Often, shoppers visit your store and only buy what they have in mind. However, as a business owner, you desire to earn more money from each transaction, right? If so, this article is what you’re looking for. We will show how you can generate more sales from each order while creating an enjoyable experience that keeps customers engaged with your store with tried-and-true hacks to maximize AOVs.
Before we start, let’s see what AOV is.
What is Average Order Value?
Average Order Value (AOV) refers to the average revenue a customer generates during each visit to an online retailer. It’s determined by keeping track of the total revenue divided by the total number of purchases. When AOV increases, it means customers are shopping more or buying products of greater value.
Source: Smile.io
For example, if your revenue is $100, and the total orders are 5, your AOV should be $20. Also, AOV doesn’t describe your gross profit or profit margins but presents insight into how they come to be. For instance, you’re selling three jackets priced at $15, $21, and $29 with an AOV of $19. Looking at this number, we can point out two patterns in consumer behavior:
– Your consumers are not buying multiple items.
– The low-priced jackets represent the majority of sales.
5 Strategies To Maximize AOVs For Your Stores
eCommerce businesses typically seek to maximize their AOV because it increases total revenue, but it’s pretty tricky.
Don’t worry! We’ve compiled a few practical strategies to leverage your business.
Cross-selling
Cross-selling is a prevalent but effective practice in the online retail industry. Basically, it’s to sell complementary products to fulfill the original item. In eCommerce, merchants frequently use this tactic on product pages throughout checkout or lifecycle campaigns. It is a highly effective strategy for creating repeat sales and showcasing the depth of a catalog to customers.
Product recommendations that cover important customer journey touchpoints lead to an intuitive and tailored experience.
For example, apart from displaying related things, Fanfreakz focuses on cross-selling their products by showing suitable items on the cart page to complete the appearance when visitors add a pair of blue jeans to their shopping basket.
Upselling
It’d be amiss if we mention cross-selling without upselling technique. Similar to the approach mentioned above, upselling is widely favored by e-merchants to increase AOVs. Thus, don’t forget to note it down. While the former aims to get shoppers to buy related products, the latter is about getting them to purchase a more expensive version of the currently viewed item.
Source: Farmacy
One of the easiest ways to entice your customers with an upsell is by offering a larger option. Bigger items give the impression of increased value and make it easier to justify the extra cost, as Farmacy has done. The cleansing balm product page offers four size options: trial, travel, regular, and jumbo. The interesting point here is that once you choose the jumbo size (200ml), you’ll see how much you can save, and the brand labels it as a limited edition.
Free Shipping Thresholds
People love free delivery. A recent study about which factor encourages customers to place an order the most when shopping online surprisingly indicated that free shipping topped the list with 76%.
Free shipping has always been favorable, so it's time to review your policy to keep them satisfied and maximize AOVs.
Review your cost and delivery fee, then set a minimum order amount for free shipping. Customers often add more items to their cart to reach the threshold, boosting their order value. To get them to remember it, you can learn from Kylie Cosmetics to set a head banner across the store reminding shoppers that they’ll get free delivery on orders over $40.
Loyalty Programs
Understanding the average value of all orders is beneficial, but it is not the only method for calculating an average. A store, for example, can divide buyers into several groups based on their purchasing history. In practice, many brands split their customer base into low, medium, and high spenders segments. Another way is to group them based on the frequency of orders, purchased product types, or any other technique that meets their demands.
For example, Sephorahas a program called Sephora Beauty Pass that all can sign up for free. Members will earn points for every dollar spent and use those points to redeem a reward and upgrade their membership to the higher tier to get exclusive perks.
Why do they need to do that?
Well, segmentation will allow store owners to target each group with a tailored method. High-spending consumers and repeat customers might be enrolled in a loyalty program that rewards them while low-spending customers can be targeted with incentives and cross-sells to increase their value.
Flash Sales
We often see occasional flash sales with limited-time discounts on selected products. The urgency can drive customers to add more items to their carts and purchase in seconds.
Amazon, the leading retailer, is a prime example. If you visit their site, you will see an Amazon Today’s Deals category featuring lightning deals and limited-time sales from all departments. Thanks to this feature, the brand quickly grows AOVs while keeping shoppers returning with repeat purchases.
Ready To Maximize AOVs?
We’ve walked through 5 tried-and-true strategies for any online business to boost order value: cross-selling, upselling, free delivery policy, loyalty program, and one-time deals.
However, don’t try all approaches at once to increase your AOVs! Instead, test each of them, remember to monitor the effectiveness of these strategies using analytics, and adjust your approach based on the results. Figure out what works effectively for you and keep optimizing it. The key is understanding what your customers value and how they interact with your products.
5 Strategies To Maximize AOVs For eCommerce Stores
Often, shoppers visit your store and only buy what they have in mind. However, as a business owner, you desire to earn more money from each transaction, right? If so, this article is what you’re looking for. We will show how you can generate more sales from each order while creating an enjoyable experience that keeps customers engaged with your store with tried-and-true hacks to maximize AOVs.
Before we start, let’s see what AOV is.
What is Average Order Value?
Average Order Value (AOV) refers to the average revenue a customer generates during each visit to an online retailer. It’s determined by keeping track of the total revenue divided by the total number of purchases. When AOV increases, it means customers are shopping more or buying products of greater value.
For example, if your revenue is $100, and the total orders are 5, your AOV should be $20. Also, AOV doesn’t describe your gross profit or profit margins but presents insight into how they come to be. For instance, you’re selling three jackets priced at $15, $21, and $29 with an AOV of $19. Looking at this number, we can point out two patterns in consumer behavior:
– Your consumers are not buying multiple items.
– The low-priced jackets represent the majority of sales.
5 Strategies To Maximize AOVs For Your Stores
eCommerce businesses typically seek to maximize their AOV because it increases total revenue, but it’s pretty tricky.
Don’t worry! We’ve compiled a few practical strategies to leverage your business.
Cross-selling
Cross-selling is a prevalent but effective practice in the online retail industry. Basically, it’s to sell complementary products to fulfill the original item. In eCommerce, merchants frequently use this tactic on product pages throughout checkout or lifecycle campaigns. It is a highly effective strategy for creating repeat sales and showcasing the depth of a catalog to customers.
For example, apart from displaying related things, Fanfreakz focuses on cross-selling their products by showing suitable items on the cart page to complete the appearance when visitors add a pair of blue jeans to their shopping basket.
Upselling
It’d be amiss if we mention cross-selling without upselling technique. Similar to the approach mentioned above, upselling is widely favored by e-merchants to increase AOVs. Thus, don’t forget to note it down. While the former aims to get shoppers to buy related products, the latter is about getting them to purchase a more expensive version of the currently viewed item.
One of the easiest ways to entice your customers with an upsell is by offering a larger option. Bigger items give the impression of increased value and make it easier to justify the extra cost, as Farmacy has done. The cleansing balm product page offers four size options: trial, travel, regular, and jumbo. The interesting point here is that once you choose the jumbo size (200ml), you’ll see how much you can save, and the brand labels it as a limited edition.
Free Shipping Thresholds
People love free delivery. A recent study about which factor encourages customers to place an order the most when shopping online surprisingly indicated that free shipping topped the list with 76%.
Review your cost and delivery fee, then set a minimum order amount for free shipping. Customers often add more items to their cart to reach the threshold, boosting their order value. To get them to remember it, you can learn from Kylie Cosmetics to set a head banner across the store reminding shoppers that they’ll get free delivery on orders over $40.
Loyalty Programs
Understanding the average value of all orders is beneficial, but it is not the only method for calculating an average. A store, for example, can divide buyers into several groups based on their purchasing history. In practice, many brands split their customer base into low, medium, and high spenders segments. Another way is to group them based on the frequency of orders, purchased product types, or any other technique that meets their demands.
For example, Sephora has a program called Sephora Beauty Pass that all can sign up for free. Members will earn points for every dollar spent and use those points to redeem a reward and upgrade their membership to the higher tier to get exclusive perks.
Why do they need to do that?
Well, segmentation will allow store owners to target each group with a tailored method. High-spending consumers and repeat customers might be enrolled in a loyalty program that rewards them while low-spending customers can be targeted with incentives and cross-sells to increase their value.
Flash Sales
We often see occasional flash sales with limited-time discounts on selected products. The urgency can drive customers to add more items to their carts and purchase in seconds.
Amazon, the leading retailer, is a prime example. If you visit their site, you will see an Amazon Today’s Deals category featuring lightning deals and limited-time sales from all departments. Thanks to this feature, the brand quickly grows AOVs while keeping shoppers returning with repeat purchases.
Ready To Maximize AOVs?
We’ve walked through 5 tried-and-true strategies for any online business to boost order value: cross-selling, upselling, free delivery policy, loyalty program, and one-time deals.
However, don’t try all approaches at once to increase your AOVs! Instead, test each of them, remember to monitor the effectiveness of these strategies using analytics, and adjust your approach based on the results. Figure out what works effectively for you and keep optimizing it. The key is understanding what your customers value and how they interact with your products.
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