Increasing your store’s average order value is important for all stores and using the data crunched from 1,000+ Shopify stores, here are some top tips on increasing your Average Order Value.
Before we get to the tips though it’s important we start with the basics...
The formula to work out Average Order Value is a simple one: just divide your stores total revenue by the number of orders. This formula can be applied for any time range.
For example, if in January your online business generated $36,000 in revenue from 480 orders, your Average Order Value for that month is $75 ($36,000/480 = $75.)
IRP Commerce lists the AOV for the ecommerce industry as a whole in December 2020 as $104.65.
Here’s how Average Order Values break down by each ecommerce sector:
In a 2019 analysis of orders generated by email marketing, Klayivo quoted an AOV of $86.07, which was an average across all eCommerce industries.
Yotpo analyzed the AOV of 3,000 online fashion stores across 185 countries and reported a figure of $97.
But regardless of your current AOV, it can always be improved. That brings us nicely onto…
3 ways to increase your Average Order Value
Upselling is incentivizing visitors to buy a more expensive item than the one they’ve viewed, added to their cart, or already purchased.
For example, if you sell coffee and someone adds a 12 oz. bag to their basket for $15, you can show visitors an offer to ‘get 24 oz. for $24!’ Bingo, you’ve increased your AOV.
You can use upgraded or larger products for your upsells, or use bundling to increase the perceived value.
Use the All Products report in Segments to understand which of your products have the best sell through and then pair these with complimentary products of a higher value.
Cross-selling is showing visitors a related product to the one they’ve viewed, added to their cart, or already purchased.
Let’s say you sell hiking equipment and a visitor adds hiking boots to their cart. Chances are, they’ll also need thick, warm hiking socks. Showing these customers relevant product recommendations at the right time is a great way to increase Average Order Value.
Segments has a custom made report for Cross-Selling helpfully named “Cross Sell”. Use the Cross Sell report to understand what products users might consider buying based on what they’ve already bought. A cool feature of the Cross Sell report is that you can select 1 product (say your best selling product) to focus on and then see what users might be interested in purchasing.
A customer loyalty program is an incentive-based system, designed to get customers to continue to buy from you over a longer period of time than your average customer. In return, online stores may provide exclusive discounts, free gifts, priority access to new products, a behind-the-scenes view into their operations or many other rewards.
Loyalty or reward programs have a ton of benefits. Loyalty Lion found that customers who were part of a loyalty program spent 39% more per order than customers who weren’t. That’s massive!
Before you kick off your loyalty program, head over to the My Segments page and select your prebuilt loyal customer segment. You can use Segments to learn more about your most loyal customers, how much they’ve spent, their lifetime value and much more. The loyal customer segment is a treasure trove of useful information that is absolutely key to understand before launching your loyalty program.
Outline the rules of your program clearly and without resorting to lawyer-speak. Here are a few to get you started:
We hope you enjoyed reading this post and can start actioning points in your marketing efforts straight away. We’d recommend starting with Upselling and Cross-Selling as the easiest to activate through targeted campaigns on Google, Facebook and your email marketing platform.
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