Would you like to generate more sales in your Shopify Plus store without focusing solely on acquiring new customers to do so? Then increasing the average order value is the right set screw for you. Because the goal here is to get people who are shopping in the store anyway to store more. In most cases, this is more profitable than acquiring new customers.
So in this post, we're going to focus on increasing the average order value, also called AOV, and give you 11 tips on how to increase this very metric on Shopify Plus.
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What is Average Order Value / AOV?
AOV (Average Order Value) is the average order value, i.e. the value a customer spends on average when shopping in your online store. This value is calculated as follows:
Example: Let's assume that your online store generated sales of 31,000 euros in September with a total of 1,000 orders. 31,000 euros divided by 1,000 = 31 euros, so your monthly AOV for September is 31 euros.
Average order value, then, is a performance metric that online retailers track to understand their customers' shopping habits. As with other indicators, AOV can be determined over any period of time, usually observing the moving monthly average.
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Why is the AOV important?
If you know the average order value of your business, you can evaluate all your online marketing efforts and your pricing strategy. That's because this metric lets you measure the long-term value of each customer, and it helps you set goals and strategies, as well as measure the effectiveness of those strategies.
Retailers who sell their products between $15 and $65 but have an AOV of $30 may find that their customers are 1) likely to order multiple items at once and 2) mainly buy the lower priced products.
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Why should you increase your AOV?
By monitoring your AOV regularly, you can increase your marketing ROI. The higher your AOV, the more revenue can be generated from each paying customer, which is important for the profitability of your business.
For example, if you know which traffic source generates the most revenue, you can allocate more resources to the best performing channels and further increase your AOV.
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11 Tips increase the AOV with Shopify Plus
There are many strategies to increase your average order value. They are basically different ways to get your customers to spend more by buying either more or more expensive products than they had originally planned. Increasing AOV can be done at any stage of the sales funnel.
Getting customers to spend more can be achieved through clever marketing techniques - for example, presenting enticing product options in a way that motivates them to buy - or through direct incentives such as free shipping
Among the most successful strategies for increasing AOV:
Quantity discounts: "This towel costs 9 euros. However, if you buy at least 3 towels, you can save 30%."
Limited-time offers: When you offer a limited-time discount, your customers feel a sense of urgency and are more inclined to buy immediately.
Cross-selling: "How about a pair of socks to go with the tennis shoes you just ordered?"
Upselling: "Would you rather buy this backpack for only €10 more than the one in your shopping cart?"
Start a loyalty program: Interestingly, 86% of consumers would buy more products or services if they liked a loyalty program.
Free shipping: Free shipping with higher minimum order value.
Coupons for next purchase: "Spend $50 and get $5 off your next purchase!"
Charitable donations with a minimum purchase amount.
Use social proof: according to Search Engine Land, 88% of customers trust reviews from other users as much as recommendations from people they know.
Return policy: "If you're not satisfied with the item, feel free to send it back."
Offer customizable products: Interested store visitors are more likely to buy a high-priced product if they can help design it according to their own ideas. In addition to the fun effect of DIY, the argument of uniqueness is often very convincing.
If you plan to implement one or more of these strategies to increase AOV, it is usually useful to divide your customers into several groups based on their purchase history, for example:
Small vs. large purchases
Frequent vs. rare orders
This way, you can respond to each group with different offers. For example, a loyalty points program makes sense for frequently returning shoppers.
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Keep an eye on other e-commerce metrics as well
So, if you want to increase your average order value and thus their gross profit, it is very important to always keep an eye on the AOV. However, there are other online commerce metrics that you should not forget:
ROAS: The abbreviation stands for "Return on Advertising Spend." This metric is used to evaluate and compare advertisements with each other. The AOV can tell you whether your marketing efforts are worthwhile or not.
CRO is short for "Conversion Rate Optimization" and is calculated as follows:You should note that it doesn't make sense to increase the average order value by any means if it causes the conversion rate to drop.
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Why A/B testing can help increase AOV
As we now know, there are very different strategies to increase the AOV and at the same time there are also the most different customer groups. For these reasons, it makes a lot of sense not only to segment the customers, but also to conduct so-called A/B testing. This is a method that - in this case - compares two versions of an online store to determine which performs better.
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If you want to implement this strategy, you could, for example, compare the original version of your shopping cart with a version that includes a graphic and the text "Shoppers of this product often buy this, too". If your AOV goes up, then you know you should keep this second version. In the next step, you could compare it again with a third version where you place, for example, the text: "Products recommended for you" in your online store and test which works better.
So you notice: There are different versions of each of the strategies mentioned above. So you have many different ways to improve your AOV, which is why it makes sense to set up a methodical series of A/B tests. This way you can collect enough data for each test.
Of course we are very happy to support you in increasing your AOV on Shopify Plus. If you have any questions then contact us today.
AOV is an important metric in e-commerce. Just as Shopify Plus merchants should always optimize their store for more conversions, it's important to implement strategies to increase the average order value. It can have a big impact on your revenue, and by constantly analyzing your AOV, you can gain valuable insights into your customers' buying behavior. You can already hear it: increasing AOV is a continuous process.
Limited-time deals, shopping cart cross-selling, upselling, loyalty programs, free shipping, coupons, nonprofit promotions, social proof, return policies, and customizable products are all great ways to increase AOV on Shopify Plus. Of course, you don't have to implement all the strategies at once. Start with one method and don't forget to do A/B testing to be able to check what really makes sense for your business. But also remember to focus on other key performance indicators when increasing AOV, such as traffic, CRO, and customer lifetime value.
Frequently asked questions about the Average Order Value (AOV)
What is AOV?
Average Order Value (AOV) is the value a customer spends on average when they store at your store.
Why is AOV so important?
If you monitor your AOV sales well, you can use marketing to increase ROI and generate more revenue for your business.
How do I calculate AOV in marketing?
Average order value (AOV) is the average amount each customer spends per transaction in your store. You can calculate your average order value with this simple formula: Average Order Value = total sales / number of orders.
How to increase Average Order Value?
Some tips on how to increase your AOV: 1. volume discounts 2. time limited offers 3. cross-selling 4. upselling 5. start a customer loyalty program 6. free shipping free shipping with higher minimum order value 7. coupons for the next purchase 8. charitable donations starting from a minimum purchase amount 9. use social proof 10. return policy 11. offer customizable products 12.Make your customers feel valued and rewarded for it.