5 Methods to Increase Average Order Value

E-commerce businesses are always looking for new ways to drive sales, increase customer retention, and optimize their website for conversions. But did you know that one of the best (and easiest) ways to grow your overall revenue is by increasing your average order value?

If you’re like most online retailers, you’ve taken the time to capture the attention of your customers and drive them to your website. While this is an important and necessary first step, maximizing their exposure to the right products at the right time once they’re on your website is essential in getting them to spend more once they’re there.

Increasing your average order value (AOV) is an extremely effective way to boost your e-commerce sales and keep your customers happy at the same time. For larger online stores, in particular, increasing your average order value (AOV) by just a few pennies can have a seriously positive financial impact on your business—especially if you continue to apply those practices incrementally over time.

Keep reading to learn five proven methods our experts have selected to get you on your way to bigger sales and better online experiences for your customers.

What is Average Order Value?

Before you discover some great ways to enhance your AOV, it’s important to understand what it is and why it matters.

Average order value (AOV) measures the average amount of money your customers spend per transaction at your e-Commerce store. This number is determined by dividing the total revenue by the total number of orders:

Total Sales Revenue / Number of Orders
= Average order value

So, if you had $15,000 in sales between 500 orders in May, your AOV would be $30. This means that on average, your customers spend $30 for each purchase from your store.

Keep in mind that AOV doesn’t consider the number of buyers, just the number of orders, so how many different people made purchases is irrelevant. What makes AOV important is that it lets you monitor how much your customers are spending on average. The higher the average order value, the more money for your business. Knowing your AOV also helps you understand your customer’s behaviors better, which in turn, will help you determine the best ways to increase their order values the next time they shop at your e-Commerce store.

Now that you know what AOV is, let’s reveal five proven methods that will increase your average order value online.

1. Add-On Offers

One of the easiest ways to increase average order value is to create add-on deals. This works especially well when a customer has already spent a certain amount and likely won’t mind spending a few dollars more for something offered before making their purchase.

Add-on offers are great to display on the checkout page, and don’t need a high price tag to significantly increase your AOV. In fact, lower price add-on items are better because more customers will likely add them to their cart. If your previous average order value was $30 and you had 500 sales, that’s $15,000. But if you can increase that average by just $3 to $33 an order, your sales will jump to $16,500. 

2. Relevant Products

Whether you’re suggesting an item based on your customer’s shopping behaviors or cross-selling items that relate to products already in the shopper’s cart, recommending products is a great tool to use to increase your average order value.

Product Recommendations

Try adding these to your product pages, and feature items that reflect eachconsumer’s shopping behaviors.  This can include popular products that are selling fast, or items other shoppers have purchased with whatever’s currently in the user’s cart. 

Cross-Selling

Think of cross-selling as a service, not a tactic. If your customer is buying a lamp, offer the right light bulbs. Not only does it appeal to your customers by seemingly “helping” them by recommending things they may need, but it lets them see the total cost of getting these items together, which can often be the final push to get them to add more items to their cart. 

This ends up being good for customers, as they often need the items you show, and good for your business because you’re increasing your AOV with each additional item. 

3. Free Shipping

Offering complimentary shipping is a great incentive to get shoppers to spend more each time they visit your site. Nobody likes spending a hefty shipping fee, so providing your customers with an opportunity to get their purchase delivered for free is a win-win for everyone. The key is to set a minimum spending amount that’s higher than your current average order value, plus any shipping costs you’ll incur. 

For example, if your AOV is $30 and shipping costs average at $10, offer to make shipping free on orders above $50. Many customers will do the math and realize it makes more sense to spend the extra $20 and avoid shipping than pay a third of their order total for shipping. And you’ll increase your AOV by a notable amount.

4. Bundled Deals

Chances are that your e-commerce store sells plenty of items that are related to each other. Creating product bundles—shampoo and conditioner, for example—and offering them for a slightly lower price that, if purchased separately, is often enough to motivate a shopper to buy both items instead of just the one they originally considered. 

Another option is to offer a discount for ordering two or more of the same product. This is especially beneficial for products with a lot of stock. Have a product that’s not selling easily on its own? Bundle it with popular items to offload inventory. Your customers will like they’re getting a good deal, and you’ll get to increase your AOV.

5. Gift Wrapping 

While most customers shop online for themselves, the convenience of E-commerce offers also makes it a popular choice for those in search of the perfect gift. Many of these orders are shipped directly to the gift recipient, and lack the personal touch of a nice gift bag or pretty wrapping paper. 

Offering gift wrapping is an incredibly easy and inexpensive service to add to your website that doesn’t require you to stock up on new products. From your customers’ point-of-view, they get the ease of having their gifts wrapped for a small fee, and you get to reap the benefits of a higher order value. 

Bottom Line

There are lots of things you can do to increase average order value, but the strategies that work for you will depend on what you sell. The key is to test out strategies to determine what works best. This may take a few rounds, but once you find the right method that works for you, you’ll be able to increase your e-commerce revenue without having to search for new customers.

No matter what you do, always make sure you’re providing a seamless, intuitive customer experience that makes your customers feel comfortable and happy when they visit your site. When shoppers feel helped by an e-commerce site, they tend to buy more. Any suggestions for additional purchases need to be genuinely helpful and focus on what the shopper wants rather than what you want them to buy. This will help you maintain customer loyalty and sell more, ultimately helping you increase your average order value.

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During your consultation, our team will work with you to understand your current e-commerce strategies and provide you with customized recommendations that can help you increase your average order value or conversion rate, while keeping your customers satisfied.