The eCommerce sector is constantly advancing. New trends brew up quite often that can help smoothen your business operations. Kitting is one of the most efficient methods of refreshing your online store.
A kit can help you increase sales and decrease costs. It also boosts customer loyalty and encourages repeat purchases. You may be wondering how. Well, read the seven reasons every online retailer should consider using kits, and you’ll know it all!
Importance of Kitting in the eCommerce Sector
A kitting process is a solution used by eCommerce businesses to combine multiple items into a package. This process can maximize the use of space and reduce inventory costs.
Ultimately, kitting saves resources in the long haul. This process entails several methods, but a few common examples include the following:
- Bundling together smaller units of an item. E.g. for five pairs of socks into one large box instead of five separate boxes for each pair.
- Combining multiple products with similar features or functions into one bundle that customers may find desirable. E.g., buying two pieces of clothing along with a belt.
- Grouping items by functionality, such as laptops and laptop bags
- Selling items based on themes like Christmas decors
- Promoting products like buy one lipstick and get 10% discount on another
There are several methods for kitting the items sold on your eCommerce site. Your industry will influence the strategy that works best for you.
For example, if you’re selling clothing and accessories, bundling similar items together can be a great way to save customers money while still offering them more choices.
On the other hand, if you’re selling electronics or office supplies, then kitting may not be as effective because there’s no common theme between the items that could attract customers. Even if they will, consumers are unlikely to buy such pricey things simply because they are appealing.
Kitting is an excellent solution for companies who want to reduce their warehouse footprint. The average warehouse size is 181370 sq feet. The trend has increased over the years steadily.
As the amount of products increases, so does the need for more space to store them. By limiting the number of SKUs, kitting can help you lower your stock requirement. This helps reduce your storage needs by a significant percentage.
Another benefit of this warehousing process is that it reduces time spent on inventory management and shipping/receiving processes. With fewer SKUs in stock at any given time, there will be less to manage on an ongoing basis. This means fewer labor hours spent on these tasks.
Product assembly is putting together a finished product from its components. The manufacturer, the customer, or a third party can do this.
For example, suppose you order an IKEA table online. It arrives in pieces that need to be assembled by you. Now that’s an excellent example of product assembly done by you and whoever else is helping.
If, instead, you order a fully assembled IKEA table that comes pre-assembled in one box with instructions on how to put it together, then that’s an example of product assembly done by someone else. They hire either by Ikea or another company as part of their kitting process.
You’ve probably noticed these items are marketed around Black Friday and Christmas. You find them at big box stores like Target and Walmart with prices marked down because they include some form of shipping savings.
Another significant advantage of the kit is its ability to reduce packaging. While it may not be a significant issue for you, reducing your company’s carbon footprint has become essential to doing business today. In fact, according to research, four out of 10 customers have said sustainable packaging is vital when purchasing products online.
Suppose you’re already kitting your product line. In that case, this should come naturally to you. If one item needs packaging and another doesn’t, simply ship the items together in only one box or bag rather than separately wrapped in individual boxes or bags for each product ordered.
This will eliminate excess waste from shipping materials, such as bubble wrap or foam peanuts, from entering landfills.
Fast and accurate fulfillment is crucial for building strong customer relationships. There’s two-day shipping, a standard practice in the United States. Most major eCommerce companies follow this same model.
If you can’t ship orders out within a 24-hour to the 2-day window, your customers will go elsewhere. And with so many options, it won’t take long before they find another supplier that meets their needs better than yours.
That said, fast and accurate fulfillment is more than quickly getting products into your customers’ hands. It’s also about ensuring those items arrive safely, without damage, to ensure maximum customer satisfaction. If an item arrives scratched or broken, or if an order is missing an item or contains multiple items instead of just one, then the result is going to be unhappy customers.
Thanks to the kitting process, you can ensure that every product is accounted for and stays safe during the fulfillment process. With kitting, you’ll be able to keep tabs on every item in your inventory, so there’s no chance of any mistakes being made.
Cross-selling is a great way to increase sales. While the user is still exploring your eCommerce store, cross-selling suggests similar or complementary products.
For example, if you’re selling shoes and someone clicks on the “buy” button, you can offer them related products such as socks or laces. This can increase your overall sales by encouraging customers who have yet to plan on buying any accessories to do so.
Kitting allows you to cross-sell in two ways:
- Using kitting strategically encourages people who have already bought one product from your store, the item that was kitted, to purchase other items from your store. For example, if I am buying a watch, I might see another item that goes well with it in my cart. A nice pair of leather straps. If I were reading the description of each strap individually instead of seeing all three together at once, would I have thought about getting both? More slowly.
- You can also use kitting for bundling complimentary products for sale together. It’s more convenient and practical than offering them separately under separate listings on your site, thereby missing out on potential sales. For instance, if you are selling a book, you could put together a kit that includes a few pens and highlighters to go with it.
According to a 2020 survey, shipping costs have risen for about half of all U.S. e-commerce retailers. In addition, many consumers are reluctant or need help paying for express shipping on small orders, especially during the recession. Hence, businesses using kitting can offer free shipping with smaller order values and still profit.
Many overlook this benefit because they assume that kitting requires more work than traditional packaging and delivery methods. But in fact, it’s quite the opposite.
You’ll reduce storage, shipping, and handling costs and other expenses such as inventory management or cross-selling/upselling opportunities. In addition, it also creates added value in your product offerings by making them more convenient to buy and, thus, more appealing.
A kitting inventory management system will help keep your warehouse in the right stock. If you limit stockouts and overstocks, your storage expenses will drop by 10%. Hence it is essential to keep inventory levels low. Inventory management is tracking and controlling the amount of inventory in stock.
It includes ordering new items when needed, clearing old ones out, and checking on the current level at any given time. When it comes to managing your inventory levels for kitting purposes, it’s helpful if someone else can take over this task for you so that your team can focus on other areas, such as sales and marketing.
We hope this information has helped you better grasp the merits of kiting. Whether for a small or large business, kitting can help you save money on manufacturing costs, time, and energy when ordering products for your customers.
Remember that there are many companies out there who can help you with both the design and production of your order. The best part is that the entire process happens online, so there’s no need to leave your home office.