Product bundles are a smart move for DTC brands because it benefits everybody. For businesses, product bundles are a great way to boost sales which in turn increases average order value (AOV). It also increases profits, saves marketing costs, clears slow-moving inventory, and also builds customer loyalty. For customers, it's a way to save money, shop conveniently, and discover new products. It's a win-win for both parties. In a competitive market, using bundles can set your brand apart and increase the number of returning customers.

They boost sales and profits while making customers happier. Bundling related products offers shoppers convenience and better value, encouraging them to spend more. It's a win-win. Plus, it builds loyalty by simplifying the buying process meeting specific needs. In a competitive market, using bundles can set your brand apart and increase the number of returning customers.

💡 Product bundling is a marketing strategy that intelligently combines multiple related or complementary products into a single package or bundle. This approach provides customers with convenience, cost savings, and a comprehensive solution to their needs. Meanwhile, businesses can leverage this strategy to increase average order value while controlling marketing and distribution costs.

In this article, we will talk about a six-point framework to design your product bundling strategy.

Selecting customer segments to design bundles around

Let's start with the most important part of a product bundling strategy: the customer. Customer segmentation is critical for DTC brands aiming to create effective product bundles. It involves dividing your customer base into distinct groups based on shared characteristics, behaviors, and preferences. You can tailor your Shopify product bundles to meet the unique needs of each segment, thereby boosting the appeal and effectiveness of your offerings.

For example, let's take a look at Amazon's approach. They do this by segmenting their vast customer base by factors such as buying history, browsing habits, and location. This allows them to create highly personalized product recommendations and bundles. For instance, if a customer frequently buys gardening tools and outdoor furniture, Amazon might suggest a "Gardener's Paradise" bundle, including gardening tools, outdoor seating, and accessories. According to a study by McKinsey, 35% of Amazon sales come from product recommendations, including bundle recommendations. Another study by Forrester states that this type of product bundling has a success rate of 50%-60%. This is evidence of how effective product bundling strategies can be when carried out effectively.

Using your customer data to inform your product bundles

One way in which you might want to build a customer segment is by identifying which customers bought a certain product and studying their shopping habits. This is where you can use your store data to your benefit, and learn your existing customers' purchasing preferences.

You can use Airboxr to do this. Run our Buyers by SKU Hop, which automatically analyzes your orders to create a customer segment of people who purchased a particular item in your store. Not only does it show your list of customers, but it also shows a vital piece of information - namely, which other items the customer purchased together in the same order as the SKU you're looking up. This gives you an indication of which products are currently already being bought separately, so you can determine if the product you're looking at should be bundled with any other product.

Read: How to build segments of customers buying specific SKUs from your Shopify store?

Analyzing purchases bought together by specific customer segments is one of the product bundling strategies you should be using in your store. Understanding your target audience through segmentation empowers DTC brands to design bundles that resonate with specific customer groups, increasing the likelihood of sales and customer satisfaction.

Selecting complementary products for your Shopify product bundles

Product selection is the next critical part of designing a product bundling strategy. Complementary products, those that naturally go together or enhance each other's value, should be at the core of your bundle creation strategy. We already see it in action with popular brands around us.

• Starbucks: Starbucks is a master at creating complementary product bundles. Their "Morning Essentials" bundle combines coffee beans, a French press, and a coffee grinder. These items are naturally linked, enhancing the customer's coffee experience and driving sales of related products.

• Microsoft: Microsoft's Office 365 bundle is another standout example. It includes Word, Excel, PowerPoint, and more—all software that complements each other seamlessly. Customers get a comprehensive suite of productivity tools, increasing the bundle's appeal.

• Apple: Apple's "Pro Apps Bundle for Education" bundles together all the creative apps that a student might need.

• McDonald: McDonald's Happy Meals is an example of product bundles. Instead of selling a burger, soda, and french fries separately.

So how do we create product bundles?

The good news is that if you have been running a store for a while, you already have the data needed to identify which two or more products to bundle together. To do this, you need to answer three questions:

1. How often are two specific products bought together? If a high proportion of your sales are already being bought together, then it’s worth considering building a bundle with them.

2. What’s the likelihood that a specific second product will be purchased in the same cart as another product?

3. Does adding a product to the basket increase the likelihood of another specific product being purchased? If so, you should probably bundle them together.

This may sound like a lot—and it often is—but Airboxr can help you conduct this analysis with a single click. Just create a free account by installing our Shopify app.