Brick and mortar stores must be able to find ways to increase their average order value, which is a strong indicator of the business’s success. Ecommerce businesses need strategies in place that will allow them to meet this target daily without sacrificing customer service or experience. It would be best if you continued coming up with innovative strategies to boost your earnings as an ecommerce store. However, it is a frequent misperception that you must acquire new clients to increase sales. That isn’t the case at all. In truth, there is a slew of strategies to boost income without bringing on new clients. Rather than concentrating on increasing the number of transactions on your ecommerce site, you should focus on improving the value of each transaction. Don’t get me wrong: I think it’s great. New clients and more transactions are good news for your company. However, it isn’t the only technique to increase your earnings. On your platform, what is the typical order value? This measure should be monitored at all times if you’re not acquainted with the average order value or AOV. Techniques can help you boost your AOV for both new and current clients. It all comes down to how you present information on your website. I understand what some of you are thinking. Your average order value is now acceptable. Is it indispensable to make any adjustments? Absolutely. There is always space for improvement when it comes to an AOV. The sky is the limit.
Tactics to increase your e-commerce store income:
1. Set a minimum order amount to qualify for free delivery.
Free shipping has a significant influence on online conversion rates. If unexpected fees, such as shipping, are provided during the checkout process, 60 percent of customers will leave their shopping carts. I firmly believe that you should not pass on your delivery charges to your clients. However, you do not have to provide free delivery on every purchase. Here’s what I’m talking about. Someone needs to pay for shipping at the end of the day. Either you or the consumer will be the one to blame. Include those delivery charges in the price of your goods. The buyer will think delivery is free, but you’ll still be able to recoup the expenses with their purchase. Set a minimum purchase amount for free delivery eligibility to improve the average order value. REI employs the following strategy:
Take a peek at the shopping cart in the image below. The total cost of the items in your shopping basket is $22. However, this amount is insufficient to qualify for free delivery. In two places on this page, REI informs shoppers that items over $50 ship for free. Consequently, individuals will be more likely to add things to their shopping carts. If you don’t have to, why pay for shipping? If the consumer accepted the bait, REI could enhance the transaction’s purchase price by more than twice the original value.
2. On the checkout page, there’s an upsell.
The most successful ecommerce stores discover strategies to upsell their consumers just as they are about to complete their transaction. However, if you decide to use this method, you must exercise caution. This is why. Upsells should not detract from the primary desire to buy. Customers have already added products to their baskets and want to convert when they arrive at your checkout page. Allowing your upsell to be a distraction that prevents customers from completing the purchase is a bad idea. The purchasing procedure should be as smooth as possible, with as little friction as feasible. As a result, don’t make the upsell a separate process. Let me give you an example of an excellent upsell from Jetties Bracelets to demonstrate what I mean:
The website automatically created an upsell of different things usually bought together based on what consumers placed in their shopping basket. All the consumer has to do is click one button to add these upsell to their basket. This increases the order’s value from $9 to $27. As you can see, a simple upsell on the checkout page has the potential to treble the purchase value. Just make sure it’s not obtrusive or intrusive to the consumer. You want them to convert even if they don’t buy the upsell.
3. Discounts for packages are available.
Customers are enticed to spend more money when they get a bundle or package discount. This strategy’s principle is straightforward. By concentrating on your pricing approach, you may increase your profitability. The majority of pricing strategies make purchasing a single item more costly. However, if the consumer is prepared to buy more quantities of that item, they will get a discount based on their spending capacity. It’s the fundamental approach underpinning “bulk purchasing,” widespread among B2B businesses. You may, however, use the same strategy in your B2C ecommerce store. Customers should not be required to purchase thousands of units of the same product to get a bulk discount. Take a look at how MeUndies does it:
This method is used across the brand’s ecommerce site. For starters, it promotes that buying in bulk may save clients up to 35 percent. Then, if you go to the site’s navigation menu, you’ll see that “packs” are one of the five possibilities for product segmentation. When a buyer clicks on a pack to buy it, the corporation emphasizes the savings. For example, MeUndies provides a discount on this pack of underwear if you purchase three pairs instead of one. When a consumer buys a 6-pack, the cost per pair drops much more. Customers who buy a 10-pack will save even more money. A single pair of underpants costs $20. However, a 10-pack costs $15 a couple. This method encourages customers to spend more money by giving them the impression that they receive a better deal. Customers who spend more money will get a 25% discount. As a consequence, you’ll reap the benefits of a more excellent average order value.
4. Include a gift-wrapping service.
Increasing the value of your items is another strategy to boost your ecommerce store’s AOV. What can you do to increase the value of your products? The gift-wrapping option is one method I favor. Eighty-two percent of buyers intend to purchase presents online over the holidays. People purchase presents at all times of the year, not just around the holidays. Birthdays, marriages, graduations, retirements, and other milestones are when people get presents. Your gift-wrapping service should be offered 24 hours a day, seven days a week. Take a look at how Target employs this method to boost AOV on their ecommerce site:
Customers may choose whether or not their purchase includes a gift on the checkout page. If the customer wants their presents wrapped, they’ll have to pay an extra $5.99 per item. A three-gift purchase adds around $18 to the shopping cart. It’s all about the customer’s convenience at this time. Without this option, the client would have to have the present delivered to their home, wrap it, and then send or re-ship it to the intended recipient. That is inconvenient in the extreme. On the other hand, the gift wrap option removes these procedures and, as a result, enhances the client experience. They will gladly spend more money.
5. Charge extra for things that are customized.
Let’s keep talking about strategies to make whatever you’re selling more valuable. If you can find out how to apply this notion to your company, you might see a significant rise in revenue. Because customers are ready to spend 20% extra for customized items, this is the case. You should be aware of this and alter your personalization approach appropriately. On The Perfume Shop’s ecommerce site, you can see how they do it:
Customers may receive unique engravings on certain bottles from this firm. This update, however, comes at an extra expense. Customers, on the other hand, are eager and able to pay extra for personalization, as you can see. It would be absurd to expect a premium function like this to be provided for free.
6. Minimum expenditure levels should be incentivized.
I mentioned minimal expenditure limits before. An excellent example of this tactic requires a minimum purchase value to qualify for free delivery. However, free delivery isn’t the only option to entice customers to spend more. You may create a discount depending on the amount of money you spend. Take a look at this sample from the Rue21 ecommerce site:
Customers may save 30% on their purchases, a significant discount. There is, however, a catch. They must spend a minimum of $40, qualifying for the 30% discount. This method is effective because it includes a deadline. As you can see, there is a running clock on the site that indicates when the deal will end. Customers will feel compelled to act quickly to get this deal before it is too late. Rue21 has enhanced conversion rates while also raising AOV by combining these two tactics.
7. Use BOGO
Have you ever heard of the term “buy one, get one free”? BOGO means “buy one, get one free.” After then, it’s up to you to pick how you want to finish the phrase. Get one free when you buy one. Buy one and get one half-price. There are several solutions available to you. The success of BOGO is because it motivates individuals to spend more money. After all, how could they let such a terrific offer pass them by? Here’s what I’m talking about. If you offer a “buy one, get one free” promotion, it means that if someone buys two goods, they will get two other items for free. They’ll receive three free if they purchase three, and so on. On their website, Maurices employs the following strategy:
When you go to their ecommerce site, it’s the first thing you see. Allowing BOGO to restrict your creativity is not a good idea. You may do similar campaigns. “Buy two, get one free,” for example, would encourage individuals to spend even more money. This method may help you boost your average order value in any case.
8. Return the money
People will be more likely to spend more money if you implement a cashback scheme on your ecommerce site. The more money they spend, the more money they’ll get back in cash. They’ll gain from these incentives just as much as you will in the end. It’s a win-win situation for all parties involved. The cash system at Kohl’s is a fantastic example:
Customers will earn $5 in Kohl’s Cash for every $25 they spend. This offer is available both on its ecommerce website and in its physical locations. You may wish to explore a similar structure if you have physical stores in addition to your ecommerce site. Customers get Kohl’s cash in the form of a coupon when they spend money. These vouchers are saved in their customer profiles automatically. This expenditure is unrestricted at Kohls. For example, customers who spend $1,000 will get $200 in Kohl’s cash as a reward. I understand what some of you would be thinking. Isn’t it true that if the cashback is finally redeemed, it lowers the average order value of subsequent purchases? Certainly not. People are unlikely to spend just the amount of their incentive on subsequent purchases. You may also establish expiry dates for your cashback incentives like Kohl’s does. Not all of these prizes may be utilized.
9. Customers would appreciate it if you recommend things to them.
According to studies, consumers are more inclined to buy from online shops that propose items based on their customers’ purchasing history. You may leverage clients’ browser history for product suggestions in addition to information about their prior purchases. This method is most effective when consumers are encouraged to construct customer profiles. It makes it easy for you to keep an eye on their actions. If you have a mobile app, it’s much more effective. According to my list, personalization is one of the top 10 aspects of a successful mobile commerce app. It talks to your consumers when you propose things to them. When I spoke about upselling previously, I mentioned this. However, you don’t have to wait until the user has added items to their shopping basket to provide suggestions. Take a look at this sample from Sephora’s website:
The company offers a “recommended for your area” on its site, in addition to suggesting and exhibiting its bestsellers. Depending on who is browsing, the things shown will change. For example, let’s imagine you have an ecommerce store that offers sports equipment. One of your clients just bought a new set of golf clubs on your website. You may suggest golf balls, tees, golf spikes, and other comparable items the next time they visit your site. These suggestions will eventually assist you in increasing your AOV.
10. Make a loyalty program that is dependent on spending levels.
Loyal customers spend more money. 82% of customers are more inclined to purchase from companies that provide loyalty programs. Furthermore, recurring consumers spend 67% more than new customers. That is why you must understand how to develop a client loyalty program to enhance sales. There are, however, several sorts of loyalty schemes available. Creating a program based on spending levels is one of my favorite possibilities. This is the most effective technique to encourage your current consumers to spend more money each time they visit your store. For example, here are the Nordy Club advantages, which are part of Nordstrom’s reward program:
As clients hit each spending threshold within a calendar year, the rewards improve when you can see. Customers that spend the most money are rewarded with these loyalty schemes. Most consumers are unlikely to spend $500 or $2,000 on a single transaction. They may, however, be prepared to pay an additional $50 or more on each transaction to advance to the following rewards tier. You’ll raise your average order value by persuading customers to spend more.
Conclusion
While new consumers are always beneficial to a company’s development, they are not necessary for revenue growth. Therefore, rather than focusing on client acquisition, you should concentrate on techniques that encourage current and potential consumers to spend more money on your ecommerce site. The average order value is an important measure to keep track of. Whatever your current AOV is, I’m convinced you can enhance it. Don’t know where to begin? Use this guide as a starting point. You’ll see a considerable increase in your ecommerce average order value if you use the tactics I’ve discussed above.
Frequently Asked Questions
How does e-commerce increase average order value?
A: E-commerce is electronic commerce where transactions are made over a computer network, usually via the Internet. Using computers to conduct purchasing and sales creates efficiencies in both operations.
What is the average order value in ecommerce?
A: The average order value in ecommerce is $28.
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