How to Increase the Average Order Value on Your Ecommerce Store

How to Increase the Average Order Value on Your Ecommerce Store

But with that said, you don’t need to offer free shipping for every order. It’s either going to be you or the customer. Upsell on the checkout page The most successful ecommerce shops find ways to upsell their customers right before they finalize the purchase process. Based on what the customer added to their shopping cart, the website automatically generated an upsell of other items that are frequently purchased together. Include a gift wrap option Another way to increase the AOV of your ecommerce shop is by enhancing the value of your products. One strategy that I like is the gift wrap option. If you have a buy one, get one free sale, then that implies that if someone buys two items, they’ll get two free. For example, buy two, get one free would encourage people to spend even more money. Either way, this strategy can help you increase your average order value. This is the best way to get your existing customers to spend more money each time they shop.

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As an ecommerce shop, you always need to come up with new ways to increase your revenue.

But with that said, it’s a common misconception that you need to find new customers to generate more sales. That’s simply not the case.

In fact, there are plenty of ways to increase revenue without acquiring new customers.

Rather than trying to get more transactions on your ecommerce site, you should be focusing on tactics that increase the amount of each transaction.

Don’t get me wrong. Obviously, new customers and more transactions are great news for your business. But it’s not the only way to make more money.

What’s the average order value on your platform?

This is a metric that you should be tracking at all times. If you’re unfamiliar with average order value, abbreviated as AOV, it’s really easy to calculate.

AOV

Tactics that improve your AOV work for new customers and existing customers alike.

It’s all about how you display information on your website.

I know what some of you might be thinking. Your current average order value is adequate. Do you really need to make any changes?

Absolutely.

When it comes to what’s acceptable as an AOV, the sky’s the limit. Don’t settle for anything less. There is always room for improvement.

Use this guide as a reference for increasing your AOV. Once you apply these strategies, your ecommerce revenue will increase as a result.

Set a minimum for free delivery

Free delivery has a major impact on ecommerce conversions.

In fact, 60% of consumers will abandon their shopping carts during the checkout process if they’re presented with extra costs, like shipping.

So I’m definitely a big advocate of not placing those shipping costs on your customers.

But with that said, you don’t need to offer free shipping for every order. Here’s what I mean.

At the end of the day, someone has to pay for the shipping. It’s either going to be you or the customer.

So those shipping costs should be included in the base cost of your products.

That way, shipping is perceived as free to the customer, but you’ll still be able to cover those costs with their purchase.

If you want to increase the average order value, set a minimum purchase amount for free shipping eligibility.

REI uses this strategy on their website.

REI

Take a look at this shopping cart.

The total cost of the of the cart is $22. But this total isn’t enough to be eligible for free shipping.

REI reminds their customers in two places on this page that they ship orders over $50 for free.

As a result, people will be more inclined to add additional items to their cart.

Why pay for shipping if they don’t have to?

Assuming the customer in this scenario takes the bait, REI was able to increase the purchase amount of this transaction by more than double the initial value.

Upsell on the checkout page

The most successful ecommerce shops find ways to upsell their customers right before they finalize the purchase process.

However, you need to be careful if you decide to implement this strategy. Here’s why.

Upsells shouldn’t take away from the initial purchase intent.

By the time your customers reach your checkout page, they already added items to their cart and want to convert. Don’t let your upsell be a distraction that eventually hinders them from completing the purchase process.

The buying process needs to be as fluid as possible with minimal friction. So don’t make the upsell be an extra step.

Let me show you a great example of an upsell from Jetties Bracelets that conveys what I’m talking about.

jetties

Based on what the customer added to their shopping cart, the website automatically generated an upsell of other items that are frequently purchased together.

If the customer wants to add these upsells to their cart, all they need to do is click one button.

This takes the value of this order from $9 to $27.

As you can see, a simple upsell on the checkout page can triple the order amount. Just make sure that it isn’t too distracting or forced upon the customer.

You still want them to convert, even if they don’t go for the upsell.

Offer package discounts

Bundle or package discounts provide an incentive for customers to spend more money.

The concept behind this tactic is simple.

You can generate more profits by focusing on your pricing strategy. Most pricing models make it more expensive to buy a singular item.

But if the customer is willing to buy higher quantities of that item, they’ll receive a discount depending on how much they’re willing to spend.

It’s the basic strategy behind “buying in bulk,” which is common for B2B companies.

However, you can apply the same method to your B2C ecommerce shop. Customers shouldn’t have to buy thousands of an item to get a quantity discount.

Look at how MeUndies accomplishes this.

meundies
They use this strategy all over their ecommerce site.

For starters, they advertise that customers can save up to 35% off items by purchasing packs.

Then, if you look at their navigation menu, “packs” is one of the five options for segmenting products.

They reinforce these discounts when a customer clicks on a pack to purchase.

For this pack of underwear, MeUndies offers a discount for buying three as opposed to just one.

However, if they buy a 6-pack, the cost per pair goes down even less. Customers will benefit from additional savings if they buy a 10-pack.

The price of one pair of underwear is $20. But if they buy a 10-pack, it’s $15 per pair.

This strategy encourages people to spend more money because it makes them feel like they’re getting a better value.

Customers can get a 25% discount by spending more money. As a result, you’ll benefit from getting a higher average order value.

Include a gift wrap option

Another…

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