Remember the last time you had ordered your food or any electronic device from some popular e-commerce platform. Did you want to buy a single product but end up buying some related products together for lucrative discounts or offers? This is called “Bundle Pricing” when a customer gets two or more products together which are highly correlated in many senses along with a discount. The Bundle Pricing gives the customer freedom of choice and they get benefited from a set of products in a single purchase and on the other hand the company moves more products in every single sale which adds more value in return.
Many in fact! It simplifies the buying experience, it is always profitable from the customer’s point of view to buy as a bundle and get a relatively lower price. Customer sentiment turns to positive when they feel they are in charge with many available options. Overall customer engagement increases over time.
The seller can sell two or more items together instead of one and can have increased profit from a single sale. It reduces marketing and distribution costs, and it maximizes sales volume, plus it reduces inventory waste. Price bundle has many strategies, e.g. the business owners can bundle leading items with slow-moving items together to increase overall sales, the bundle can be made based on similarity of the products or with mixed products as a set.
Item-based filtering is a field of interest for many reasons. It recommends the products which can be combined together depends on their similarity. We can calculate the similarity between the products based on their direction in the feature space. The more relatable products bundle together, the bundle will be more effective. But, this is not the end, we also suggest the best possible discount for that bundle. For example, let’s say a user can pay up to Rs. 500 for an Rs. 480 shirt but only willing to pay Rs. 330 for a shirt of Rs. 350. Then, a reasonable customer will only buy both the shirts together as a bundle only if the difference between bundle price and Rs. 480 is lower than Rs. 330.
Product bundles can be done using different techniques. Users of our application(uniQin.ai) also have the freedom to bundle products as per their own business requirements. Some of the popular product bundle techniques are as follows
A new product is bundled together with a popular product for promotion
Customers can choose any products from defined categories and have a discount. Here, the customer can create the bundle from a defined set, e.g. any two pieces of shirt can be bought together for Rs. 1000. This encourages bulk buying of goods.
In this bundling technique, the seller pairs a fast-moving item with a slow-moving or perishable item. This helps to clear the inventory faster and that can be used for fresh stocks.
Product bundle is a popular concept among customers. It saves their time looking for similar products and also helps them to try new products. This helps businesses to generate more sales and move the bigger volume of products at ease. These are the reasons why product bundling is so popular with the companies for their strategy of growing the business volume.