Maximizing AOV: Effective Bundle Strategies for Beauty Brands

Skai Lama
July 20, 2023

Did you know that the beauty industry is projected to generate an astounding revenue of approximately USD 571 billion in 2023? Surprisingly, only a fraction of this massive sum, USD 99.1 billion, comes from ecommerce sales.

Despite the rise of online shopping, most consumers still prefer the traditional route of purchasing beauty products from drug stores and mass merchandisers.

To make matters worse, the current sales distribution in the oversaturated beauty market is highly imbalanced.

Established brands with ample resources tend to dominate, leaving aspiring challengers with an uneven playing field. This situation poses a significant hurdle for those aiming to carve out their share of the market.

Moreover, an average American spends between $244 and $313 on cosmetics and personal care products every month. However, in 2022, the average expenditure per visit to an online store was a mere $2.65. When you consider these numbers, it becomes evident that buyers would need to visit a particular online store approximately 100 times before exhausting their spending potential.

So, the question arises: how can beauty brands achieve their revenue goals in such a challenging landscape?

Increase Revenue as a Beauty Brand

There are only three ways for a beauty brand to increase its revenue

  1. Acquire new customers
  2. Get existing customers to buy again
  3. Entice new and existing customers to spend more and increase AOV

Every other tactic is essentially a spin-off of the above three. Let’s dig deeper on how to increase AOV, as it's the most cost efficient method to increase revenue. Product bundling is a highly effective method to increase AOV as it leverages the power of cross-selling and upselling to make the most of your existing visitor base. By offering carefully curated bundles that provide convenience and added value, you can increase the likelihood of customers making multiple purchases in a single transaction.

One of the most cost-efficient ways to drive revenue growth is by focusing on increasing AOV. When customers are already on your shopify store, seize the opportunity to encourage them to spend more.

Utilize effective upselling and cross-selling techniques to showcase complementary products and enticing bundles. By implementing these revenue-boosting strategies, you can drive growth for your beauty brand, expand your customer base, and increase overall profitability.

Curious how to increase your Shopify store's AOV? Learn More here

How do I create a bundle in Shopify?

Product bundling involves combining multiple products into a single offering. The easiest way to create a bundle is by using a dedicated shopify bundle builder app. These apps assist in creating curated bundles that cater to customer preferences.

Research suggests that fixed bundles can result in a 20% decrease in sales volume compared to flexible bundles. What if Shopify store owners could empower customers to build their own flexible bundles? This approach, known as Build Your Own Bundle, allows buyers to mix and match products according to their preferences. This eliminates the need for complicated calculations or guesswork.

By offering flexible bundling, sellers can display complementary products in specific categories, increasing the likelihood of conversion. They can also promote high-margin, low-volume items to boost average order value (AOV) and profit simultaneously.

Shopify merchants can provide users with a customized workflow and a convenient shopping experience. They can apply various discount rules and manage inventory on the backend, while buyers enjoy a seamless shopping process. This win-win strategy benefits both sellers and buyers.

Types of Product Bundles

Merchants can offer different types of product bundles within their Shopify store to encash bundling the right way.

Discounted Bundles

This type of bundle combines complementary products often purchased together at a discounted price. This tactic enhances the bundle’s perceived value. Another way to benefit from discounted bundles is to push higher-margin products at a discount and maintain a decent margin.

Brands can offer customized tiered bundles and encourage users to buy more to secure discounts for the chosen tier. Discounted bundles are a sure-shot method to increase AOV.

Check out how Glam Kit, an upcoming beauty player, is offering Build your own Bundle experience to their customers with Easy Bundles.  

Fixed Price Bundles

Fixed price bundling refers to multiple items being offered at a fixed price. The bundled items often become more valuable when bought together. This strategy helps sellers move inventory fast and reduce the logistics overhead.

The major beauty brand Sephora offers many well-structured fixed-price bundles that customers love while increasing AOV for the store.

Here's another clever example of fixed-priced bundles from Jada Beauty, where they have curated essential skin care products from the same range to offer a mini kit.

Gift-Box Bundles

Special days and holidays see a surge in gift shopping. By offering a curated list of products that go together,  beauty brands can entice users to spend more. They can help customers add a personal touch with a video message or greeting card.

Bombay Shaving Company, men's leading grooming brand, has put together thoughtful gift-box bundles.

Subscription Bundles

Subscription bundles work best when stores are convinced that buyers will need their products regularly. For example, personal care products like oral hygiene or general cleanliness sell periodically. Sellers can lock-in the user by offering a small discount on buying a subscription for an extended period. They can custom-set the timeline of subscription renewal.

For instance, the Australia-based Skincare brand DermaGen offers quarterly subscriptions so users can book skincare products for the entire family.

These subscription bundles help increase LTV and solidify brand affinity and loyalty from continuous use.

Interested in learning how to create subscription product bundles?

Seasonal or Holiday Bundles

Holidays are the perfect time to lure customers into buying more. Certain items sell like hotcakes across the store, and sellers can offer a special bundle that caters to all related needs of a buyer.

Bombay Shaving Company, yet again, nails the Holiday Bundles with a useful and personalized Father's Day gifting bundle.

Holiday bundles help users save instead of spending more on the items purchased individually. Sellers can decrease the transportation and packaging costs that pile up pretty soon for multiple orders to the same address.

Benefits of Product Bundling for Shopify Merchants

Beauty brands can benefit from offering flexible bundles to their customers in several ways:

1. Increased Customer Lifetime Value (LTV): By encouraging customers to buy more in a single visit, their LTV increases, contributing to overall revenue growth.

2. Decreased Customer Acquisition Cost (CAC): Bundling creates awareness of different products and allows customers to make instant purchasing decisions, reducing the extended customer journey and lowering CAC.

3. Clearing Slow Inventory: Bundling is an effective way to sell slow-selling items with limited shelf life at a discounted price, benefiting the store.

4. Savings on Shipping Costs: Bundling products together and shipping them in a single package simplifies returns for buyers and reduces shipping overhead for Shopify sellers.

5. Enhanced Shopping Experience: Sensible bundling provides a streamlined workflow, eliminating the need for customers to navigate back and forth during the checkout process, thus offering a convenient shopping experience.

6. Encouraging New Product Adoption: Bundling can be used as an opportunity to ship samples of new product ranges to incentivize customers to return and make full purchases.

In conclusion, product bundling has proven to increase average order value (AOV) by 20%, revenue by 15%, and offers various other business benefits. Merchants should choose a well-designed bundle builder app that integrates seamlessly and provides an excellent shopping experience for customers.

Want to discover the benefits of product bundling for your Shopify store?

If you're have enjoyed reading this and are looking for bundle inspirations for your shopify store, book a call with us and we will help you create the most memorable and profitable product bundle. You can also download Easy Bundles to offer bundles to your customers right away.

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