Merchants depend on different product promotions to sell their items. One type of promotion consists of grouping products together to form a new assortment.
For example, a beauty products seller might group together shampoo, conditioner, body wash, and face soap all together for a special promotion. These new product groupings are referred to as kits or configurable products. Retailers use them as part of their sales strategy to increase sales.
However, managing kits or configurable products in your software system can be complex. This article will cover what merchants need to support these types of product groupings.
Simple Product vs Kits vs Configurable Products
There are different types of product groupings. It’s important to know the difference of each of these terms: simple product, kits, and configurable products.
A simple product is a single product. It consists of a just a single SKU. For example, a single basketball would be a simple product.
A kit is a grouping of products, like our example above. Retailers put together an assortment of single products and offer it as an “all inclusive” SKU. These kits have their own individual SKU, but are made up of a grouping of other SKUs that customers can purchase separately. Kits typically contain a static set of items that you can’t change.
Configurable products are also a grouping of products, like kits. However, configurable products allow the shopper to build a product from the ground up by choosing and swapping out a variety of SKUs. For example, think of a Dell computer. Customers can choose different features to build out their laptop purchase.
A configurable product usually has a base SKU with standard options. The shopper or inside sales person can upgrade, add, or remove items from the product per sale or per customer.
Why Retailers Use Kits and Configurable Products
Kits are an important promotional tool retailers use to drive greater revenue. They simplify product selection, while enticing customer to receive more value for a discounted price.
Configurable products, on the other hand, are nearly always required in “make to order” scenarios – like personal computers and industrial equipment. They also help simplify order entry for not only online shoppers, but also store employees and insides sales people.
Key Software Requirements to Support Kits and Configurable Products
Selling kits or configurable products is an important part of your business. Your systems, however, aren’t always able to support these products. Your software needs to meet these key requirements in order to support these types of product groupings:
Not all systems handle the sale of a kit the same way. Some may track the sale of the “all inclusive”, or parent SKU. This provides no way to track demand or inventory for each individual kit component.
Other systems may only track the sale of the components, making it difficult to track sales and the popularity of various kits.
Your system must be able to manage and track both the composite SKU and each individual SKUs of a kit.
Some systems only record the sale price of the kit and not each product’s. This makes it difficult to sync kit sales between two systems. This is especially true if one system requires the individual component item prices to be provided as the kit is sold.
Product Definition Standards
Many software products support configurable products and kits. However, few of those systems support multichannel integration. The method, attributing, and pricing algorithms used to define a kit or configurable product in one system may not be at all compatible with another system.
This requirement is where nearly all systems fail for kit management. Most systems that have the ability to define a kit or configurable product have no means to export that product definition for import or use in an external system.
What to Look for in a Software System
When looking for software, whether it be your ERP, POS, or eCommerce platform, to support your kits or configurable products, it should have these functionalities:
- Direct support for the creation of kit items
- Direct support for the creation of configurable products
- Dynamically manage inventory as kits are created, ordered, and sold
- Import/export kits or configurable product definitions
- Price based on configuration, customer, ship location variations
- Ability for kit/configurable SKUs placed on orders to be referenced via the API for integration
If you sell kit items, pay particular attention to how the system records kits on invoices when you sell a kit item. In the best case, the kit SKUs should reflect all component SKUs. This capability is especially important for configurable products where the individual SKUs can vary.
What to Do Next
If you plan on selling kits or configurable products, you’ll have to find the right software to support it. Check out our Multichannel Implementer’s Guide to better understand how well different eCommerce, POS, and ERP systems support these product groupings.