How to Grow Average Order Value in Ecommerce?

How-to-Grow-Average-Order-Value-in-Ecommerce

Once you have the traffic, it’s time to start looking at ways to grow your average order value or AOV. Doing so will increase your revenue per visitor and lead to better ROI on your marketing efforts down the road. Average order value (AOV) in Ecommerce represents the average amount customers spend when they purchase your business. 

If you have an ecommerce site, you want your AOV to be as high as possible because every dollar of AOV means more revenue for your business. Since your goal is to increase AOV, it stands to reason that you’ll want to explore ways to improve the average amount customers spend on each order. 

Here are different proven strategies you can use to grow ecommerce average order value calculation and boost your bottom line.

What is the Average Order Value?

Average order value (AOV) is a key metric used in the analysis and optimization of ecommerce businesses. It is calculated as the average amount a customer spends on an item during a given period, usually a month or quarter. It helps to determine how profitable a business is and how much room there is for growth.

There are several ways to increase AOV, including increasing the quantity or quality of products offered, improving customer service, and attracting new customers. Below are some tips to help to grow average order value in ecommerce:

1. Improve the Quality of Your Products: One way to increase AOV is by improving the quality of your products. It can be done by increasing the quantity or quality of your products, adding new features to your products, or improving the customer experience.

2. Increase Quantity or Offer More Discounts: Another way to increase AOV is by increasing the quantity or offering more discounts. It can be done by increasing production levels, adding new items to your inventory, or offering discounts on specific items.

3. Improve Customer Service: Another way to increase AOV is by improving customer service. AOV can be done by providing faster shipping times, resolving customer complaints, and sending product samples to satisfied customers.

Why is AOV Important to Ecommerce?

Average order value (AOV) is an essential metric for successful ecommerce business because it is a crucial indicator of how well a company is doing. When a customer spends more than $50 on an order, having a high AOV can lead to increased sales and higher profits. There are best ecommerce platforms for small businesses. Here are some reasons why AOV is so essential:

1. It Shows How Well the Site is Doing: One of the first things shoppers look at when shopping online is the AOV for the specific product or category they’re interested in. If the AOV for a given product isn’t high, it may show that the site isn’t carrying that product well or that other better options are available. It could lead to lost sales and lower profits.

2. It can Lead to More Repeat Customers: High AOVs also result in more repeat customers, meaning that customers who are happy with their previous purchases are more likely to come back and make additional purchases on the site. It can have a positive impact on revenue and profitability.

3. It can Result in Higher Rankings: A high AOV can also help a site rank higher on search engines, enabling it to grow and gain more traffic. It is a crucial metric for many e-commerce sites, particularly those that sell online, as the higher rankings can help increase sales and conversions.

4. It can Reduce Customer Churn: A high AOV can also reduce customer churn. Customers unhappy with their purchases are less likely to leave the company and move on to other purchase options.

How to Calculate Average Order Value

Average order value (AOV) is a calculation used in ecommerce to determine the average price of products sold during a given period. The analysis considers the total dollar value of all orders placed during the period and the percentage of orders more significant than a set minimum order value. 

Purpose of AOV is twofold

First, it can help retailers optimize their product mix and pricing to increase sales volume. Second, it can help them better understand which products are selling well and which ones could use some additional promotion or marketing effort. 

To calculate AOV, determine the total dollar value of all orders placed during the period. This number can be found by multiplying the number of orders (by customer type and product category) by the average sale price per order. Then, divide this figure by the total number of days in the period. 

Next, determine the percentage of orders more significant than a minimum order value. This percentage can be found by dividing the total dollar value of all orders placed during the period by the total number of orders (by customer type and product category). This figure will give you an idea of how many large orders are worth investigating further. If the percentage is greater than 70% of all orders, then you can take more time to research each order.

Ways to Grow Average Order Value in Ecommerce

Average order value is a key metric for ecommerce businesses, as it can indicate how profitable a company is. Here are some ways to grow the Average order value of ecommerce businesses:

Create a Free Shipping Threshold

Free shipping thresholds are essential to growing your average order value (AOV) in ecommerce. Shipping is one of the most expensive components of any online purchase. It often ends up being the most significant deciding factor in whether or not a customer makes a purchase. 

By setting a free shipping threshold, you can ensure that at least a certain percentage of your total sales are automatically shipped for free. It helps to reduce the overall cost of your shipping policy and increases the chance that customers will make purchases from you. 

Keep a few things in mind when setting your free shipping threshold. 

  • First, make sure that the threshold is high enough to incentivize customers to make purchases but low enough so that it doesn’t become a burden on your business. 
  • Second, be sure to specify which items qualify for free shipping. It will help you ensure that you’re giving out the benefit to the right customers and reducing overall costs associated with shipping. 
  • Finally, update your free shipping threshold regularly to reflect changes in your marketplace and customer behavior. By doing this, you’ll be able to keep your AOV high and continue growing your business.

Deliver “Fast and Free” for Orders That Meet a Minimum Spend Amount

One of the best ways to grow average order value (AOV) in ecommerce is to deliver fast, free orders that meet a minimum spend amount. It will incentivize customers to make more frequent and larger purchases, leading to increased sales and improved business profitability. 

Here are four ways to deliver fast and free for orders that meet a minimum spend amount: 

  • Allow free returns within a specific period after placing an order. It will allow customers to test out products before making a purchase and encourage them to make larger purchases to receive free returns.
  • Offer free trial periods for products sold through ecommerce platforms. It will allow customers to try out products before they purchase and let them see how the product works before they commit to purchasing it.
  • Provide discounts on products that are sold through ecommerce platforms. It will incentivize customers to make larger purchases and provide businesses with an additional source of revenue.
  • Install automatic payment processing features on ecommerce platforms so that customers can quickly pay for their purchases without having to go through any additional steps.

Use Appealing Design for Your Product Pages

To grow the average order value in your ecommerce business, it’s essential to create appealing product pages. It means using high-quality images, explanatory text, and a layout that is easy to navigate. Here are some tips for creating compelling product pages:

1. Use High-quality Images: Images help shoppers understand what they’re looking at and make it easier for them to find the products they’re interested in. Make sure each product has at least one full-length image, and use images that represent your product well.

2. Explain your Product Features Clearly: Include clear, concise descriptions of the product’s features and benefits. It will help shoppers understand what they’re buying and make a decision on whether or not to buy it.

3. Use a Layout that is Easy to Navigate: Make sure your product pages are easy to browse and understand. Try using tabbed navigation or a grid layout that makes it easy to see all the products simultaneously.

By following these tips, you can create effective product pages that will help increase average order value in your ecommerce business.

Highlight Trending Products

The average order value in ecommerce continues to grow, and there are a few ways to help your business take advantage of this trend. Understanding how to market your products to specific demographics and using price analysis tools can increase sales and drive traffic to your store. 

One way to increase average order value is by focusing on trending products. By understanding what customers are looking for and developing products that meet those needs, you can ensure that your sales continue to grow. Additionally, by placing relevant products to your target demographic at the top of your search results, you can draw more customers into your store. 

Pre & Post-purchase Upsells & Cross-Sells

Both upselling and cross-selling are tried-and-true behavioral marketing techniques that have been proven to increase the total amount spent on an order (AOV).

Upselling is a strategy employed by e-commerce companies to encourage customers to purchase a more expensive version of a product that they have already added to their shopping cart. In general, an online retail company has two options to choose from:

  • Include an upsell as part of the pre-purchase process. That is, suggest the upsell to customers before they add the product to their shopping cart.
  • You should make an offer after the purchase. Many companies use post-purchase emails to accomplish this goal. However, these emails typically have low conversion rates. On the other hand, there is a more effective way to approach this.

It is more likely that a customer will take advantage of an offer if it is presented to them after they have completed the checkout process and before they are taken to a thank-you page. You can reduce the likelihood of customers abandoning their shopping carts by utilizing this strategy while continuing to reap the benefits of many of the opportunities that upsells present.

You can optimize your online store even further by developing a purchasing process that only requires one click on the mouse.Customers have a higher propensity to take advantage of the offer when they can do so with the minimum effort required, which is just one click, and when they are not required to re-enter their payment or shipping information.

In contrast, cross-selling encourages customers to shop for products that are related to or complement each other. You can provide your customers with a pre-and-post-purchase cross-sell option, which is analogous to an upsell and works similarly. For example, if a customer adds a vitamin C serum to their shopping cart, you should always suggest that they purchase an eye cream to go along with it.

Amazon is one of the businesses that make the most extensive use of upselling and cross-sell strategies. When you have finished adding items to your cart, Amazon will display a carousel of additional products related to the ones you just added or that pair well together.

Offer Social Proof

To grow average order value (AOV) in ecommerce, merchants must offer social proof. It means proving that other customers have placed orders and are satisfied with the product or service. Social proof can come from customer reviews, ratings, and other online indicators of success.

Merchants can use a variety of techniques to offer social proof. 

  • One approach is to display products that have received positive reviews or ratings. 
  • Another strategy is to feature products that are popular among other customers. 
  • Finally, merchants can promote customer loyalty programs that offer rewards for repeat purchases.

Using various strategies, merchants can increase the likelihood that their customers will place orders and be satisfied with the product or service.

Provide Bundle Deals and Bulk Options

There are a few ways to grow average order value in ecommerce through bundle deals, bulk options, and exclusive offers.

  • Bundle Deals: Bundle deals can significantly increase average order value because they draw in more customers with the bonus of saving on shipping costs. When creating a bundle deal, be sure to list all the items included and ensure that the price is discounted enough to make it worth buying all the things together. 
  • Bulk Options: Another way to increase average order value is by providing bulk options. Customers can buy large quantities of an item at a discounted price, leading to higher average order values. 
  • Exclusive Offers: An exclusive offer is a great way to snag customers looking for something specific. You can encourage more customers to shop with you by offering an exclusive offer, leading to increased average order values.

Each of these strategies has its own benefits and drawbacks, so be sure to weigh before implementing them in your ecommerce business.

Ways-Grow-Average-Order-Value-in-Ecommerce

Compensate Customer Loyalty

There are several ways to grow average order value in ecommerce. One way is to compensate your customers for their loyalty. Doing this will encourage them to continue shopping with you and make your brand more popular amongst your customers. Here are three ways to do this: 

1. Give Away Free Gifts With Every Purchase

It is a great way to show appreciation for your customer’s loyalty. You can offer gifts like vouchers or discounts on future purchases to say thank you. It will make the customer feel appreciated and like they are always getting something valuable for their business.

2. Offer Customer Rewards Programs

Another way to show your appreciation for your loyal customers is by offering customer rewards programs. These programs give your customers incentives like gift cards or points that can be used towards future purchases. It can perk up customers’ day and encourage them to keep shopping with you.

3. Send Customer Emails Regularly

One of the best ways to keep customers loyal is by sending them regular emails thanking them for their business. It will make them feel appreciated and like they are part of the team at your store. It will also encourage them to revisit your store in the future.

4. Include Customer Review Features

It’s essential for your customers to feel appreciated and heard, so include customer review features on your website. It will let them know their voices are being listened to and the company values their opinions.

Let Customers Trial Higher Service Tiers

Have you ever wondered how to increase the average order value in ecommerce? One way to do this is to offer higher service tiers. It means providing more features and benefits at a higher price than the standard product.

When customers have the option to try before they buy, they’re more likely to make a purchase. And since higher service tiers typically offer more features, your customers will be more satisfied with their decision. Plus, these tiers encourage customers to return and recommend your product or service to their friends and family.

Offering multiple service levels also allows you to target different customer segments. For example, you might provide an essential service tier for customers who just want the basics and a premium service tier with additional features and benefits. Alternatively, you could offer two different service levels for other price points. This way, you can attract budget-conscious customers and luxury-seekers alike.

Whatever approach you choose, remember that ensuring your service tiers are easy to use and navigate is essential. If your tiers are too complex or challenging to use, customers will likely abandon them altogether. In addition, it’s necessary to provide timely support for your service tiers. If you don’t respond to customer service requests within a short time, most customers will abandon your product altogether.

Some businesses offer only one tier, while others offer two or more different service levels. You might want to include a basic level in case your business needs to attract new customers or if you want the option of selling your premium service options at a higher price point than the basic version. 

In addition, many companies provide complimentary support for their essential services but charge for added features and support when customers upgrade to the next level. This approach is an excellent way to offer increased value from day one without requiring additional work from you (or your customers). 

Discounted Price

One way to grow average order value in ecommerce is to bundle products at a discounted price. It can be done in various ways, such as bundling multiple products or offering a discount on the total purchase when multiple items are purchased. By bundling products, customers can save money and get more items in return. 

Additionally, by offering discounts on the total purchase, customers who buy multiple items may be able to save even more money. All of these strategies can help to increase average order value and increase sales.

Market to a “Heavy User” Audience

There are a few ways to grow average order value in ecommerce, by targeting a heavy user audience. By understanding what motivates them and tailoring your product and pricing to meet their needs, you can increase the average order value for your customers. 

One way to target heavy users is to identify what they want and need that you don’t offer. For example, if you sell furniture, identifying heavy users could be people who buy furniture for their home office. It could include companies that buy furniture for their interior design firms or businesses that provide office space to their employees. 

Another way to target heavy users is to focus on niches within your industry. For example, if you sell clothes, identifying heavy users could be fashion bloggers or people who regularly shop at specialty stores. It could include businesses that make and sell clothing or provide fashion advice to clients. 

By focusing on heavy users, you can increase the average order value for your customers and create a loyal following of customers who are likely to recommend your products and services to others.

Establish a Customer-First, Flexible Return Policy

When it comes to customer service, ecommerce businesses need to focus on establishing a customer-first policy. It means that customers are always the top priority and that businesses take the time to understand their needs. Additionally, businesses should have a flexible return policy to accommodate dissatisfied customers. Businesses can maintain high customer satisfaction ratings and grow average order value (AOV).

By setting up a customer-first policy and having a flexible return policy, businesses can ensure that their customers are happy and satisfied. It will help them keep more of their money and increase average order value (AOV). When businesses focus on their customers first and make it easy for them to return items if they are not happy, they will be able to increase sales and grow their business overall.

Give Out Gift Cards & Coupons

Giving out gift cards as a way to grow average order value in ecommerce is a popular approach. Here are four tips for using gift cards to increase sales: 

1. Give out gift cards at critical times during the shopping process. It can be an immediate discount or free shipping when the purchase is made with a gift card. 

2. Make it easy for your customers to use their gift cards. Include instructions on how to redeem them, and make sure the process is quick and easy. 

3. Offer loyalty rewards programs that include gift card benefits. It can motivate customers to use their gift cards more often and increase sales overall. 

4. Use your funds or partner with other businesses offering gift cards to raise money or support charities. It will help you reach new customers who may not have heard of you before and generate goodwill among your current customer base.

Create a Contest 

If you want to grow the average order value in your ecommerce business, one great way to do so is by sponsoring a contest. By enticing customers to enter, you’ll increase sales and boost your brand’s perception as a fun, exciting place to shop. Plus, who doesn’t love a good prize? Here are three tips for creating a successful contest:

1. Choose a Famous Prize: If your goal is to increase sales, make sure your prize is something your customers want. Offering something unique and exciting will draw in more participants than giving away something standard, like a T-shirt or keychain.

2. Make it Easy to Enter: If you’re planning on hosting a contest with multiple rounds of voting, make sure your entry process is easy and user-friendly. Include clear instructions on how to enter and list all the prizes available in each round, so customers know what they need to do to qualify for each one.

3. Keep it Fresh: Each year there are new contests to enter and old ones that come back into style. Keep your contest interesting by rotating the prizes or adding new ones periodically. 

Down-Sell Add-Ons

Adding an add-on to your product can increase your average order value. One way to increase average order value is to offer a down-sell option for customers who purchase more than one product. It will allow you to generate additional revenue from those customers and help you retain them as customers. Additionally, down-selling can help you differentiate your product from others on the market. 

Offering a discount for those who purchase multiple products can be another way to grow average order value. It will entice buyers to invest in a more significant purchase and help you boost sales overall. In addition, discounts can also attract new buyers who may not have considered purchasing multiple products before. Discounts can be offered in various ways, such as through coupon codes or by offering free shipping on orders that include various products. 

Offering these down-sell options and other promotion opportunities can help your product stand out from the competition and generate increased revenue.

Show Savings with Bulk Orders

One of the easiest ways to grow average order value in ecommerce is by increasing your bulk orders. You will likely see discounts and reduced shipping costs by ordering larger quantities. Plus, you can ensure you get the best deal possible on quality products. 

When you place large orders with your favorite retailers, you may be able to save a bundle on your purchase. While placing multiple orders may seem like a hassle, the savings can be significant. 

To get started, take a look at these tips for bulk order success:

1. Do your Research: Before placing orders, do your research to see what deals are available. You may be surprised at just how much you can save by ordering in bulk.

2. Shop around: Don’t be afraid to compare prices between different retailers. By comparing prices, you’ll be able to find the best deal on the product you’re looking for.

3. Request Discounts: Many retailers offer discounts for large orders. Ask your retailer if they offer any discounts for large orders and see if they are willing to cooperate.

4. Consider Shipping Methods and Costs: Shipping can be expensive, so choosing the correct shipping method and calculating the shipping cost before placing your order is essential.

Average-order-value-AOV

The Impact of Branded Packaging on AOV

There is no denying the fact that branding can have a significant impact on an ecommerce business’ average order value (AOV). For businesses that offer a wide range of products, it can be especially important to ensure that each product is packaged in a way that makes it easy for customers to identify and purchase.

One study found that AOV was significantly higher for products packaged in branded containers than those packaged in generic or unbranded containers. The study showed that AOV was almost double for products packaged in branded containers.

While there are a variety of reasons why branded packaging can boost an AOV, one of the most important reasons is that customers are more likely to recognize and appreciate a product’s branding when they see it displayed prominently on the product itself. Businesses that package their products using branded packaging will likely attract more customers looking for their products.

Overall, using branded packaging can significantly impact an ecommerce business’ bottom line. If you’re considering whether or not to implement branding into your product packaging, evaluate its impact on your AOV.

Conclusion

Businesses use a lot of different tactics to increase their conversion rates and bring in more revenue, but if you are trying to get the most out of your customers and need a quick win, then this blog post will provide different ways that you can start using right away. The average order value is the most critical metric for growing your ecommerce business. By understanding how to grow average order value, you can increase your bottom line and reach new heights in your online store. There are several ways to achieve this, so find one or more that work best for you and your business.

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