Earlier in our annual summary, we mentioned that we have developed new functionality for MBC Bundles App - combination recommendations and automatic bundles. In the blog, we talked about the impact these features had on the bundle structure of our merchants.
Continuing the topic of automatic bundles, let's compare automatic and manual bundles. What are the pros and cons of each type, and to whom are they suitable?
Bundles from the first steps
Immediately after installation, the user can create both - manual bundles, such as combos and automatic bundles. The panel for creating manual bundles (based on recommendations) and the panel for enabling automatic bundles are located next to each other on the dashboard.
The algorithm that selects the optimal combination of products is the same for both tools. It is based on a product’s order history analyzed by AI. Thanks to this, you can be sure that bundles made of recommended products will be relevant and sell well. All the differences are in the bundle mechanics implementation.
Manual bundles usually are physical bundles, i.e., Combo bundles have their own product pages, and you can add them to the collections. You can create a separate one for your bundle deals and add it to your heading menu. The automatic bundles are logical bundles only (they don’t have their own product pages). They can not be assigned to a collection or heading menu. Products are sold together, but on pages of the products the bundle consists of via the product recommendation widget. For example, ‘Frequently Bought Together’ or ‘Best Suited’.
In this regard, what are the disadvantages of an automatic bundle, and what is the advantage of manual bundles?
According to our observations, most stores prefer to create a small number of bundles at the start. They want to try and test. But they make a test without proper coverage of the product catalog. Simply put, one bundle lost in a catalog of 500 products does not lead to a dramatic increase in sales. But manually creating 50 bundles is a challenge.
In this situation, the automatic bundle shows itself best. Enabling the automatic bundles and letting the system function for at least a couple of weeks or a month is enough to see an improvement in overall sales. Automatic bundles instantly create the necessary coverage and use only the products in demand. Therefore, the positive effect of using bundles is felt faster due to using the automatic ones.
On the other hand, if there is a small amount of data on orders, let’s say the store is new and has not yet reached a thousand orders, then the quality of the recommendations may turn out low. Automatic bundles will be able to achieve optimal efficiency only over time, when the required data array is accumulated. In this case, a common sense and experience of store sellers will be useful when creating bundles.
So, to sum up, automatic bundles from the start are well suited for sellers with a wide range of products or accumulated sales data. Manual ones may be more effective for new or small projects, but it will take a long time to reach the optimal number of bundles in collections until they become noticeable to the buyer.
Illusion of control
The second important aspect regarding automatic bundles is process control. In the case of automatic bundles, you get a lot of offers quickly and with minimal effort. But at the same time, all of them are presented in the same format (up-sell widgets on the product page), offer the same discount percentage, and do not take inventory into account. The analysis is based on the order data, not supply. As a result, a new promising product is not included in the offers. You may also need to set a low discount rate due to the large number of low-margin products in the catalog. All this can make offers less attractive to customers. What to do?
You need to take the process into your own hands: set up bundles manually. Then you choose the optimal bundle mechanics, discount rate, whether to include new products without order history in combinations. You can also add exclusive selling content to the bundle page, which would not be in the automatic widget. And place the offer wherever you like it on the site, not just on the product pages.
Manual bundles are great introductions to seasonal sales campaigns. Whereas the automatic bundle is more of a tool for daily use.
Every day we all become more and more convinced of the usefulness and necessity of automation and AI, however, careful manual work remains relevant. It is obvious that a balance needs to be found between these tools. Their ratio in your business will depend on the industry, the amount of accumulated data, the size of the catalog, and the dependence on seasonal sales. Let's summarize today's theses in the table: