feel serendipitous to the consumer as opposed to just merely trying to sell stuff.” Barry Enderwick, Better Marketing

Product bundling strategies and examples

The product bundling examples featured below are from Fellow, the premium coffee equipment brand. They have meticulously curated their own products and partner products on their ecommerce site. Because they started with thoughtful curation, the bundling options feel extra special.

🗒️ Note: This article offers insights on product selection for your product bundling strategy. For product bundling tactics such as applying discounts, emphasizing savings, and turning bundles into subscriptions, check out this article.

Bundle native products for a complete store-to-door experience.

A native product bundling strategy is used by brands that own design and manufacturing for multiple products. For example, Fellow has plenty of native bundling options since it produces everything from world class kettles and canisters to grinders and sieves. 

Exceptional products aside, a key benefit Fellow has over a dropshipping marketplace that also offers coffee equipment bundles is that Fellow can ship every item in the bundle in the same package and have them arrive at the same.

A native product bundling example is the Precision Electric Set. In this bundle, Fellow presents its award-winning products to coffee aficionados who want to upgrade from mid-grade products they bought from Bed Bath & Beyond, Williams-Sonoma, or their local mall years ago. 

A further touch of personalization is applied by surfacing product variants and letting shoppers pick the color of their grinder and kettle.

An example of bundling native products (kettle and grinder)

Benefits of native bundles

  • Ship the complete bundle directly from your manufacturer or warehouse.
  • Position your product in a more memorable, and often giftable way.
  • Move inventory with a combination of bestselling and slower-moving products. 

Considerations for native bundles

  • There are finite bundling options if you only have a few products.
  • Bundles are a harder sell for new customers who are not familiar with your brand.
  • Discounts are often applied to get around this and incentivize the sale.

Bundle native products with partner products to enhance an experience.

A native and partner product bundling strategy is used by brands that design and manufacture their own products but also sell products from strategic partners. These partners are often brands themselves and create products that align with your brand ethos but not your product roadmap.

The key benefit of this strategy is that you can create bundles with products you don’t have. For example, Fellow partners with coffee roasters like Coava to power a curated marketplace, membership program, and starter bundle. When someone buys a bag of coffee through one of these avenues, it’s shipped from the coffee company to the customer on Fellow’s behalf.

A native and partner bundling example is The Rookie Kit. It contains everything an aspiring coffee aficionado needs to start connecting on a deeper level with their coffee, including the coffee. It speaks to shoppers who want to trade their coffee routine for a coffee ritual, a decision that is nuanced and hard to merchandise for with data and software alone.

An example of bundling native products (kettle and pour-over set) with partner products (bag of coffee)

Benefits of native + partner bundles

  • Incentivize shoppers to purchase native products by including a partner product.
  • Increase bundling options without increasing inventory and overhead costs.
  • Partner with brands in a strategic and meaningful way.

Considerations for native + partner bundles

  • Partner products that are dropshipped arrive in a separate package.
  • Introducing partner products means managing partnerships and commissions.
  • The quality of partner products impacts the perceived quality of native products in the bundle.

Bundle partner-only products to create new bundles without new inventory.

A partner-only product bundling strategy is mostly used by brands that have a marketplace. For example, Fellow has a coffee marketplace that features the “latest coffee obsessions” from their team.

Similar to bundling native products with partner products, the success of this strategy depends on the quality of the products you sell and your alignment with the brand. For example, a high quality product designer like Fellow does not bundle Starbucks coffee. And, because they are an intentional brand, they don’t bundle coffee from companies with questionable practices.

In the product bundling example below, Fellow bundles products from three different brands that all contain detailed information about coffee origin, elevation, varietal, process, and tasting notes. The quality of the coffee matches the quality of the coffee equipment they sell, and perfectly complements it.

An example of bundling partner products (bags of coffee from different partners)

Benefits of partner-only bundles

  • Create new bundles without holding any new inventory.
  • Create partner bundles (coffee) that are tangential to native bundles (coffee equipment).
  • Increase marketplace AOV by bundling around a theme (Ethiopian coffee).

Considerations for partner-only bundles

  • Products in bundles with multiple partners are often shipped in multiple packages.
  • The quality of a partner’s brand and products reflect on your own, so choose wisely.
  • Acquiring product data is important for making partner bundle PDPs as robust as native bundle PDPs.

Choosing product bundling strategies

You can get started with one of these strategies or experiment with all of them like Fellow. But, by rule of thumb, have your curation strategy inspire your bundling strategy. For example, if you have multiple native products like Fellow, start with native bundling. Then, if you start curating products from other brands, experiment with native and/or partner product bundles.

Choose the best products and simplify partnerships.

Canal solves challenges related to product quality and partnership management to make merchandising and bundling partner products easy. In addition to maintaining a curated network of vetted brands with quality products you can sell, Canal automates partnership agreements, commissions, and payouts. 

In the second and third product bundling examples above, Canal’s brand partnership tool is used by Fellow. Select coffee brands that partner with Fellow also have the opportunity to join Canal’s network as a supplier to sell their products on other storefronts. It’s a full-circle partnership platform where the world’s best brands come together.

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Sabena Suri
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