Beautiful Ideas for Business

How to increase your Average Order Value (AOV)

By / On Nov 16 2018

Average order value (AOV) is an important ecommerce metric that often gets overlooked.

Increasing your AOV by even a few dollars could transform your profit margins. Imagine what a $50 or $100 AOV increase could do for your ecommerce business.

What is AOV?

As the name suggests, your average order value is the average worth of each order on your ecommerce site.

Your ecommerce platform will share this information with you, and you can look at average values over time, during different seasons, or even on certain days of the week.

Since you’ve already done the difficult work of bringing a customer in and moving them to the sales page, improving your AOV is relatively easy. Your customers already trust you enough to buy – you just need to find ways to encourage them to spend a little more.

Here are five proven strategies for increasing AOV.

1. Create a free shipping threshold

One of the most common methods for increasing AOV is offering a free shipping threshold – after all, ‘unexpected shipping costs’ are the number one reason people walk away from a shopping cart.

For example, if a customer purchases $100 worth of products, they are eligible for free standard shipping. A prompt on the checkout page is a good way to remind a buyer of how close they are to this perk, such as ‘you only need to spend $16.50 more to qualify for free shipping!’. When an extra item is only a little more than the cost of paying for postage, it’s a difficult offer to turn down for many customers.

To ensure you get the most value out of the sale and balance your shipping costs, calculate your current average order value and add roughly 30 per cent. For example, if shoppers usually spend around $50, offer free shipping for orders of $65 and above.

2. Add an ‘Other items you might like…’ section

Also known as the cross-sell, ‘Other items you might like…’ gives the customer some friendly suggestions for products that go particularly well with the item(s) already in their cart.

For example, perhaps you’re a men’s clothing retailer, and your customer is currently buying a dress shirt. Other items your customer might like include a tie, a pair of cufflinks, and a pair of dress shoes. Or, they might like the same style of shirt in a different print.

These products should be strategically picked, rather than just random items. You want to offer your customer options that genuinely work well with things they are currently purchasing.  

3. Offer bundle deals

A bundle deal is when you group similar items for a small discount.

For example, you might run a ‘Three for $30’ deal on $12 coffee mugs. Alternatively, you might offer a freebie when your customer purchases a certain number of products or run a ‘Buy Three, Get the Fourth Free’ promotion.

You’ll need to do the maths to ensure you’re still making a profit from the sale even after the incentive has been deducted.

4. Add a ‘recently viewed’ widget

When a customer browses your site, it’s unlikely they’ll find the exact product they want straight away. Instead, they tend to roam around looking at various products before making a decision.

With a ‘recently viewed’ widget, a collection of items they have already looked at will appear on screen as a not-so-subtle reminder of all the other awesome products that they can return to and potentially add to their bag.

5. Give discounts for certain spends

Perhaps one of the most straightforward AOV strategies is to offer a discount when a customer spends a certain amount.

It could be a five per cent discount code for purchases of over $60 or a ten per cent discount code for purchases of over $100. This offer can be just enough to encourage your customer to add that final item to their cart.

Another option is to offer a discount voucher for the customer’s next purchase, which can encourage them to spend more this time, and also make a return visit to use their voucher.

Of course, there’s no reason why you can’t employ several strategies to increase your average order value at the same time. Which of these ideas will you try first?

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