Jun 29, 2020

How to Increase the Average Order Value on Your Online Store

If you have an e-commerce business and want to grow revenue, you have 2 options: increase the number of orders or increase the average order value (AOV). Your marketing efforts often drive the number of orders you generate. These digital marketing techniques are typically focused on generating new customers and repeat purchases.

However, even if the number of customers you get monthly remains the same, you can still grow your business by increasing your average cart total. For context, if 100 customers spend $20, then you have $2,000 in sales. Increasing the average ticket by $5 brings total sales up to $2,500. 

There are many ways to grow the average order value on your e-commerce site. Try out a few of these tricks to see if they work for you. 

Set Free-Shipping Thresholds 

Free shipping is a great value-add that e-commerce businesses can use to grow the AOV. For example, Smack Apparel, a college and pro sports apparel company, uses a $40 free-shipping threshold to incentivize customers to buy multiple shirts (with an average price point of $22.99). 

When a customer sees that their cart is close to the $40 threshold for free shipping, they’re more likely to add an extra shirt to avoid paying for the shipping cost.

Many online stores use free shipping to increase the average order value, and they vary drastically from one store to the next. Large department chains like Macy’s and JCPenney will usually set a moderate threshold of $25–$50. 

The limit that you set for free shipping should depend on your customers’ spending habits. If your average online ticket is $25, then most people won’t add $75 worth of items to get free shipping on orders over $100. However, they may add another item to hit a $30–$40 free-shipping limit. You want your customers to work to earn free shipping while still seeing the limit in their grasp. You also want to make sure the free-shipping threshold is profitable for you. 

Suggest Additional Items

Along with incentivizing customers, you can also use your marketing and web design to get customers to add more items to their carts. With a brick-and-mortar store, you’d cross-sell items by placing them near each other: socks and shoes are placed together while the jewelry section is stationed near evening wear. This space optimization encourages people to pick up a few more items to complete an outfit before they check out. Your website can—and should—simulate this same experience.

Consider adding a complementary-items widget for your online store: on Amazon, this is the “Customers Also Bought” box. Shoppers can find relevant items that they also need with the help of your suggestions. 

For example, if you sell outdoor equipment and a customer is looking at a snorkel, the “Customers Also Bought” box would contain a mask, flippers, and other diving gear. You can even offer a discount for picking up a whole snorkel package.   

The goal of your online store should be making it as easy as possible for customers to find and purchase goods—and directing in-market customers to relevant products is a great way to accomplish that.

Upsell Customers With More Expensive Items

Cross-selling is the process of showcasing other complementary items that your customers might enjoy. Upselling is the process of highlighting more expensive options or add-ons for certain items.

You often see examples of upselling in the travel world. If you book a flight, the airline will encourage you to upgrade to first class or pay for priority boarding. If you buy a ticket at a theme park, you will see offers for backstage tours, meal plans, and line-skipping passes. 

With upselling, you’ve already convinced customers that they need your products—now you need to convince them to spend more on upgrading them or choosing a more expensive alternative from your offerings. You achieve this by proving value. 

Does a different product come with a longer warranty? Does it have more features? Is it a better-known brand? Even if the upsell is only a few dollars, it can positively impact your average order value. 

You can achieve upselling with the help of online widgets as well. Instead of a “Customers Also Bought” box, you can feature alternative products that your customers might also consider.

This feature creates the online equivalent of looking at different brands and items in a store. If customers land directly on your product pages (either through organic SEO or paid ads), they might not find the other brands you carry unless you promote them.

Invest in the Usability of Your Online Store 

While some customers are forgiving of a small business website with a few glitches or errors, many won’t be. 

Studies show that 79% of shoppers won’t return to a slow-loading website—and customers consider a website slow if it takes more than 2 seconds to load. Keeping your website well-maintained and user-friendly can go a long way toward winning customers over and getting them to spend more. 

Many e-commerce businesses choose to use a platform like Shopify, which is specifically built for online stores. Shopify comes equipped with a standard technical suite that solves many of the issues that can come with operating your own website. Shopify also offers several free and paid themes, which will help you to improve your site’s design. You can always invest in custom development and UX, but using an out-of-the-box solution like Shopify is a great way to get started.

Running a successful e-commerce business takes a lot of work. From creating the online store and producing products to marketing the business and fulfilling orders, there are many activities needed to generate a sale. By prioritizing techniques that increase the average order value, you can increase the value of each of your sales and improve the ROI for all your other efforts.

About the author

Derek Miller
Derek Miller
Derek Miller is a writer specializing in entrepreneurship, small business, and digital marketing. His work has featured in sites like Entrepreneur, GoDaddy, Score.org, and StartupCamp. He’s currently the CMO of Smack Apparel, the content guru at Great.com, and a marketing consultant for small businesses.

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