Average Order Value (AOV) is the average amount spent by customers on each online purchase made on your webstore. The value of the average basket is usually calculated using this formula:
Total revenue before taxes and shipping / number of orders placed = average basket value.
Working on increasing the value of the average shopping cart is a good tactic for increasing your online revenue. It’s cheaper to retain an existing customer than attract a new one, so work on maximizing revenue from your current customers.
Before introducing you to our techniques for increasing average order value, we remind you that your goal in boosting your customer’s average shopping cart value is to stimulate additional sales. It’s then a case of swaying them enough to click ‘buy’.
Are you ready? Here’s our 7 favorite tactics for increasing your store’s average order value:
1. Cross-selling
Cross-selling is associating a complementary product with one your customer is about to buy.
These complementary products can come from a completely different category, but they’re items that could be used together or that your customer might think of at the time of purchase.
Instead of simply recommending other products, choose products that are complementary to the product the customer has placed in his or her shopping cart. For example, a pair of pants for a tank top or the previous album of the artist whose CD they just bought.
Amazon are the masters when it comes to cross-selling and it’s very effective for building up large baskets.
2. Bundling
Bundling involves offering several products together, as if they were one, to create an appealing bundle.
In general, the more products offered in the package, the more value perceived by the customer. This will increase their purchase intent, and the size of your order values.
There are two different types of bundling:
- Pure bundling is the purchase of items grouped into one. For example, when you buy the Microsoft Office pack, it’s a complete pack. You cannot buy only Excel or Word.
- Mixed bundling is where you offer the choice to purchase items separately or to buy the pack that contains several products at a more attractive price.
Makeup brand Kylie Cosmetics creates a bundle with 6 lipsticks with a $20 difference shown.
With bundling you can let your buyers know about some products they might not have discovered and bump your average order values.
3. Loyalty programs
Loyalty programs are another great way to increase shopping cart value. When you motivate your customers with a rewards points scheme, you encourage them to buy more.
“Increasing retention by just 5% through customer loyalty programs can boost revenue by 25 to 95%.”
Annex Cloud
Customers feel motivated to see their points increase when they shop. If you can offer discounts, gifts, or exclusives too, then your customers should stick around.
Here’s an example of a tiered rewards scheme that rewards big baskets:
4. Free delivery
Most consumers would rather spend a little more on a product than pay for delivery.
Most customers are willing to add items to their online shopping cart in order to reach the minimum amount required to qualify for free shipping. Our advice is that you set a minimum level for free shipping that ensures you are always profitable.
There are several ways you can implement free delivery to increase the value of those baskets:
- Free shipping with no conditions of purchase.
- Free shipping on a product or a range of products.
- Free shipping from an amount reached.
- Free shipping with limited time offer.
Free delivery isn’t going away any time soon, and it’s a big item of consideration for customers.
5. Give a gift
Who doesn’t like to receive a gift? Your customers like to feel privileged and giving a gift is a low cost investment for you that can pay off.
Give your customers an experience they will remember by giving them a superior product at the same price. The next time they make a purchase, they will remember the experience you gave them and will certainly want to repeat it, even if it means paying a little more than they originally planned. Nice!
6. FOMO
FOMO (Fear of Missing Out) refers to the fear of missing something.
Playing with people’s fear of missing something is a great way to generate opportunity buys. This technique uses time to motivate buyers to take action by offering limited irresistible offers.
If you have products that will soon be out of stock, display it clearly to your customers: “Only 10 left! Order soon!”. Your customers will be more likely to buy for fear of not being able to order afterwards.
You can also couple this technique with cross-selling by displaying the availability (only when the product is soon out of stock) directly in the box containing the associated products.
7. Turn it into a contest
Indicate that each customer who has placed an order during a given period will have a chance to win your “super gift”. To entice them to increase the amount of their order, tell them that they will get an additional entry with every $50 purchase.
If your gift is attractive enough, your customers will be inclined to spend more. It’s all about incentives.
(Don’t forget to check local laws concerning contests with a purchase obligation beforehand!)
Conclusion
It’s useful to have a global view of how average order values are distributed on the web. Statista provides a great report on the average value of online shopping orders in the United States by device:
We can see that the average shopping cart on desktop is in the lead with an average of $131.16, with only a slight difference between tablets and phones. However, the picture is a clear that an omnichannel shopping experience is required.
All these techniques will allow you to increase the average order value for your store. Your website is your showcase and it’s the main factor in gaining the confidence of your website users. If you have a great offer, it means nothing if it’s not being communicated to your customers.
Remember to turn every point of interaction wit your customers into an upselling opportunity. You can even profit when you’ve sold out of stock!
If you want to implement any of these tactics on your e-commerce website and you need help, then don’t hesitate to contact us.
With personalized advice it’s possible to do even more to boost your average basket! 🔥
