9 Easy ways to increase your shop’s Average Order Value
Online retailers are constantly on the hunt for strategies that not only boost profitability in the short term, but also help achieve long-term success. In this post, we’ll be looking at one metric in particular that can help increase growth: Average Order Value (AOV).
Average Order Value tells you the average amount spent by a customer during a transaction over a certain period of time, and is closely tied to your revenue and profits. By getting familiar with your AOV, you can assess your store's financial health and use that knowledge to make smart decisions that benefit your shop's growth.
In this post, we'll guide you through how to calculate your Average Order Value and then offer up 9 ideas for you to increase it. We’ll dive into strategies like spotlighting popular products, cross-selling, upselling, bundling products, and more.
How to calculate Average Order Value
If you want to know how much money on average your customers are spending each time they make a purchase from your shop, you need to calculate your average order value. The calculation is simple. All you need to do is take your total revenue and divide it by the total number of orders.
This number helps you understand the bigger picture of how your eCommerce store is performing. It goes hand-in-hand with other KPIs like conversion rate and customer lifetime value. These KPIs give you a good idea of your shop’s performance.
Once you know your Average Order Value, you should start working out ways to improve it. Below you’ll find 9 ideas to get you started.
How to increase Average Order Value
- Spotlight popular products
- Create free shipping thresholds
- Cross selling
- Upselling
- Bundle products
- Effortless searching and browsing
- Offer volume discounts
- Highlight customer savings
- Flexible return policy
1. Spotlight your popular products
One of the keys to increasing your AOV is by spotlighting your popular products. You can promote your top products by showcasing them on product pages, during the checkout flow or directly in your shop’s search.
An online clothing store could display their most popular items from that season at the bottom of product pages to entice customers to add items to their purchase. Shop owners can use the analytics feature of Motive Commerce Search to pinpoint the top-selling products that can help increase revenue.
Motive Commerce Search also displays your shop's popular products as soon as a shopper clicks on the search box. By featuring popular products that customers may have otherwise overlooked, you'll be able to craft an irresistible shopping experience.
2. Offer a free shipping threshold
Free shipping thresholds can be a game-changer for motivating customers to spend more, and it’s an especially useful strategy for businesses that might not be in a position to offer free shipping on all orders.
To set up your free shipping threshold, all you need to do is determine the price point at which you’re willing to offer free shipping and then display these minimum purchase requirements on your website. For instance, a popular electronics store might offer free shipping on orders over £100, encouraging customers to add a few more gadgets to their cart. Don't forget to establish different thresholds for domestic and international orders if you ship internationally.
It’s also useful to be transparent and keep shoppers informed as they add items to their cart with notifications that display the remaining amount needed for free shipping. For more about shipping strategies, click here.
3. Cross selling
Cross-selling is another common method for increasing order values. The approach involves recommending complementary products to customers before they check out. One tactic is to show suggestions throughout the checkout flow process using phrases like "Complete the Look" or "Customers Also Bought."
For example, an online bookstore might suggest a reading light or the next book in the series when a customer adds a book to their cart.
4. Upselling
Upselling encourages customers to upgrade to a more expensive version of a product with added features. To execute this strategy, you’ll need to have higher-value products available and propose them to customers at opportune moments. For instance, a music software might suggest upgrading to a pro version with extra sounds and digital instruments when a customer is about to purchase a basic version.
5. Bundle products together
Bundling products is a commonly used strategy to increase AOV that offers customers a combination of two or more products at a discounted price. This approach can make a deal appear more appealing and increase the perceived value of the purchase. For example, a skincare store might bundle a cleanser, toner, and moisturiser together at a lower price than it would cost if purchasing each item individually.
By offering bundles that cater to specific customer needs or preferences, you can encourage higher spending and introduce shoppers to additional products they might not have considered otherwise.
6. Effortless searching and browsing
Creating an effortless searching and browsing experience is essential for maintaining customer engagement and motivating shoppers to explore your site further. Motive Commerce Search lets you create a seamless shopping experience by delivering relevant search results as customers browse your store.
By providing optimised results and user-friendly navigation, you can make it easier for customers to find and purchase additional products, ultimately boosting your Average Order Value.
7. Offer discounts
Although discounting products may seem counterintuitive, it can be an effective method to motivate customers to spend more. The best way to pull this off is by implementing a mix of volume discounts, time-sensitive discounts, first-time customer discounts, and coupons to boost your Average Order Value.
For example, a fitness equipment store could offer a 15% discount on orders over £200, a limited-time 10%-off sale on all yoga mats, or a £10 coupon for first-time buyers. You can share discounts via your customer newsletter or by using the banners feature in Motive Commerce Search to prominently display these discounts and keep customers up to date on the savings they can make. Need some inspiration for your next banner? Click here.
8. Highlight customer savings
Highlighting customer savings can inspire shoppers to spend more by offering extra benefits as they reach specific spending thresholds. Display the potential savings customers can receive through promotions and discounts using eye-catching graphics or banners.
For instance, an online clothing store could display a banner that reads "Save £20 when you spend £100 or more!" By using Motive Commerce Search's banner feature, you can effectively communicate these promotions and make it clear how much customers can save by increasing their order value.
9. Flexible returns
A flexible return policy can alleviate customers' concerns about purchasing more items by providing a safety net for returns or exchanges. To establish trust and encourage higher spending, ensure your return policy is customer-friendly, offers a generous return window, minimal hassle, and clear guidelines.
For example, a shoe store might offer a 30-day return policy with free returns, letting customers confidently purchase shoes knowing they can exchange them if they don’t fit quite right. Display your returns policy prominently on your website, so customers know where they stand and what you offer.
Building for long term success
Online retailers striving for long-term success should continuously review key metrics such as Average Order Value to better understand their store's performance and make informed decisions that foster growth. By calculating your Average Order Value and implementing the nine strategies discussed, you can effectively increase your AOV and enhance your store's profitability.
Adopting these strategies, combined with leveraging tools like Motive Commerce Search, will empower you to create a seamless shopping experience that entices customers to spend more and ultimately boost your online retail success.