This is the second blog post in a series on the tactics and benefits of deploying a comprehensive kitting solution. You can catch up on the first post about how to tactically create a kiting system for your organization here.
I’m not kitting around - your brand cannot simply have just any kitting solution and expect success. To achieve repeatable growth with kitting, your business should consider and implement several tactics to ensure a seamless and impactful consumer experience.
Kits Kits Kits
What products go into a successful kit? There are many ways to kit it right. (see what I did there? If you thought that was great, buckle up for a pun-filled blog post ahead)
For example, a retailer could create a "Summer Adventure” kit that includes sunscreen, sunglasses, and a beach towel, or a “Valentine’s Day Survival Box” with a candle, self-care products and a tasty treat. By curating products that resonate with specific activities or events, you enhance your consumer engagement through relevance, ease of use, or even by tapping into fear of missing out (FOMO - my personal favorite fear) with a limited edition kit.
Your brand can also create their own events by either tying into broader cultural moments (think a hit new movie release, mass social event, etc) or by amplifying something hyper relevant to your messaging. You could create a kit with a percentage of proceeds going towards a cause.
Or, your brand could create a kit of the Manchester United kit to celebrate Kit Harrington’s birthday…
Not only did I find a way to write kit with 3 different meanings in the same sentence, it also is a not half-bad kit strategy. Follow me here …
1. Kit - the awesome limited edition box set of amazing products
2. Kit - the uniform/gear that the Manchester United football club wears when they play
3. Kit Harrington - a popular British actor and Manchester United fan
If Kit Harrington was a relevant figure to the Manchester United team, it could make sense to partner together to create a bundle of ManU items into a kit in celebration of Kit Harrington’s birthday.
All kitting about British Kits and unique kits aside, this example showcases that your kitting product strategy is only limited by your creativity to speak to your end consumer and their interests, needs, and wants. The more authentic and thoughtful the kit, the better the sales, and the better the likelihood of repeat purchases.
The Proof is in the Kitting
Don’t just take my word for it, kits are hugely beneficial from a revenue perspective. A Harvard Business School study discovered that Nintendo was able to boost game console sales by roughly 100,000 units when it was bundled into a kit with a game. By offering a mixture of kits and standalone products, Nintendo was able to dramatically increase both their hardware and game sales. This launch highlighted the success to drive adoption and purchasing power, and kicked off a strategy that gaming companies regularly employ to this day.
Cost Saving Benefits of Kitting
But wait, there’s more! Not only will kits drive greater sales and consumer experience (more on that in a future blog post), it can save you on operational expenses…and I won’t gate keep these benefits!
Reduced Inventory Storage Fees
When you store your inventory at a warehouse, the cost of that storage is a combination of the physical area that item takes up, the unique attributes or differences between or within products, the potential weight, and the time that item sits idle. This means lots of individual items can quickly add up and drag down your margins.
Pre-made kits can reduce this cost if used to consolidate low stock products into a single location reserved for the new kit, effectively creating density in storage. And since kits, if forecasted and advertised correctly, tend to sell quicker than standalone products, the additional costs of extended storage is less likely to impact your bottom line.
Reduced Order Fees
Every time a picker goes to pick an item, that cost is carried by your brand. If a consumer orders 5 items, depending on your pick flows, each item picked translates to a cost. However, when a picker selects a kit, no matter how many nestled items within that kit, your brand is charged only for one pick. Stord has seen upwards of 50% savings in the order fulfillment charge on a kit comprising 5 individual items.
Increased AOV
Let’s follow that 5 item kit a bit further down the line. That consumer comes to your marketplace looking for their favorite item and in this world they encounter a kit that has that item plus 4 other things they have been thinking about but never actually tried, at a price point that is likely more attractive than if they were to purchase all 5 items individually. The kit is a bit more expensive than the singular item but the curiosity of the new included items compared with the marginal increase in price feels like a value and worthwhile tradeoff. In this world, the kit has drastically improved your Average Order Volume (AOV).
In another world without that kit, the same consumer would come to your marketplace, buy the one product they wanted, ignore everything else and leave. Missed opportunities to increase your AOV, and revenue.
Operational Benefits
There are yet more unseen benefits to a solid kitting strategy. If you pre-make kits the time to prepare, label, and hand-off to carriers is substantially faster. These kits tend to be made with appropriate dunnage and shipping box in consideration, and therefore only lack the customer shipping label to be ready for delivery. Comparatively, if a customer orders the same items within the kit independently, each one can take a few minutes to be picked, then placed into the proper box, with the proper dunnage and finally given a label and sent to await the carrier. You often lose the surprise and delight of special packaging or product presentation that would otherwise wow your customers!
Pre-made kits tend to also circumvent many areas of potential error, as less touches directly correlate to less chances for things to go awry.
These make pre-made kits an excellent choice as part of your broader strategy to give your brand easy flexibility during unforeseen surges in demand. If you have a robust order management system, after your promotion or desired life span of the kit, the remaining kits can also be deconstructed and inventory returned back to stock to supplement regular order flow.
Should you not have pre-made kits but a high volume of repeatable order profiles, you can speed the kitting process up with the help of robotic automations. Several Stord customers leverage OSARO robots to assemble these kits with extreme accuracy and speed. There is more on the strategies you can use to assemble the kits in this blog post.
In Kit-clusion
(I promise that’s the last kit-pun for this blog post!)
By now you should have a strong handle on the ways you can tactically build kits, and the massive benefits a strong kitting strategy can provide your brand. In a future blog post, I will pack this kit up with an exclusive bow and explore how kits supercharge your consumer experience and aid in fostering and cementing consumer loyalty.
