Ecommerce brands are always on a quest to find out ways to increase their revenue. While outsourcing fulfilment is the #1 revenue driver for ecommerce brands. But third-party logistics (3PL) providers have the expertise to do much more than order fulfilment— picking, packing and shipping orders to increase the revenue.
Taking advantage of a 3PL provider's value-added services like kitting opens the door to business growth. Rather than being just an extra service, kitting offers an array of benefits—the most prominent being the substantial increase in Average Order Value (AOV). Let's find out how.
In this blog, you will learn what is Average Order Volume (AOV) and how kitting can help you increase your Average Order Volume (AOV) with examples.
Average order value (AOV) is an ecommerce metric that measures the average amount of money a customer spends at the time of purchase. Let's take an example; you received three orders. The order value of these three orders is 1000, 2000 and 500. So, your Average Order Volume (AOV) will be 1166.6.
Knowing the Average Order Volume (AOV) allows businesses to analyse consumer behaviour and determine how much money they are willing to spend to purchase your merchandise. This can help them increase revenue and profit as Average order value is directly proportional to revenue and profit; therefore, an increment in average order value (AOV) means an increase in earnings.
Ecommerce brands are always looking for strategies to increase their Average Order Volume (AOV)— one of them is kitting. So let's find out more about this.
Kitting is the process of combining two or more products as a single unit of sale or SKU (stock-keeping unit).
Instead of selling a single product at a time, an ecommerce brand can bundle similar items together to create product kits, offer special deals, and cross-sell promotions.
The purpose of kitting is to have a ready-to-ship set once a customer places an order to expedite ecommerce fulfilment.
Here are some benefits of kitting:
As you can see, kitting creates a win-win situation for both sellers and buyers. Factually, products make their way into your customer's shopping cart easily when they are in a kit.
Kitting can help you sell multiple products by creating kits that would cost less than purchasing every item in the kit individually. By kitting multiple items together, you can increase the perceived value of a purchase.
Let's take an example; a customer wants to buy a cricket bat. On finding a kit containing a bat, gloves, bag, helmet, ball, and other items, the customer is lured into purchasing it.
The following are a few common examples of kitting:
1. Kitting for products in bulk
One of the simplest types of kitting is to offer a discount to customers who purchase a large quantity of a single product.
2. Kitting for ‘Buy one, get one’ (BOGO) products
Another common form of kitting is a BOGO deal. When customers purchase one product, they receive another product free or at a discount.
3. Kitting for different variations of the same product
When customers purchase one product, you can offer more product(s) as a kit—enabling them to try new styles, flavours, or other options.
4. Kitting for complimentary products
Kitting complementary products that can be used in combination together.
5. Kitting for capsule collections
Kitting a capsule collection in which you can include a selection of interchangeable products that complement each other.
Pidilite is a Chemical industry company committed to quality and innovation. For decades, we have been pioneering products for small to large applications, at home and industry, which have forged strong bonds with people from all walks of life.
Squish town is a premium brand with bath and body products full of mesmerising fragrances. They are blended with the finest ingredients, sourced from all over the world, and lovingly packaged to perfection.
EK by Ektaa Kapoor has a wide range of premium home decor items online. An organised collection of dining and home linen items in India. Glance Distributor handles the distribution for EK by Ekta Kapoor.
Farmley is one of the leading Agri Commodity brands in India. It is a direct-from-farm brand that empowers a community of 1000+ farmers. They have invested the last five years in building the deepest backend linkages directly with the best farms, not only in India – but across the world.
Brillare is a zero-delusion personal care brand born in India, made with the purest natural ingredients. The brand aims to deliver uncompromised hair and skincare and aspires to be a rare sparkling star in the personal care universe.
CraftVatika prides itself on being a home for all handcrafted items. They have teamed up with leading artists having a steep inclination in art and serve eye-warming art masterpieces.
Kitting is a simple but highly effective ecommerce order fulfilment strategy that can help you increase your revenue. Customers relish the option of product kitting as they get better value while spending less. However, the backend function of kitting has to flow smoothly to attain greater customer engagement. To ensure your ecommerce business is ready to utilise kitting, you need powerful workflows to handle it, so you can create an exceptional fulfilment experience to boost your Average Order Value (AOV) and revenue.