Want to Increase Average Order Value in Your Store? Here Are 8 Creative Ways to Do So

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What is more thrilling than building a great product and brand? Acquiring a larger market share? Maybe. Having a product that customers love? That’s good. But what about finding ways to increase profits rather than revenue alone? Don’t you think that’s more thrilling and rewarding?

But how can you, as an e-commerce business, increase your profits? The first step is to study the data and analyze it accurately. Then, you’ll need to use this analysis to make valuable deductions to move the business forward.

One such piece of data, that’s both important and super helpful to e-commerce businesses, is the average order value (AOV). By understanding what your business’s AOV is and which products are purchased more frequently, you can get an idea about how to increase sales and profitability.

In this article, we’ll be focusing on what AOV is and how to increase average order value for your e-commerce website without sounding salesy or annoying your customers.

What is average order value?

Average order value (AOV), sometimes referred to as average basket value (ABV), is the average amount buyers spend on your products when they buy from you.

It is a vital but imperfect measure of business health or growth. AOV is essential to track but shouldn’t be the only metric of business health because it can be misleading when relied solely on business decisions.

laptop screen with small shopping cart and several packages indicating an increase in average order value for e-commerce

The interest in AOV stems from the idea that if you can get people to spend more money per order, you’ll make more money. So how can you achieve this?

Why a higher AOV is important

Increasing your business’s AOV has numerous benefits. Here are few worth considering:

  • Increase in overall sales revenue
  • Minimized cost of acquiring new customers
  • More revenue and profit over a shorter period
  • Increased customer lifetime value
  • Increased customer loyalty and retention 
  • Cost-effective marketing returns

Now let’s look at the ways to increase your store’s average order value.

How to increase average order value

To increase average order value via your website or mobile app, here are a few tips to consider. You may apply all or just a few of these tips based on the size of your business and the types of products you sell.

1. Optimize product display

Often, buyers have needs they aren’t aware of or think it’s not a necessity – yet.

Displaying related goods near those being bought can increase average order value. Swedish furniture retailer IKEA does this A LOT!

Whether you choose to pair items that sell well together across your store or make offers for related products is up to you.

Customers find these related goods valuable and add them to the cart even though they had no plans of buying the second item initially. And the result? Higher order values for you and more revenue.

This is also known as upselling and cross-selling.

2. Offer alternative items at the checkout

This strategy works both for online and offline stores. Here, alternative items are displayed at checkout, especially items cheaper than those they abandon in the cart or were admiring but couldn’t afford.

Also, including a list of items in your product descriptions or checkout details that will guarantee buyers the highest value when paired together, buyers would believe that and add those suggested item(s).

3. Create a threshold for free shipping

It’s no longer news that customers appreciate free shipping with their purchases. Use this to increase your average order value by creating a minimum purchase quantity or price that qualifies for “free shipping.”

Board with a black background with the word e-commerce written in several colors.

For example, offering free shipping for orders over $100 will likely get buyers to increase the value of their shopping carts to qualify for free shipping. 

4. Optimize your web design to highlight certain priced plans

Depending on your niche or industry, you may consider a three-tiered pricing plan.

If well-highlighted in terms of layout/color/content, this may get buyers to buy more. If you’re using this tactic, you should indicate to customers that your middle and highest pricing plans offer the best value for money.

When buyers subscribe to either plan, this translates to a higher AOV for you.

5. Give product discounts

This is another valid means of increasing the average order value of your business. Although it’s effective, it is still a double-edged sword that could cut deeply into your revenues if it’s mishandled.

Here’s how this works:

  • Offer a discount based on minimum spend (Ex: $5 discount on $100 worth of purchases)
  • Offer a discount based on value bracket (Ex: $5 discount on $50 purchases, $10 on $85 purchases,…etc.).
  • Offer limited-time promotions

Great deals are rare to come by. And whenever they do come around, no one wants to miss out.

Using this fear of missing out (FOMO) emotion-induced strategy creates an irresistible time-based offer and increases your AOV or ABV.

Here are different strategies to use to achieve this result:

  • Offer discount codes that last for 48 hours.
  • Offer a certain amount off if products are purchased within a specified timeframe. For example, customers get $30 off of $120 purchases from August 1st-7th or on certain days like the first Tuesday of each month.
  • Offer bundle discounts, especially for products buyers are willing to buy more of if their prices were cheaper. For example, customers get 15% off on 3 packs/pieces of X product or 40% if they buy 5 packs of product Y.
  • Consider discounts during festivities such as Valentine’s day, Christmas, Halloween,…etc. This will depend on the types of products you sell and your business.
  • Consider a “buy one, get one” strategy.

7. Create a Loyalty Program

Loyalty marketing is a long-term strategy that’s built on the idea of customers getting rewards for being regular customers.

Whenever they spend money inside a physical store, online, or via your mobile app, customers get points that translate to discounts or rewards for a certain number of purchases or value of money paid.

There are many types of loyalty and rewards programs. By creating a loyalty program, and measure its success, you’ll be able to retain customers for longer, generate more revenues, and increase your AOV.

In other words, loyal customers = more purchases = higher AOV.

Coupling your loyalty program with a referral program translates into even more benefits, more revenue, improved brand reputation, and a loyal fanbase.

8. Study the data and your process

As mentioned earlier, data gives you insight into what works and what doesn’t. It also helps you see what works and needs improvement.

By examining your lowest-performing products against the best-performing ones, you can determine the way forward.

Image showing laptop screen with a small shopping cart and several boxes and designs of products customers can buy

Here are a few questions to ask to help you get the most of your data and enhance your marketing efforts:

  •  Why do customers buy these items? Why do customers skip these products?
  • How do they use them?
  • What are their concerns about product [name]?
  • Which competitors are they actively comparing our products to?
  • How easy is the shipping method or delivery process?
  • Which customer demographic buy this specific product?
  • Which customer demographic buys more (or less)?

By answering these questions genuinely and making adjustments, you could be on your way to increasing customer satisfaction and generating a higher average order value.

Conclusion

When trying to grow an online store’s business revenue, most marketers’ first instinct is to find and acquire more customers.

But that’s not the only way to grow. In fact, this is a really costly method that could hurt your business on the long-term. Customer acquisition is an important step when you’re just getting started. But it’s not the only strategy to increase your revenues.

In fact, the best way to get more from customers is to build a connection with them and retain them. This helps you grow and make more profits without necessarily spending more on marketing, advertising, and other customer acquisition and retention costs.

Want to see how a loyalty and referral program increases your customer base and your average order value? Check out Gameball, the customer engagement platform the helps you connect, build loyalty, and grow. Gameball is also available with a free tier on Shopify.

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