February 1, 2022
What Is Kitting and Why Is It Important for Brands Selling in the Home Category?
This blog post was originally published by Deliverr, which is now Flexport. The content has been adjusted to fit the Flexport brand voice and tone, but all other information remains unchanged. With the merging of Deliverr’s services (DTC fulfillment, B2B distribution, and Last Mile delivery) into Flexport’s existing international freight and technology services, we’re now able to provide merchants with true end-to-end logistics solutions spanning from the factory floor to the customer’s door.
In short, kitting is a strategy that retailers use to group different, but related items together to be sold as a bundle. Kitting can combine the SKU of multiple items into one SKU that represents the products as a single item. This streamlines picking and packing within your warehouse—saving your brand time and money.
Kitting can offer buyers an option to customize the bundle, allowing for a more personalized shopping experience for the consumer. Subscription boxes are a great example of businesses grouping items together to sell as a single unit. This trending option for merchandise can help retailers grow their brand through strategic product placement. This is especially marketable for the home goods sector, where items can easily be grouped together based on kitchen essentials, seasonal decor, or office organization. Creating kits collections of items for sale can make your products stand out and help your business grow.
Five Benefits of Kitting
1. It Can Lead To Larger Purchases
Offering promotions and deals on bundles incentivizes customers to make larger purchases. Instead of having to click on three items, a set of complementary items can be added to their cart with a single click.
The same benefit above applies to merchants – pairing items together and offering an incentive for buying an assortment can boost sales and encourage buyers to make larger purchases.
2. It Provides Better Product Visibility
Kitting also makes products more visible and allows potential buyers to consider additional items offered by your brand. Much like a sales associate in a brick and mortar store would offer suggestions for products to someone browsing the store, bundles serve as a recommendation for coordinating items for buyers to consider.
3. It Can Help Eliminate Dead Stock
Products that have the potential to become dead stock in a warehouse can benefit from being grouped in a kit.
4. It Provides Savings on Fulfillment Costs
From a fulfillment standpoint, bundling items results in fewer purchase orders. It makes the task of picking and packing more efficient if products are packed together. Kitting can make your warehouse more efficient as the most popular items can be organized to be easily packaged together for quick shipment.
5. It Provides Savings on Shipping Costs
Shipping costs can also be cut down when multiple items can be packaged together instead of individually. This helps save time and money while getting products quickly delivered to customers.
Why Is Kitting Important for Home Goods Brands?
When consumers are designing their spaces at home, they rely on inspiration from various platforms. Whether it’s a Pinterest board, display ad, or influencer, potential buyers can often click and be led to a link for the items that coordinate so well in the picture. By creating collections that reflect the trends in home decorating, your brand can showcase new and popular products and engage customers with a complete design versus a single item.
In other words, home goods have the versatility to be packaged together to create a specific design. Bundles seamlessly work in the home decor sector. For example, a customer looking to refresh a bathroom might start by browsing towels. If they find the design they like, they might add on the matching washcloths or bath mats.
By coordinating these items into a collection for the buyer to add to their cart with a single click, you’ve made their shopping more efficient and boosted sales by incorporating all of the items that complete the set. Marketing these kits as a deal encourages shoppers to add the bundle to their cart.
It also prevents you, the retailer, from having an inventory of mismatched items that may be harder to sell individually. Below is an example from Nestset that does just that:
Another great example comes from TushBaby. While not home goods specifically, those who have a new baby usually need a set of different items to get from point A to point B with their newest family member. Therefore, the company created several bundles to make things easier, and the bundles cost less than if you were to buy each item individually thanks to the benefits mentioned above.
Retailers can also offer gift options that can help buyers to customize different home decor items into a single bundle. For example, offering a gift set for items such as a blanket, picture frame, and candle makes it easy to market the collection for a potential gift giver.
If the customer is also able to choose the scent of the candle, the color of the blanket, and frame size, now you’ve created a more interactive shopping opportunity for the consumer. All while encouraging the sale of three items together as a complete set, instead of a single item.
How Can Brands Make Kitting a Part of Their Sales Strategy?
Kitting can be a great way to increase online sales, but how can a business make it work logistically? In order for an eCommerce retailer to use kitting, having real-time inventory data is essential. If a single part of a kit is out of stock, the collection can’t be completed and offered for sale.
Utilizing a third-party logistics company (3PL) like Flexport will allow your business to take the uncertainty out of managing inventory. The optimized inventory software that warehouses use can ensure items are in stock and available for purchase.
Warehouses can offer kit assembly, prepackaging kits for even faster fulfillment, and storage options for products that create an efficient flow for your fulfillment team. When customers are able to customize their kit by choosing specific products, a 3PL can pick and pack items for fast and accurate fulfillment.
Prepackaged kits along with packed-to-order bundles can be handled through 3PL fulfillment. This means warehouse workers can create a specific kit with a mix of products since the inventory will be in stock and tracked with up-to-date information. It takes the headache away from you, the retailer, so that you can focus more on building your brand.
Kitting can be a valuable tool for brands to offer popular products in collections that appeal to customers. Home goods brands can help buyers purchase related products by focusing on particular design elements, highlighting decor for particular rooms, or highlighting seasonal items. By analyzing products that are frequently purchased together, your team can prioritize items for kits.
This can help your warehouse become more streamlined and efficient. This option can create a better shopping experience for your buyer while increasing sales and product visibility. Consider how your brand’s products could benefit from purposeful collections that will appeal to your consumer.
The contents of this blog are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. We do not guarantee, represent, or warrant the accuracy or reliability of any of the contents of this blog because they are based on Flexport’s current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This blog has been prepared to the best of Flexport’s knowledge and research; however, the information presented in this blog herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this blog.