1) Increase potential order value 

A study from Harvard Business School reviewed a strategy Nintendo used to sell their games and consoles. Instead of selling each product individually, the company bundles two products together resulting in over 1 million dollars in revenue and over 100,000 units sold. Conversely, when Nintendo only bundled games together, sales decreased 20%.

While this phenomenon is not limited to Nintendo, the study itself shows the potential bundling has to increase order value and revenue. The main takeaway? Bundling items increases sales because it helps to increase the customer’s perceived value of products. Additionally, bundling helps increase average order value because it encourages shoppers to purchase more items than they would otherwise. This, in turn, usually results in a more expensive total transaction.

2) Get rid of slow-moving inventory 

Product bundling can be a great strategy to get rid of surplus inventory or push out slow-moving inventory. The logic behind this is simple: bundle popular products with slow-moving inventory to help sell less-desirable items.

Similarly, when you stock an older product with a more popular one, you create a new product. This gives a kind of new life to your old inventory.

For example, many fast fashion retailers sell jewellery bundles with more popular items like earrings and necklaces with less popular accessories like anklets. By tying the less popular anklets to more popular and complimentary goods, these retailers are able to move more anklets overall.

3) Steer customers away from pricing individual items

Bundling can be used to provide discounts, engrain upsells into packages, or reduce price comparison shopping. All of which are effective ways of increasing revenue, as they steer customers away from pricing individual items.

We can see this psychology play out every time we purchase a new Apple product. While any of us have the correct charger at home, Apple still includes a “free” changer with the purchase of your new device. We all know that the charger is not free, rather it is factored into the final ticket price. Apple, like many other companies, chooses to include a charger, because they know that many of us would not purchase a new charger on our own given the opportunity.

Similarly, when products are left unbundled, each new product presents a new, unique buying experience for the customer. This can lead the customer to cut corners or even refuse purchasing anything all together because they feel overwhelmed. When a customer is presented with a bundle, however, even if it includes some items they do not “need,” many will opt for the single price tag in order to save time, effort, and stress.

Pricing aside, bundling allows you as a retailer to ensure that each customer receives the most upgraded experience possible. If you are selling hair tools for instance, you know that including hairspray, leave-in-conditioner, and dry shampoo, will create the best results when using your heat tools. By including these items, you are leaving customers will the best representation of your brand.