Tips For Increasing eCommerce Average Order Value
The global eCommerce arena keeps expanding and learning to accommodate a vast number of new shoppers. In this landscape, ensuring a digital store’s profitability has also become increasingly challenging.
Plus, customers are now better informed and know exactly what they do and don’t want. This trend is also rapidly changing the eCommerce landscape. Overcoming your competition and retaining customer attention has become a whole new ball game.
In this post, we’ll be looking at the best ways to increase your average order value (AOV). You can calculate AOV by dividing your total revenue by the total number of orders in a given time period.
Increasing average order value will be a more effective way to increase overall revenues than generating more customers. So, let’s take a look at ten different tactics you can implement today.
Raise Your Free Shipping Threshold
If your store offers free shipping after a shopper has spent a certain amount, simply raising this threshold can increase your average order value. Customers like to get free shipping, and they would rather purchase one more item than pay for the delivery.
In order to ensure this raise works, ensure your customers know exactly how much more they need to spend to qualify for free shipping. A plugin can help you tackle this issue fairly easily.
For instance, check out the simple way Juvia’s Place lets shoppers know how much more they need to add to their cart. Simple, effective, and it works.
Offer Flexible Returns
Customers are often hesitant to purchase an item they are unsure about. They may like it, but what if they don’t? Will returning it cost an arm and a leg? Is the risk worth it?
By offering a flexible returns system that is both fair to the customer and that works for you, you will be reducing the risk associated with purchasing a new item. This applies to products that can later be resold — like electronics, for example. Cosmetics do not fall into this category.
Even Amazon offers free returns on some of its items. They provide just the right incentive to shoppers: if I don’t like it, I won’t have to pay for it or pay for returning it.
Raise Your Discount Threshold
Another great way to inspire customers to spend more is to offer a specific discount after they have spent a certain amount of money.
Just like the free shipping threshold, this tactic employs some clever customer psychology. Even though they’re actually spending more, customers enjoy the feeling of shopping at a discount.
You can also offer tiered discounts and higher savings for bigger spending. You can do this seasonally, on a specific range of items, or in order to promote the restock of certain products.
Customers also love freebies, so offering a free item after they have spent a certain amount can also get them to fill up their carts more than they had originally planned. Tiered freebies will work as well: the more you spend, the more free items you’re able to get.
Make sure the free item you’re giving away is worth your while, though. You don’t want it to eat up all of your added profits.
Jaclyn Hill Cosmetics is doing a promotion along these lines at the moment, where the purchase of a highlighter also gets you a free brush. This kind of offer is also great for getting rid of certain stock you have an overflow of, for instance.
Offer Product Bundles or Product Sets
Bundling together similar products or products that are often purchased together that you know will be of interest to your shoppers is another great way to increase average order value.
Bundles make customers feel like they’re getting a better deal and that they’re spending less money to get their hands on more items. You just need to do the math and ensure the bundle discount you are offering is worth it.
For example, if you have a $10 product, instead of discounting it to $7, you can bundle it with another $10 product and sell the bundle for $16. It’s a 20% discount, and it will ensure your customers are spending more.
Have Limited Time Offers
Limited time offers, especially seasonal offers or offers on a specific kind of product are also a great way to incentivize higher spending.
All you need to do is select your products carefully. You don’t want to base your offer around products that are of no interest to the majority of your shoppers.
You can offer more than discounts as well: free shipping, a freebie, a discount with their next purchase if they complete their order within a certain time frame.
Natasha Denona, for example, is running a Memorial Day sale. They are bundling items together and offering a significant discount. However, they failed to advertise the sale well enough on the website and only have one banner on the homepage. Making the sale more prominent would have ensured more shoppers get a chance to take advantage of it.
Display Cross-Sell and Upsell Offers
Cross-selling and upselling are great ways to work on increasing your average order value as well. That’s especially if the items you choose to recommend make perfect sense for your customers.
Cross-selling means pairing items from different categories that go well together and that your shopper is likely to be interested in. For example, if a customer is purchasing a pair of sneakers, a pair of socks would go nicely as a cross-sale.
An upsell, on the other hand, is a way to encourage shoppers to purchase a more expensive item in the same product category or to offer them additional items that go with their original purchase. For instance, if they are buying a pillow, some pillowcases might be a good way to upsell.
The trick here is to offer items your shoppers would really like. Randomly suggesting additional purchases will only ever come off as you trying to make more money. And that is definitely not the vibe you’re going for.
Studying your customers’ habits can be incredibly valuable here, and understanding which items they are interested in and why. There are no general rules or pearls of wisdom we can offer that will apply to every eCommerce store in the world. You need to do your own research and tweak your offers accordingly.
You will also need a plugin for WooCommerce, if that’s what you are using, that will display these offers on every product page. Shopify has plenty of apps you can use as well, so no matter what eCommerce platform you are using, there is a solution available.
Use Design Elements to Highlight the Value of Bulk Orders
In order to ensure your customers are aware of the value behind a certain offer, make sure you cleverly highlight it with the intelligent use of different design elements. Unless you draw their attention to it, visitors won’t know what the savings are. They won’t know the available discounts or that there are bulk orders available.
You can include an icon with a brief textual blurb next to the more expensive items that say “best value.” This will direct the customer’s gaze in the right direction and prompt them to explore further.
You can also offer deals where larger quantities mean better value. For instance, if 100 items cost $50 and 200 items cost $80, this needs to be clearly denoted on your product pages.
LFA Capsule Fillers offers a similar bulk discount on their empty capsules. They also offer quotes for bulk quantities, which is a great approach to B2B eCommerce.
Display How Much Customers Really Save
Shopping discounted items, understanding how much you’ve saved, and feeling like you are playing with “house money” is an incredible incentive to spend more. We all tend to go a bit overboard when there’s a sale at our favorite store. Maybe we don’t actually need all of those items, but we’d like to have them nevertheless. And the discount makes for a less guilty feeling.
When you clearly display how much money making a purchase has saved a customer, you are giving them a free hand. It feels more like saving than spending, and it’s likely to lead to a few more items added to their cart.
Mannequin Mall does this very well. On each of their product pages, they display clear retail vs. sale prices. They show you how much you are saving in both dollars and in percentages. This leaves you with the feeling you have more dollars to spend
Experiment with Increasing Prices
Finally, you can try increasing some of your prices. A significant increase likely won’t go down well, but raising your prices a dollar here and there can give you that added revenue boost.
Consider whether you would achieve your desired results by upping the price of some of your most popular items or some of your most pricey items. Take a look at your competition and what they are charging for the same or similar items. If your prices suddenly go up and there’s someone else offering the same item at a lower price and with better shipping rates, you know what will happen.
Once you have increased your prices, make sure to monitor your sales. Has the change resulted in dramatically fewer sales? Is your revenue increasing? Or, are perhaps more people purchasing these items?
As long as you keep track of the results the price increases yield, you can keep experimenting with different price points. The key is in knowing what happens when you make a change, as that will guide your future actions.
Before you start applying all of these tips, consider what your specific target audience would like to see and what would have the most impact on your existing customers’ habits. You don’t have to implement them all at once. But when you do, make sure you track what kinds of results the changes are yielding, and adjust your tactics accordingly.
Besides, we also have many eCommerce tips and tricks to develop your business. Let’s check it out if you want to get to know more!
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