Manual Bundles vs. AI Bundles: Which is Right for Your Business?

Ellie Ho

September 24, 2024

•

3 min read

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With millions of online stores vying for customer attention, it takes more work to stand out and drive revenue growth. Industry giants like Amazon have mastered the art of upselling and cross-selling to generate an impressive 35% of their revenue. So, what’s their secret?

The answer lies in strategic product bundling.

When it comes to eCommerce product bundles, there are two distinct approaches: manual bundles and AI-generated bundles. Each method offers unique benefits and challenges. This article will compare and contrast both to give you an idea of the best choice for your business.

The Power of Manual Product Bundles

First, let's discuss the regular handpicked product bundles that all merchants are familiar with.

Manual bundles are the traditional approach, where you take over the reins and curate the products on your own. These selected items will be bundled together and often sold at a lower price. This method gives you complete control over the entire process, from product selection to pricing and discount application.

Imagine you run a clothing store and want to offer a “Summer Style” bundle. You might choose a pair of sunglasses, a stylish straw hat, and a breezy linen dress, carefully curating a cohesive look that appeals to your target audience. Manual bundles excel in situations where you have explicit product pairings, like matching outfits, complementary accessories, or specific product sets.

Benefits of Hand-picked Product Bundles

A clear advantage of this type of bundle is its relatively straightforward creation process. You simply select the desired products, determine the bundle's price, and set any discounts or promotions. This level of control allows you to create niche, custom bundles tailored to specific promotions or inventory adjustments.

Increased Average Order Value (AOV): Bundling encourages customers to purchase more items together, which can lead to a higher AOV.
Enhanced Customer Experience: Curating related products into bundles can simplify decision-making for customers, making it easier for them to find complementary items.
Inventory Management: Bundling can help move less popular products by pairing them with bestsellers, helping to clear out inventory.
Cross-Selling Opportunities: Bundles encourage customers to try new products they might not have considered purchasing on their own.
Perceived Value: Customers often perceive bundles as offering better value for money, which can increase conversion rates.
Improved Marketing Strategies: Bundles can be promoted through targeted campaigns, highlighting savings and convenience.
Loyalty and Retention: Offering exclusive bundles can encourage repeat purchases and enhance customer loyalty.‍
Differentiation: Unique bundles can help your store stand out from competitors, particularly in saturated markets.

Steps to create a manually curated product bundle in Boost AI Search & Discovery.

However, manual bundling comes with its own set of challenges. For businesses with large inventories, manually selecting and managing bundles can be time-consuming and require constant updates as product availability changes.

The Magic of AI Predictive Bundles

Compared to manual product bundles, AI-generated bundles are a modern approach that leverages artificial intelligence's (AI) power.

Boost AI Search & Discovery offers two types of AI-powered Predictive Bundles that are automatically generated based on customer behavior and data analysis.

“Frequently Bought Together”: suggests bundles from products that are usually within the same cart. The models dig into cart-related actions, such as add-to-cart and purchase events.
“Related Items”: analyzes product attributes like descriptions, vendors, tags, and metafields to recommend bundles from complementary products that work well together.

Think of a customer browsing your online store for a new coffee maker. An AI-powered bundle might suggest a matching coffee grinder, a set of reusable filters, or even a selection of gourmet coffee beans. These recommendations are dynamically generated, adapting to user behavior, current trends, and even inventory fluctuations.

Benefits of AI-generated Product Bundles

Personalized Recommendations: AI can analyze customer data and behavior to create tailored bundles that match individual preferences, increasing the likelihood of conversion.
Dynamic Pricing: AI can optimize pricing for bundles in real-time based on demand, competitor pricing, and customer behavior, ensuring maximum profitability.
Automated Insights: AI can provide insights into which products are frequently purchased together, helping businesses create effective bundles based on actual buying patterns.
Inventory Optimization: AI can help manage inventory by identifying slow-moving items and suggesting bundles that include those products, improving turnover rates.
Enhanced Customer Experience: By offering relevant bundles, AI improves the shopping experience, making it easier for customers to find products they want.
A/B Testing and Optimization: AI can automate testing different bundle configurations to identify which combinations perform best, continually refining strategies for higher sales.
Cross-Selling and Upselling: AI can suggest additional products to include in bundles, increasing the average order value and encouraging customers to explore more of your offerings.‍
Market Trend Analysis: AI can analyze trends in customer behavior and preferences, allowing businesses to adapt their bundling strategies to stay ahead of market demands.

This product bundle type is particularly beneficial for businesses with large product catalogs or those experiencing frequent product changes. The automation aspect eliminates the need for manual intervention, saving you valuable time and resources. Moreover, AI bundles can enhance the customer experience by offering highly relevant product suggestions, potentially leading to increased sales and customer satisfaction.

On the other hand, the cost of integrating an AI-powered system is an important factor that businesses must weigh carefully. Despite the higher price of advanced plan tiers, the long-term advantages of automated bundle management and data-driven insights can deliver substantial benefits.

Boost's AI/ML models offer more than just AI Bundles—they also elevate eCommerce search and recommendations with powerful AI-driven Personalization algorithms.

Understanding the Key Differences

So, how do you decide which approach is right for your business? By understanding the key differences between manual and AI bundles, you can make an informed decision that aligns with your specific needs and goals.

Level of Control: Manual bundles offer complete control over every aspect of the bundling process, while AI bundles rely on algorithms to generate recommendations. While this lack of direct control might seem limiting, AI algorithms are constantly learning and adapting based on real-time data, providing a dynamic and personalized experience for your customers.
Time and Effort: Manual bundles require continuous management and updates, while AI bundles are more “set it and forget it”. This frees up your time to focus on other aspects of your business, allowing you to scale your bundling strategy without the need for constant manual intervention.
Adaptability: AI bundles automatically adjust based on customer data and trends, while manual bundles need to be updated manually. This adaptability ensures that your recommendations remain relevant and engaging, leading to higher conversion rates and a more personalized shopping experience.
Customization: Manual bundles allow for highly specific and targeted promotions, whereas AI bundles are designed for broader data-based optimization. While AI bundles might not offer the same level of granular control, they excel at identifying broader trends and suggesting relevant products that might not have been considered manually.
Scalability: AI bundles are ideal for businesses with large catalogs or frequent product changes, while manual bundles work best for smaller, stable inventories. If your business is growing rapidly or your product catalog is constantly evolving, AI bundles can help you manage the complexity and ensure that your recommendations remain relevant and effective.

Check out:

Best Practices When Using Product Bundles

How to Boost AOV Using the First-Ever Predictive Product Bundles in Search

When to Choose Manual Bundles

Classic bundles are best suited for specific situations where you require a high level of control and customization.

Here are some scenarios where manual bundling might be the better option:

Smaller Inventories: If you have a limited number of products and want to offer highly specific product pairings, manual bundling can be a more efficient approach.
Limited-Time Promotions: When creating bundles for seasonal or time-limited campaigns, manual bundling allows you to tailor the product selection and pricing to the specific promotion.
Niche Products: If you sell niche products that don't fit into standard AI-driven recommendations, manual bundling gives you the flexibility to create custom bundles that cater to your specific audience.

When to Choose AI Bundles

AI bundles are perfect for businesses aiming to automate their bundling strategy and harness the power of data-driven recommendations.

Below are cases where AI bundling may be the superior choice.

Large Inventories: If you have a wide range of products and manual bundling would be too time-consuming, AI bundles can help you manage the complexity and ensure that your recommendations remain relevant.
Dynamic Shopping Experiences: If you want to offer personalized shopping experiences that change based on real-time user behavior, AI bundles can provide a dynamic and engaging experience for your customers.
Cross-Sell and Upsell Opportunities: AI bundles can leverage customer data to identify products that customers are most likely to purchase together, leading to increased sales and average order value.

Combining the Best of Both Worlds

For businesses that want a mix of control and automation, combining manual bundles with AI bundles can be a winning strategy. Manual bundles can be used for specific campaigns or promotions where a high level of control is required, while AI bundles can be used for everyday recommendations and cross-selling opportunities.

This approach allows you to leverage the strengths of both methods, creating a robust bundling strategy that caters to your specific needs and goals.

The Future of Product Bundling

As AI technology continues to evolve, AI-generated bundles will become increasingly sophisticated and personalized. Pioneer businesses that embrace this technology at the early stage will be able to offer more engaging and relevant shopping experiences, ultimately leading to increased sales and customer satisfaction.

Boost AI Search & Discovery offers both manual and AI-generated bundles, giving you the flexibility to choose the approach that best suits your business needs. Our platform provides powerful tools for managing bundles, tracking performance, and optimizing your bundling strategy for maximum impact.

Ready to unlock the power of product bundling for your business? Explore Boost AI Search & Discovery's bundle features and start creating winning combinations today!

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Ellie Ho

•

Content Marketing Specialist

September 24, 2024

•

3 min read

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Manual Bundles vs. AI Bundles: Which is Right for Your Business?

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