8 Effective Ways to Increase Your Average Order Value (AOV)

What does every business eventually aim for?

It’s making money. Right?

Like any other business, even eCommerce ultimately aims to make a profit from each transaction and that is quite easily possible.

Wondering how?

Well, just by increasing the average order value (AOV), an eCommerce business can get all the benefits that it is aiming for.

There are different time-tested strategies to increase the average order value.

Before exploring those strategies, let’s first understand what is the average order value.

What is the Average Order Value (AOV)?

average order value

Average Order Value (AOV) tracks the average amount spent by each customer while placing an order in your store.

The simple formula for calculating average order value is by dividing the total revenue by the number of orders.

AOV = Total Revenue / Number of Orders

For additional benefits and easy calculations, you can use Google Analytics and track average revenue orders for the transactions.

Create a Google Analytics account and enable eCommerce tracking.

A report from Shopify shows that Japanese online buyers spend the most per order in the world followed by Canada, Singapore, and Australia.

The US ranked 5th with US$81.26 Average order value while neighbour Canada stands 2nd with US$100.66 AOV.

AOV by country on Shopify
eCommerce Average Order Value by Country on Shopify

How to Increase the Average Order Value?

Here are the most effective ways that compel your customers to spend more and boost your Average Order Value:

#1. Offer a discount on minimum order

Offering discounts is one of the most powerful ways to increase sales. You can establish minimum orders for discount.

For example, you can ask your customers to spend a minimum of $100 or more and avail 25% discount.

This can help to change your average order value. Many branded eCommerce stores are the biggest fans of minimum order discounts.

If there is a specific segment of products that you want your customers to pay attention to then you can experiment with offering minimum purchase discounts on those particular products.

Tips, Best Practices, and Example:

  1. Calculate your MOV and AOV. This tells you how much people usually spend. Then build your tired discounts on minimum order value.
  2. Offer this type of discount on products that need to be replenished or refilled. This will motivate customers to buy before the offer ends.
  3. Use quantity break apps. These apps are a perfect solution for automatically applying discounts based on how much a customer spends.
  4. Example: The Dom offers a $40 discount on $200 spent.

#2. Offer free shipping threshold

Just like offering a discount on minimum orders, you can also offer free shipping on a minimum order value.

For example – Free shipping on orders above $80. Additionally, you can display a notification at the checkout.

Suppose the customer purchase is less than the free shipping threshold.

In that case, notification might encourage the customers to make more purchases and avail of free shipping and eventually help you in increasing your average order value.

Especially if the difference between their purchase amount and the free shipping offer amount is less (for example: If the customer purchases for $65 or $70 and free shipping is above $80.) then there are more chances of making more purchases and increasing the average order value.

#3. Provide product bundle packages

This is another effective way to increase the average order value. Offering suggestions or additional products will be appreciated by the customers and can have an impact on the purchase.

For example, if the customer purchases a top, you can offer a suggestion that will complement the top like a pant, a pair of sandals, a bag, etc. If the bundle entices the customer additional purchase will be made. And not to mention bundle purchase is usually cheaper and saves time, so there are again great possibilities of an increase in average order value.

Buy one get one or buy two, get one also works as a bundle deal (Cross Selling). Make sure, the free product or gift you offer, doesn’t much affect your profit margin.

#4. Exclusive first-time offers

This is a powerful tactic to attract first-time buyers. You can offer any kind of discount or deal to your first-time buyers. This will not only increase sales but also entice the customers to shop again.

Make sure whatever you offer is exclusive, and attractive, and does not affect your profit margin. If they enjoy shopping at your site for the first time, there are chances, they will shop again and eventually, it will help in increasing your average order value.

Create attractive pop-ups or directly add the offers on the home page, so that it instantly grabs attention and encourages first-time visitors to make the purchase.

#5. Time-based offers

Flash sales and countdown deals create a sense of urgency and also FOMO (Fear of Losing Out) among the customers.

This greatly boosts your average order value, especially during a slack period or off-season period.

It can be anything, like for example if you are offering a 48-hour deal then you can offer the products at some flat discount rate, or give a gift on minimum order.

Highlight the deals on the home page itself, it should be easily noticeable. Do not forget to incorporate a countdown timer to create urgency.

#6. Loyalty programs

If there is something for first-time buyers then there should be something for your regular customers too.

Yes, for repeat customers, you can offer a loyalty program. This will build a strong relationship with your customers as well as increase your average order value.

Reserve all the best deals for your loyal customers as it will surely pay back you with good profits. They can turn up buying bulk quantities of products.

#7. Offer a gift card

If you want to increase your average order value, do not neglect the gift card. Gift card likely increases the chances of customer shopping from your website again.

The only thing you need to ensure is that you offer gift cards with only those products whose price is high enough that it doesn’t cause you loss or no loss no profit.

And yes, also do not forget that the gift card or discount coupon cannot be used with the current order.

The coupon or promo code can only be applied on the next order, only this way will it help to boost your average order value.

#8. Place high or highest-priced products first

The first products that catch the eye of the customers mostly influence their decision making so it is smart to showcase the high-priced products.

It is a psychological strategy. You can place the highest-priced product between two reasonably priced or low-priced products.

Even if the customer applies a price filter – low to high, you can promote the high-price tag products in between as ads or in suggestions.

If it is attractive enough, the customer can change their mind and buy the product which eventually will improve the average order value.

So, increase average order value by using these strategies wisely in your eCommerce business and get ready to witness the rise in sales.