In retail, you’re always looking for ways to increase sales, retain customers, and improve the conversion rates of your product pages. Sadly, eCommerce companies often focus too much on driving new traffic and generating new buyers. In fact, they could increase their revenue more quickly by catering to existing customers.
If you run a mid or large-sized eCommerce store, increasing your Average Order Value (AOV) by just a few cents per order can profoundly impact your bottom line. By optimizing your AOV, you can generate reliable growth without increasing marketing budgets or making radical changes to your marketing or sales strategies. It also plays a large role in determining Customer Lifetime Value (CLV).
Before we dive into the strategies that you can use to increase the value of your average order, let’s start with its definition:
One of the big factors for AOV the average amount of money spent per transaction on your website. The formula is simple:
Total Revenue / Number of Orders = AOV
To increase the average value of each order, you’ll have to convince customers to add more items to their cart before checking out. There are a few strategies that you can use to reliably increase your average order size:
1. Recommend Similar Products
Customers can get tunnel-vision. They may come to your website so intent on buying the product they have in mind that they don’t take the time to shop around and see what else they might be interested in. Naturally, this leads to smaller order sizes.
To help resolve this issue, try displaying some recommended items on your product and checkout pages. Recommend products that would be complementary to a customer’s original purchase, or products you have reason to believe would interest them based on their previous buys.
Amazon serves as a great example of this tactic. Its product pages display a list of recommended items based on other customers’ shopping histories:
Enticing your customers with a handful of recommended items can be a great way to increase AOV organically while increasing customer satisfaction.
2. Make Adding Accessories to Carts Simple
In the same vein as the previous strategy, displaying accessories on your product pages can help increase the value of your average order. Try hand-picking products you think will complement their current purchase – it will help convince your users to spend more.
For instance, if you are selling an item that requires batteries (but doesn’t come with them), prompting your users to purchase some with the product can reliably increase the AOV on that product. If you were selling a camera, you might display camera lenses, batteries, or a photography guidebook. These are items that the customer is likely to want! Giving them an option to buy them with the main product can save them headaches down the road.
3. Install Free Shipping Thresholds
Sometimes, incentivizing customers to spend a few extra dollars can convince them to spend more. Installing free shipping thresholds is one of the most straightforward ways to incentivize larger purchases. For instance, many companies offer free shipping on orders above $50, $75, or $100.
Recent research from the University of Florida backs this up. It found that the AOV of a store with a $75 minimum threshold for free shipping saw order average order values of $64.68, compared to $46.04 for stores that offered free shipping to all customers.
4. Create Bundle Deals
To boost your AOV, you need to either raise your prices or convince customers to buy more items. Why not try bundling products together at a lower price than they would pay if they bought them individually?
You can offer these products as a bundle on their own product page. Alternatively, you could give customers the option of bundling items they choose for a specified discount amount. Let’s say you run an online cosmetics store. You could allow your customers to create their own makeup bundle, including items from multiple different categories to create a custom makeup kit.
Here is a great example of giving customers multiple options for bundling similar products together:
5. Add Live Chat To Your Website
There are few things more beneficial to your AOV than answering your customer’s questions quickly and easily. Installing live chat services on your eCommerce site can facilitate this…and nudge them toward making larger purchases. It also gives your agents the ability to make personalized recommendations and upsell products in real-time.
AOV…a No-Brainer for Revenue Growth
Working to increase your AOV is often easier and more reliable than trying to bring in new customers. Strategies like offering recommended products, bundling products, and adding free shipping minimum thresholds are great ways to organically increase the average value of the sales you already make in your eCommerce store.
Ready to improve your eCommerce performance?
Schedule a call with Crealytics. We’ve powered the growth of some of the largest and fastest-growing retailers, including Zalando, Farfetch, Revolve, and more.