Are you running a Shopify store and looking to boost your revenue without acquiring more customers? One powerful strategy to achieve this is by increasing the average order value (AOV) of your existing customers. AOV represents the average amount spent by a customer during a single transaction. By encouraging customers to spend more each time they shop with you, you can significantly impact your bottom line.
In this blog, I have covered 10 effective ways to increase the average order value of your Shopify store. Before that, let’s understand what is average order value with an example.
- 1 What does Average Order Value mean?
- 2 10 Highly-Effective Ways to Increase the Average Order Value of Shopify Store
- 3 Wrapping Up
What does Average Order Value mean?
Average Order Value (AOV) is a key metric in e-commerce and retail that represents the average monetary value of orders placed by customers on your website or in your store during a specific period of time. It is calculated by dividing the total revenue generated from orders by the number of orders received within the same time frame.
The formula for calculating AOV is:
AOV = Total Revenue / Number of Orders
For example, if an online store generates $10,000 in total revenue from 500 orders in a month, the AOV for that month would be:
AOV = $10,000 / 500 = $20
In this case, the average order value is $20, meaning that, on average, each customer’s order amounts to $20.
10 Highly-Effective Ways to Increase the Average Order Value of Shopify Store
Provide Product Bundling
Bundling products is a proven strategy to entice customers to spend more. Create product bundles by grouping related items together and offering them at a discounted price when purchased as a bundle. For example, if you sell cosmetics, bundle a skincare set that includes a cleanser, moisturizer, and serum at a lower price than if customers bought each item individually.
This not only encourages customers to buy more but also enhances the perceived value of their purchase. Product bundling helps customers to buy everything on one shot they need and store merchants get the benefit of selling multiple products instead of one.
Cross-Sell and Upsell Items
Leverage the power of cross-selling and upselling to increase the average order value of your Shopify store. Use Shopify apps or built-in features to recommend complementary products or premium versions of what customers are currently viewing.
Cross-selling is offering complementary products that go well with the customer’s main product. For instance, if a customer is looking at a laptop, suggest a bundle with a faster processor or additional accessories. Up-selling includes the high-priced or upgraded version of the product chosen by the customer. Encouraging customers to buy more expensive items through upselling helps to increase the average order value.
Implementing quantity discounts in your e-commerce store is an effective strategy to encourage customers to buy more by offering them discounts when they purchase multiple units of a product. For example, offer discounts like “Buy 2, Get 10% Off” or “Buy 3, Get 15% Off.” Shoppers are more likely to add items to their cart to unlock these savings, increasing their overall order value.
Make sure that customers can easily see the quantity discounts you offer. Display them prominently on the product pages, cart page, and during the checkout process. Use clear and concise language to explain the savings they’ll receive when they buy more. Add a sense of urgency or scarcity to your quantity discount offers.
Loyalty programs can be a powerful tool for increasing the Average Order Value (AOV) in your e-commerce store. These programs incentivize customers to spend more by offering rewards, discounts, or exclusive benefits. Reward your loyal customers with special discounts, early access to products, or exclusive offers. Loyalty programs not only build a stronger relationship with your customer base but also incentivize repeat purchases and larger orders.
By implementing a well-designed loyalty program and actively promoting it to your customer base, you can incentivize recurring purchases and encourage customers to spend more, ultimately increasing your store’s AOV.
Free Shipping Threshold
This approach encourages customers to add more items to their cart to meet the minimum order requirement for free shipping. Set a minimum order value for free shipping. Customers are more likely to add items to their cart to meet this threshold rather than paying for shipping. This not only boosts AOV but also encourages larger purchases to save on shipping costs.
The minimum order value should strike a balance between being attainable for customers and financially sustainable for your business. By strategically implementing a Free Shipping Threshold and promoting it effectively, you can motivate customers to spend more in a single transaction to qualify for free shipping.
Learn About How to Set Up Free Shipping on Shopify?
Leveraging limited-time offers is a highly effective strategy to increase the Average Order Value (AOV) of your Shopify store.
Create a sense of urgency by running limited-time promotions. For example, you could offer “Buy One, Get One 50% Off for the Next 24 Hours.” Scarcity and urgency encourage customers to act quickly and add more items to their cart.
Implement product recommendation engines that display related or recently viewed products on the checkout page. This serves as a gentle reminder of items customers might have overlooked, potentially leading to additional purchases.
Shopify provide a built-in recommendation features to implement product recommendation strategy. You can also include personalized product recommendations in your email marketing campaigns. Send tailored product suggestions to subscribers based on their previous interactions with your store.
Personalization enhances the customer experience, fosters loyalty, and drives revenue growth. By offering personalized discounts that cater to the specific needs and preferences of your customers, you can encourage larger purchases and ultimately increase the AOV of your Shopify store. Personalized discounts are tailored to individual customers based on their behavior, preferences, and purchase history. Utilize customer data to offer personalized discounts based on their browsing and purchase history. When customers feel that you understand their preferences, they are more likely to spend more with your store.
Encourage customers to explore different product categories by suggesting items from other sections of your store that complement their current selections. For instance, if someone is buying a coffee maker, recommend coffee beans or mugs.
Don’t stop at the sale; consider post-purchase upselling. After a customer completes a purchase, present them with a one-time upsell offer. This could be a discounted add-on product or an invitation to join an exclusive membership program.
By implementing these 10 strategies, you can effectively boost the AOV of your Shopify store and increase your revenue. Remember that each business is unique, so it’s essential to monitor the impact of these tactics on your store’s performance and adjust them accordingly. The goal is to create a win-win situation where your customers receive added value, and your business thrives financially without having to continually acquire new customers.
Hire Shopify Developer to help you implement AOV strategies for your Shopify store.