There are many reasons for the massive growth of new first-time gun owners that span political pressure, personal security, a younger and more diverse age group, higher percentage of new female shooters, and industry education. These new shooters may not know or understand the accessories or equipment required to shoot and maintain their new firearms. With most customers accustomed to retail kits or convenience packaging strategies, retailers must now consider both these options as essential merchandising, sales and marketing tools to reach these new shooters. Regardless of whether you refer to these as packages or kits, customers now expect options to address a wide variety of features in single-SKUed pricing and packaging.
Packages offer both the customer and retailer many advantages. Customers receive both convenience and a higher perceived value. For savvy retailers, kits also offer customers a cross-sell option to move either slow-moving inventory as part of the kit or package higher-margin products, all while simplifying the sales and purchasing process.
Recently, a retailer told me a story of how they sold out a half dozen .32 S&W revolvers in a week that previously had sat on the shelf for 30 months. The only change was marking them up $100, adding in three boxes of practice ammo, a box of defensive ammo, an hour of range time, and a ear-pro and eye-pro kit. Customers saw it as a unique, softer-shooting pistol option, and most importantly, saw a big value in the bundle.
For customers, the many advantages include simplifying the requirements of shopping individually for accessories, delivering a simplified purchasing experience with price and quality tiers, overcoming expertise and knowledge gaps on what to buy, and delivering perceived savings.
For retailers, there are multiple advantages that span reduced inventory requirements of individual SKUs, lower inventory costs, reduced display space, and a drastically reduced sales cycle. After all, it is far easier to ask if you want to add a cleaning kit than it is to pitch each individual component of oil, cleaner, cleaning rod, cleaning brush, etc., all separately.
Understanding Packages: Packages cater to the consumer’s desire for convenience but also tap into the psychology of bundled value. Though bundles of products come to mind first, kits could also include services as well. When most retailers think of a package, they only think about either pre-packaged vendor kits or in-store bundled rifles and scopes; however, those are very easy for price-sensitive customers to price shop.
Consider instead offering packages that go beyond just directly linked product such as a gun, magazine and holster. Expanded packages could include monthly gun cleaning, discounts on range time, and specific instruction on basic handling, shooting and even a CCW class. Packages can be included to combine a loyalty or rewards program where a customer could obtain a discount on future purchases or earn extra points for purchasing an eligible package. All these kits and packages become very difficult to price shop, they’re unique to your store, they expand the enjoyment of the shopper’s gun experience and draw customers back in for other future purchases.
The Psychology Behind Kits & Packages Perceived Value: Bundling products or services creates a perception of added value for customers. When items are grouped together, consumers often perceive the overall cost as lower than if they were to purchase each item separately. This perceived value encourages faster purchasing decisions, making kits and packages an effective sales strategy.
Convenience: Kits and packages streamline the shopping process by providing a one-stop solution. Consumers appreciate the convenience of having complementary products or services bundled together, saving them time and effort in selecting individual items. This convenience factor is especially attractive to inexperienced, busy or indecisive shoppers.
Busy shoppers will often perceive the convenience of purchasing a kit as a significant time savings vs. individually shopping for each component. A kit that includes several boxes of compatible Hornady Defense ammo, two hours of range time, an Otis cleaning kit and a Howard Leigh safety kit is an easy option for most retailers to put together which would otherwise require significant time and research for the customer to shop for.
Other convenience considerations are compatibility of the accessory with the firearms purchased. There is no fun in realizing a gun-cleaning kit or holster does not work with your gun.
Cross-Selling Opportunities: Retailers can strategically pair products that complement each other, leading to cross-selling opportunities. By offering a package deal, dealers can introduce customers to products they might not have considered on their own. This approach not only boosts sales but also enhances the overall shopping experience. Beyond the obvious ammo and gun packaging, consider other items, such as a bedside safe, or showcase a runner’s bundle that includes a Mission First Tactical belly band holster.
Forced Decisioning with High, Medium Low Price Points: When making buying decisions, psychologically the human brain likes to make decisions. When presented with multiple options, it will usually choose and self-justify one of the options. Unless budget is a challenge, survival psychology generally makes it difficult to overcome not buying one of the options when they seem like logical purchases. It is a well-tested and -documented sales technique of offering three packages and asking which option they would prefer: the Premium Package, Expanded Package, or Basic Package. According to statistics, most people will choose the middle option. The takeaway is to offer at least three tiers of packages for the best sales.
Bundling Considerations Overpricing Concerns: If not priced carefully, bundles may give the impression of a forced purchase without the perception of any real value. Generally, the highest converting packages usually offer customers a minimum of 10% to 20% off or offer the appearance of getting one item at a free or drastically reduced price. Nationally, retail packages and kits average at least a 20% off discount over the separately priced components. Retailers need to strike a balance between offering value and ensuring that the combined price remains reasonable. Generally, higher sales volumes offset any packaged average margin reduction.
Customization Preferences: Some customers prefer a personalized shopping experience, and rigid package offerings may not appeal to everyone. Retailers can address this by allowing customers to customize their bundles to some extent. Many times you will see this as loose-goods bundles. They are not technically a rigid or shrink-wrapped package; however, the individual components allow customers to swap similar-priced items or pay the difference.
Custom Shrink-Wrapped Packaging: With modern stretch wrap available to any retailer, you have the opportunity to physically package and unit-SKU the packages. Stretch or shrink wrapping provides some protection to pilfering/loss and offers the retailer a lot of flexibility with custom packages that are simple and easy to single-SKU.
The retail landscape is continually evolving, and embracing innovative strategies is crucial for staying competitive. Packages offer a compelling way for businesses to not only boost sales but also enhance the overall customer experience. By tapping into the psychology of bundled value and convenience, dealers can create a win-win situation for themselves and their customers in the ever-changing world of retail.
