7 Ways to Improve Average Order Value in E-commerce Store

Table of Contents  

In the dynamic and ever-evolving landscape of e-commerce, success is not just about driving traffic to your online store but also about optimizing the value of each transaction. One crucial metric that directly impacts your bottom line is the Average Order Value (AOV). A higher AOV means more revenue per customer and greater profitability.

In this blog post, we’ll explore seven effective strategies that can help you increase customers’ spending and enhance their overall shopping experience.

From clever merchandising tactics to personalized marketing approaches, these strategies empower your e-commerce brand to drive higher revenue and foster customer loyalty. 

Let’s delve into the world of strategic e-commerce management and discover how you can elevate your business to new heights by focusing on maximizing the value of each customer’s purchase.

TABLE OF CONTENT

  • Bundle Offer
  • Free Shipping Thresholds
  • Upselling
  • Cross-Selling
    • Pairing Products
    • Discount Deals
    • Complete the Set
    • Easy Add-Ons
  • Loyalty Programs
  • Website sorting (Sort Prices from High to Low)
  • Creating Contests
  • Conclusion

Bundle Offer

Create product bundles or packages that offer customers a discount for purchasing multiple items together. Encourage customers to buy more to take advantage of the bundled offer.

Create bundle offers to enhance AOV for your e-commerce brand

Example: E-commerce Store Selling Skincare Products

Here’s how you could structure these bundles:

Daily Skincare Essentials Bundle:

This bundle includes a facial cleanser, body wash, and moisturiser – essential products for a daily skincare routine. Individually, these products each cost Rs 350.  However, customers who buy them together as a bundle receive a 15% discount. The bundled price is Rs 893 instead of Rs 1050 if purchased separately.

By offering bundled packages like these, customers are encouraged to buy multiple items simultaneously, taking advantage of the discounted bundle pricing.

This strategy increases the average order value and provides customers with a cost-effective solution for their daily skincare needs.

Free Shipping Thresholds

Set a free shipping threshold slightly higher than your current AOV. Many customers are willing to add extra items to their cart to qualify for free shipping, which can result in higher average order values.

Set Free Shipping Threshold for an e-commerce business

Let’s delve into the “Free Shipping Threshold” strategy with an example of a skincare e-commerce brand.

Imagine that the current average order value (AOV) for the brand is 500. The brand implements a free shipping threshold strategy to encourage customers to spend more.

Current AOV: 500

Free Shipping Threshold Set: 750

By setting the free shipping threshold slightly higher than the current AOV, the brand encourages customers to add more items to their cart to qualify for free shipping. 

Here’s how it works:

If a customer adds a facial cleanser (250) and a moisturizer (300) to their cart, the total is 550, below the 750 threshold. The customer then sees that by adding a serum (200) to their cart, they not only meet the free shipping threshold but also save on shipping costs and vice-versa.

This strategy boosts the AOV and incentivises customers to explore and purchase additional products. It capitalizes on the psychology of consumers preferring to add more to their cart to avoid shipping charges, ultimately benefiting both the customer and the e-commerce brand.

Upselling

Upselling involves encouraging customers to choose a higher-priced option, upgrade their current selection, or add premium features or accessories. 

Upselling to increase AOV for your brand

Example

Suppose a customer is considering a moisturizer priced at 300. In the upselling scenario, the brand could present an upgraded version, such as an advanced anti-ageing moisturizer enriched with premium ingredients, priced at 500. 

The product page might include a message like, “Upgrade Your Skincare Ritual: Try Our Advanced Anti-Aging Moisturizer with Proven Benefits for Only 500.

How It Increases AOV:

Encouraging customers to opt for a higher-priced, premium moisturizer increases immediate revenue. It contributes to a higher average order value(AOV) by promoting the purchasing of more expensive items.

Cross-Selling

Certainly! Cross-selling is a sales strategy that encourages customers to purchase additional products or accessories that they already buy in an e-commerce store. 

Simply put, it is like suggesting things that go well with what a customer is already looking at or has in their cart. Now, here’s how this can make people spend more money in an online store:

Use cross-selling to increase AOV for your e-commerce store

Pairing Products:

Imagine you’re checking out a cool shirt in an online store. Cross-selling would be suggesting a matching pair of pants or stylish accessories to go with it.

Discount Deals:

Sometimes, you get a discount if you buy the shirt and the suggested pants together. This makes you feel like you’re getting a good deal, making you more likely to buy both.

Complete the Set:

It’s like saying, “Hey, you got the main thing, why not complete the set?” This encourages customers to add more items to their cart, increasing the overall order value.

Easy Add-Ons:

Showing related items while customers are shopping makes it easier for them to add extra things they might not have thought about. This simple step encourages them to spend more.

By effectively implementing cross-selling strategies, e-commerce businesses can increase the average order value and provide customers with a more comprehensive and satisfying shopping experience.

Loyalty Programs

Implementing a loyalty program in an e-commerce brand can significantly increase the Average Order Value (AOV) by encouraging repeat purchases and fostering customer loyalty. Here’s how loyalty programs can have a positive impact on AOV:

Loyalty Programs will increase the Average Order Value (AOV) by encouraging repeat purchases
  • Repeat Purchases: Loyalty points encourage customers to make repeat purchases to earn rewards.
  • Tiered Rewards: Tiers based on spending thresholds motivate customers to increase order values.
  • Exclusive Promotions: Loyalty members receive exclusive deals, prompting higher spending.
  • Points Multipliers: Special promotions offer extra points, encouraging larger purchases.
  • Freebies and Gifts: Qualifying for free items or gifts motivate customers to spend more.
  • Personalized Offers: Data-driven personalization prompts higher spending based on preferences.
  • Subscription Models: Recurring subscriptions encourage frequent purchases, contributing to higher AOV.

Website sorting (Sort Prices from High to Low)

Sorting products on an e-commerce website from higher to lower prices can positively impact Average Order Value (AOV). Here’s how:

Sorting products on an e-commerce website from higher to lower prices can increase AOV
  • Encourages Premium Purchases: Putting the expensive things at the top makes the whole product range seem more valuable. You start thinking the brand is all about good quality and luxury. Because of this, you might choose something more expensive, which makes the total order value higher.
  • Psychological Pricing Effects: Seeing the high-priced stuff first messes with your head a bit—in a good way! As you check out the range, you start thinking the mid-priced items are a good deal. This tricks you into buying more, boosting the average order value.

In summary, sorting products from higher to lower prices can strategically guide customer behaviour towards premium purchases, upselling opportunities, and bundled offers. This approach aligns with various psychological and marketing principles to enhance the overall AOV in an e-commerce setting.

Creating Contests

Creating contests like “Spin the Wheel” or quizzes can be effective strategies to increase a product’s Average Order Value (AOV). Here’s how these interactive activities contribute to higher spending:

Creating contests can be effective strategies to increase a product's Average Order Value (AOV)
  • Engagement Incentives: Contests like “Spin the Wheel” encourage customer interaction, keeping them engaged on your site.
  • Discounts and Offers: Participants often win discounts or exclusive offers, prompting them to make additional purchases to maximise the value.
  • Limited-Time Urgency: The time-bound nature of contests creates urgency, leading to impulsive decisions and increased spending.
  • Product Recommendations: PersonalisedPersonalised suggestions based on quiz results or preferences encourage customers to explore and buy more.
  • Return Visits: Periodic contests bring customers back to your site, offering multiple opportunities to showcase products and promotions.
  • Social Virality: Contests encourage participants to share on social media, expanding visibility and attracting more customers, potentially boosting AOV.

Conclusion

Remember to continually test and analyse these strategies’ impact on your AOV. Every e-commerce business is unique, so monitoring the results and adjusting your approach accordingly is essential. Additionally, focus on providing a seamless and user-friendly shopping experience to enhance customer satisfaction and encourage repeat business.

Explore more insightful articles on related topics: 

  1. https://bharatmavens.com/ads-free-growth-7-ways-to-boost-your-ecommerce-business/
  2. https://bharatmavens.com/storytelling-in-ad-creatives-why-what-how-to-use-it-to-win-it/

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