Average Order Value (AOV) refers to the average amount of money your customers spend in a single purchasing transaction. It is an important Ecommerce Metric because it helps you to evaluate your overall efforts and pricing strategy. Improving the Ecommerce Average Order Value includes pricing, cross-selling, up-selling, offering discounts, social proofing, etc.
The main reason for improving your AOV is that the more money your customers spend per transaction, the more revenue your company will generate. AOV gives you insight into basically three areas: how much you spend to acquire new customers, your return on investment with your marketing efforts, and your overall profit margins of your business. Mostly, brands focus on getting customers to purchase beyond the threshold of the AOV, by offering free shipping over a certain amount spent, etc. While these kinds of deals can help you bring in revenue, they don’t always offer the best profits.
Free shipping is the most common way to increase Ecommerce Average Order Value and gain an edge over your competitors. It has been proved multiple times, free shipping is still the #1 concern for customers when it comes to checking out. And, high shipping cost is one of the major reasons for getting shopping cart abandonment. The bitter truth is that, while customers have gathered enough perseverance to move ahead to the checkout page, they can and will drop out the moment they think their order’s shipping cost is “unacceptable”.
For ecommerce businesses, free shipping always comes with a condition. For example, “Free shipping on all orders over $200” This is to incite your customers to purchase more so that their order will be qualified. It is also advised to display a notification when your customer’s orders almost add up to the free shipping threshold. Informing customers the exact amount of money they are missing to qualify for free shipping, is a powerful motivator for customers to add another product to their cart.
Statistics show that 84% of consumers claim to have specifically made a purchase because shipping was free, and 30% said they always increase the size of their orders if it qualifies them for free shipping & 77% have abandoned their carts due to unsatisfactory shipping options.
Providing discounts to the consumer is illogical for increasing AOV, as the intention is to make each purchase produce more revenue for your business. However, like free shipping, the discount coupons will not be offered without a certain condition.
Discounts come in two types:
- Percentage-based discount
The percentage-based discount ranges from small incentive percentages like 5% or 10% off, larger discounts to drive sales like 20% and 25%, or significant percentages like 50%+ to liquidate old merchandise.
- Dollar value discount
On the other hand, dollar value discounts act like credit. It gives customers a number that will make them feel that they are wasting money if they don’t take the offer. Discount is everyone’s favorite hurting game; you can use discounts to increase Ecommerce average order value in various scenarios and occasions. Holiday and seasonal deals, like Diwali, Black Friday, Christmas are the big ones. Rewarding your first-time shoppers is perfect to secure the purchase, like Clearly providing all new visitors with a 50% discount on the item he wants to buy or 15-20% on any electronic item purchase
Loyal customers have higher average order values. It is often seen that Subscribers of a loyalty program tend to spend more than the shoppers who are not enrolled in that program. Plus these dedicated customers share a lot of crucial data about themselves which makes it a perfect combination for a better understanding of your customer. This enables a brand to share exclusive discounts that will add value to their life — and encourage them to buy more. “By offering trusted customers free deals, you let your biggest fans jump the queue. A brand can keep current brand loyalists while motivating other customers to reach the same VIP customer status and helps them to trust their website for shopping again.”
Special promotions and exclusive events bring customers back to you and make them want to spend more and more. Customer loyalty isn’t just about taking points. It’s about truly delighting your customers and giving them the experience that makes them proud and excited to spend money on your brand. When brands make customers and their trust priority, they see a boost in their Average order value.
Adding personalisation to order in the form of gift wrapping or personal message is another simple way to increase your Ecommerce Average Order Value. Over the past few years, there has been a significant shift in customers’ shopping behavior. It is crucial that you are meeting your customer’s needs as an ecommerce business. Quite often users are buying for a friend, family, birthday, wedding or special occasion, so why not give them the option to select their purchase as a gift. Brands like Not On The High street, for example, specialize in these types of purchases and have dedicated pages for gifts and personalization.
Statistics show that eCommerce sales now account for 13.7% of retail sales worldwide.
The solid way to increase your AOV is to offer gift coupons to the customers. For example, People love discounts. you can offer a 5% or 10% off coupon to your customers which can be redeemed on their next purchase from your site if they shop for a certain amount. This is a very clever way to persuade customers to purchase more from your store. By creating a digital wallet, in which loyal customers can store their cash back rewards which they can use in a limited period. There are a lot of loyalty programs out there.
One of the quickest ways to increase your AOV is through up-selling or selling additional items to customers at the time of checkout. Some people get confused about the concept of up-sells and cross-sells.. Basically, up-sells are product “upgrades” while cross-sells are product “substitutes”. For instance, if you sell an iphone, a common up-sell could be a 12 months warranty, additional Mobile accessories, or a more powerful wireless charger. It costs you absolutely nothing to provide up-sells, and customers expect this anyway.
When customers are browsing a particular item or they are personalizing, or are checking out, it’s smart to recommend an additional item. If customers come to your website looking for a certain product, they may checkout before looking around at others. By showing product recommendations, you increase the chances the customer will spend more time on your page, add one of those extra items to their cart, and spend more money for buying something extra. Recommending a product by saying something like “customers who bought a jacket also bought a t-shirt along with it,” is definitely effective.
When customers are looking at one item, it’s reasonable to assume they might be interested in similar items or having multiple choice for buying extra products also. Do them, and yourself, a favor by showing them what else is available in your store.
It involves recommending the products that complement the stuff your customer is looking for. For example, Take Green Apple they cross-sell not one product but a complete look, because they know that consumers can be enticed to mix and match various items to construct a uniform look. There are some ways you can rank cross-sells to your audience:
“Complete Your Look ”
“Customers have Also Bought”
“You May Also Like this items”
“Products Similar To”
Cross-sells are most effective when they’re recommending relevant to what the customer was already shopping for, so try to make your cross-sell suggestions as targeted as you can so that customer is sure to buy.
The most difficult thing for any ecommerce store is to find new users. It is because people usually hesitate to buy from a new store. To eliminate this part of the deal first Time Offer can really be a profitable idea. In it, you must provide your first time customer with some special discount. Maybe 20% off or 2000 free reward points. These offers spread virally making it among the most profitable ideas to get more new customers.
Since the internet has blossomed, people have started looking for products online, before coming to the retail store to make a purchase. So, make sure your store has a website or an app which has all the available products listed before the customers. In fact, 71% of customers check online to find the best prices, to read customer reviews, and how the product looks. This will help them compare and make up their minds about purchasing the product. Your website or app should be clean and easy to access. This would give them a taste of what the actual in-store experience would be like.
You can also provide them the option of buying the product online by giving them certain perks and discounts. A great example in this category would be Myntra. They have an awesome website where people can check out their latest collections before visiting the store. They can get a second opinion on a product from another customer which will help them shape their buying decisions.
Myntra successfully achieved a 41% increase in their online sales last year.
Make it easier for shoppers to get what they want when they want it by offering:
Pay Over Time: It allows you to split payments, financing charges over time. This can be a great way of making it easier for your shoppers to buy now and pay later.
Payment Terms: For B2B businesses, it’s similarly possible to offer net terms. If you don’t have an current policy for this, you can explore different platforms on web for it.
Live Chat Feature:
Ecommerce sites with live chat sell 10-15% more per cart. Customers can get answers to quick questions, which helps them follow through with their purchases and avoid abandoned carts. Customers can get the confidence they need to proceed with their purchase, and live chat is particularly important for big-ticket items.
Customer Service Reach Outs:
Having sales or customer service repetitions reach out to your top shoppers to offer them more personal assistance and support.
When you know the purchase behavior and history of your shoppers then you can use that data to send them highly personalized offers and discounts so that they explore more things to buy and increase conversion. Not only this technique is powerful and clever for increasing your Ecommerce average order value, but it can also improve the user’s experience and make your store more trustworthy.
The best way to offer great deals and increase your Ecommerce average order value is the trust in your eCommerce store. You must make sure that your customer trusts you. Not just for purchasing from you, but also the after-sale service, that if anything goes wrong you will try to resolve the issue as soon as possible.
We have listed some of the smart ways to increase Ecommerce AOV which are easy to follow for any online store owner. Hopefully, our smart-list works for you. With these easy ways to increase your average order value, you will surely see some positive change in your store and your customers. Today every customer wishes to get the best deals, along with some added benefits of time-saving and convenience. In order to assure that your customer is satisfied, you must take feedback from them by personally sending texts to them. The ways mentioned above to increase your Ecommerce average order value are among the best to increase your sale and revenue.
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