How to Increase Customer Average Order Value In Your eCommerce Shop

Added 18.02.22
by SUKHBIR

When people shop online, they are more likely to search for a specific item and buy just that product than when browsing the aisles of a bricks-and-mortar store.

Therefore, eCommerce stores need to create incentives and motivate shoppers to browse their wares and make impulse purchases. You'll make more money on each transaction by increasing the average order value.

The average order value tactics that we'll discuss in this post will help you showcase your more exceptional products to clients, resulting in a higher number of sales per order.

 

What is

Average Order Value?

When consumers buy something from your store, the average amount they spend is called the "average order value" or "AOV."

The most straightforward formula for calculating your average order value is to divide your total income by the number of orders placed. However, it is necessary to remember that marketing expenses are not included in AOV.

The Benefits of Increasing Average Order Value.

  • An increase in revenue and profit can be achieved by increasing the average order value: More money per order equals greater total profit for your online store. An increase in average order value will allow you to put more money back into your company's growth and increase your profit margins.
  • Cost-effectiveness in marketing: After deducting product expenses and taxes, you haven't made much money if you spent $20 on marketing to win a sale with an average order value of only $50. But when your average order value rises, your marketing investment becomes more profitable. Hence, the necessity of a strategy based on increasing average order value.
  • Sell more products: A proper average order value plan can help you sell more of your merchandise, whether in a brick-and-mortar or online store. Increasing your AOV will allow you to sell more of your stock items.
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Tried & True Tactics For Increasing Average Order Value

Offer

Free Shipping

Free shipping is the simplest strategy to boost the average order value. For instance, all items over $75 receive free shipping.

Industry research has uncovered that a 30 per cent increase in your average order value is the most effective free shipping threshold.

So once you have calculated your current average order value, multiply it by 30 per cent. For the sake of simplicity, let's say your current AOV is $100; a 30% rise means you'd offer free delivery on all orders over $130.

A notification can also be added to the checkout page when a customer's order does not meet the free shipping criteria to encourage the shopper to add to their cart to meet the threshold.

 

Give

Product Discounts

It may appear paradoxical, but discounts can help you increase your average order value provided you include a minimum purchase amount with any discounts you give. For example, if you spend $75 or more in one transaction, you will automatically receive a $10 discount.

Using scaled volume discounts can also be appropriate incentives for some brands by offering a discount based on a specific order value range. For example, if you spend $75, you'll get $10 off; if you spend $100, you'll get $15 off; and if you spend $150 or more, you'll receive $25 off.

 

Offer

Bundled Deals

Average order value can be affected by offering clients bundle discounts. Offers such as "buy three, get one free" or "buy two products and receive a free gift" are good examples of this type of marketing.

You'll need to make sure that any freebies you give out don't hurt your product margins too much.

For example, a business selling make-up and beauty products, including a $2 mirror compact, would be an appropriate freebie.

When offering bundled deals, it is imperative that you price your products so that the costs of the 'free' item is factored in to ensure you still benefit financially from the bundle.

 

Give

A Gift Card

Even a small complimentary gift card can significantly raise the average order value.

For example, if your average retail price for products is $35 or greater, you could provide the customer with a $5 gift card to use on their subsequent purchase. Having received a gift card, the customer will be more inclined to make another purchase with your business.

To avoid losing money, make sure the price of your products is high enough so that a consumer will still pay for part of the cost and cannot utilise their gift card to get an item for free.

When introducing gift card incentives, be sure to clarify to your customers that gift cards cannot be used to pay for current purchases or shipment costs.

Offering gift cards also helps reduce future ad spending by encouraging customers to return for more purchases, and most recipients will pay far more than the card's face value the next time they shop.

If your business is prone to seasonal slowdowns, this can be a perfect time to reward clients with a discount, rather than making this offer available all year long.

 

Have

'First Time' Offers

If your online store is relatively new, most of your consumers will be first-time shoppers, and offering discounts for first-time customers might help boost sales.

For example, you can provide a one-time discount code for new customers who sign up to your mailing list or who buy multiples of a popular product or create exclusive 'introductory' bundle deals for people who have never bought with you before.

If a consumer buys multiple goods and is satisfied with their purchases, it will be easier to get them to return to your store because they have already created an account on your site and know what it's like to shop there, which improves your chance of keeping them as customers for the long term.

 

Showcase

Cross-sell & Up-sell Items at Checkout

A cross-sell is a product that a customer might appreciate but isn't related to the one they're looking at.

For example, displaying a tie and pocket square set that goes well with a particular colour suit can be a good recommendation for a buyer looking at suits. Customers are more inclined to buy the two as a set if they see them together.

Another great cross-selling option for online fashion stores is having a 'Get The Look' recommended products panel that includes all the products the model is wearing.

An up-sell is a technique for increasing the average order value or profit by persuading customers to purchase more expensive items or add-ons. For example, inviting the customer to add a matching wallet and key case to the purchase of a handbag or adding a screen protector for a mobile phone.

If you can curate appropriate, relevant and desirable products and tastefully display them to a customer as they proceed through your checkout, you increase the chances they will make an impulse purchase and improve the AOV.

 

Introduce

A Loyalty Program

Your average order value can be raised by implementing a customer loyalty programme. Every time a customer makes a purchase, they are rewarded for their loyalty with points or discounts.

Having a loyalty programme is advantageous since it aids in the development of brand evangelists. These clients return to your website time and again to buy your wares and spread awareness of your store to their networks. These brand ambassadors contribute to higher average order values.

Only 8% of customers return to a store on a regular basis; however, it is estimated that 40% of a store's revenue comes from returning consumers. Customers who trust your products and have confidence purchasing from your online store are more inclined than newcomers to make more purchases.

You may be able to build a larger customer base that will purchase higher amounts of your products if you reward customers who make repeat purchases.

In addition, loyalty programs are helpful for retargeting, social media, and email marketing which are less expensive ways of reaching out and promoting yourself to your customers.

 

Have

Limited Time Offers

You can boost average order value by offering time-sensitive deals. For example, you may, for instance, provide a free gift or a special discount to customers who purchase a certain number of products during a 48-hour period.

Even though urgency may not have a long-term effect on the average order value, it does help boost sales. During slow periods, time-sensitive deals might help increase average order value.

Limited time offers are also quite simple to carry out and can be leveraged to help promote new products via social media or putting up a banner on your website.

 

Show

Savings on Bulk Orders

Money-saving is a big deal. Customers may feel anxious about placing significant orders, so clearly displaying overall savings when buying in bulk can prevent customers from abandoning their carts or modifying their carts.

Customers can see how they can get a better deal if you show them how much money they can save by purchasing more goods to add to their cart. Showing savings can help raise the average order value.

 

Create

A Game Or A Contest

The food industry frequently uses games and contests to boost sales and encourage customers to order more often.

For example, many food manufacturers have followed Willy Wonka's lead and used the promise of opening their product's packaging to win a potential instant prize as a way to increase average order value.

When it comes to eCommerce, you can easily organise competitions where clients can win rewards if they buy frequently.

There is an almost infinite number of potential promotional contests, so there will be one better suited to your type of business.

For example, new subscribers can be entered into a draw for one of several prize packs when they join your mailing list, or a 'Wheel of Fortune' style widget can be added to your website at checkout for the customer to spin to win a prize.

 

Conclusion

Calculating the average order value can give you a sense of how well your store is currently doing.

The ideas in this post can help you boost the average order value of your online store; some will be better suited to your brand than others.

You may like to trial one AOV tactic at a time or combine a couple to boost sales.

If you are looking for professional help to increase the Average Order Value in your eCommerce shop and to put these ideas into action, contact Zeemo's eCommerce marketing experts today.

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