Average order value
More items or more units in each order
More units shoppers intended to buy when a price promotion was stated for multiple units, Manning and Sprott found
Peer-reviewedManning and Sprott, Journal of Retailing (opens the source)
Work it out in $ with your numbersDoes a bundle pay for itself in your store?
The finding, and how the apps work on it
The effect “is contingent on the magnitude of the quantity specified in the offer and the rate of product consumption”, and it measured intentions, not orders. Drechsler and colleagues found “X for $Y” did better than “X + N free”, and that quantity requirements of four to five units showed the largest effects, in functional categories but not hedonic ones. BulkPilot’s tiers are 2 and 3 units; quantity 4 and above continues at the Buy 3 rate.
When a shopper adds the pot and the card to the plant, or takes three instead of one, the order is bigger and one pick-and-ship is spread over more revenue. In a McKinsey retail case, shoppers judged a two-item bundle on its one total price.
- BundlePilot: shoppers build the bundle themselves and see one total.
- BulkPilot: Buy 2 and Buy 3 prices next to Add to cart.
Peer-reviewedDrechsler et al., European Journal of Marketing (opens the source) Consulting firmMcKinsey, “Dynamic pricing in retail” (opens the source)