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 of aov marketing 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 12 tips on how to increase this very metric on Shopify Plus.
You want to increase your AOV on Shopify Plus and could use professional support?
Then feel free to contact us and we will be happy to assist you with advice and support.
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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12 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 AOV marketing - 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 measures to increase your AOV sales:
#1 Free shipping
The classic optimization way: free shipping. It's the easiest and fastest way to increase order value. It's not necessarily a matter of always allowing your customers free shipping (although that is, of course, a proven way to generate purchases in the first place). Rather, you should tie free shipping to a minimum order value. If your current average order value is €45, you can advertise free shipping from a minimum order value of €60. Just don't be too ambitious here - if your customers normally shop for 45 €, you won't go for an 80 € order value just to save on shipping costs.
It's also a big plus if you add a notification in the shopping cart that shows your customers directly how many euros are still missing until the free shipping. This is how Latori customer Shape Republic handles it, for example.
#2 Sell more with discounts and limited time offers.
You may think that offering discounts is contradictory in increasing AOV. After all, the ultimate goal is to generate more revenue with each sale. However, like free shipping, you won't give out discount coupons without a specific criteria. For example, you could offer a discount that can be used for a minimum order value.
When you offer limited-time discounts, you create a sense of urgency among your customers. As a result, they immediately start considering whether it's a good decision to buy now. In most cases, especially with brands that offer sale promotions only a few times a year, customers buy right away. The annoyance of not buying early would be too much.
"Buy one, get one for free" is probably the most common type of promotion that companies use in their daily marketing campaigns. Consumers like getting items for free. They are much more tempted to accept the offer if they believe they will get twice as much for the same price.
When using the tactic, however, be careful about which products you choose to promote. While consumers may be riding the "free" wave, they will quickly come to their senses if the offer turns out to be impractical. You should focus on products that 1) can be used up over time, such as cosmetics, food and beverages, 2) can be used in pairs - you wouldn't buy two hammers if you only needed one for the next 10 years, right? and 3) have a margin of at least 50%.
Of course, you can also add a low-priced product as a gift if your order exceeds a certain value.
Again, you can work with a time limit to show urgency. Also, don't limit your customers' choices. Combining products from different categories can be a great offer for seasonal products or specific target customer groups.
The likelihood of selling to an existing customer is much higher than selling products to new customers. Upselling is the practice of encouraging customers to buy a comparable, higher value product. So if you have a number of products in a same category but with different performance characteristics and prices, consider upselling to encourage existing customers to buy again.
Cross-selling means that a company sells an additional product or service to the current product that the customer has already opted for. Cross-selling refers to products that satisfy additional, complementary needs that are already met by the original item. Sounds familiar, right? Latori customer The Female Company demonstrates it well in the example above.
But what's the difference between cross-selling and upselling? Often the two terms are lumped together.
In e-commerce, cross-selling or upselling is often used on product pages, during the checkout process, and in campaigns. For example, on online stores, you'll usually see the "You might also like this" section filled with recommendations that match your preferences and search history. This is called automated cross-selling, which generates personalized offers for every customer who visits the store. The more you personalize the offer, the more effective your strategy - and therefore the increase in sales value - will be.
Many small businesses find success selling products and services as a package - also called a bundle. Customers equate a bundle of items with savings, even if those savings are small, making it easier for you to sell. For example, instead of selling three items for €30 each, your bundle priced at €75 would cost only €25 per item. If possible, try to keep your packages somewhat flexible; a potential customer might reject a package because they feel that only three of the six items are useful for their purposes. If you can remain flexible enough, or if customers can possibly make up their own packages, your chances of success are greater.
A few other tips you can consider:
For high-priced "subscribe and save" package deals, give customers the option to pay in installments.
Sell products both individually and in bundles. The ability to compare prices when they would buy products individually will make customers more likely to buy in a bundle.
Display the savings on the bundle page to make it easier for your customers to decide on a bundle.
#7 Create space for configurations.
Some online retailers take a particularly clever step and use product customization to increase their order value. Store visitors who are interested in a product are more likely to buy a high-priced product if they were able to help customize it to their liking. In addition to the fun effect of DIY, the argument of uniqueness is then also convincing. Because in the end, your customers receive a product that only exists once. Here you can offer e.g. photo prints or engravings.
#8 Quantity discount
A popular measure to increase the average order value is quantity discounts. These ensure that customers buy more items due to a discount. These can be advertised, for example, as follows: "This towel costs 9 euros. However, if you buy at least 3 towels, you can save 30%."
Latori customer ooia also relies on this proven method, offering free shipping and a 10% discount on five products.
#9 Customer loyalty program
A loyalty program can help you increase AOV if, for example, more points are spent above a certain minimum order value. If the loyalty program is designed in an appealing way, around 86% of consumers are willing to buy more products or services.
#10 coupons for the next purchase.
For example, offer your customers a $5 discount on their next purchase when they place a minimum order of $50. This measure not only ensures a higher average order value, but also recurring customers.
#11 Social Proof
According to a survey, around 88% of consumers are willing to spend more if items have been positively reviewed by other customers or if they are recommended by well-known people. So put your money where your mouth is on Instagram, TikTok, Facebook and co. Influencer marketing and user-generated content can help boost your social proof here.
#12 Return policy
Point out the return policy on product detail pages to help your customers make a purchase decision. This ensures that customers buy products even if they are not 100% sure.
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.
Reading tip: In this post, we reveal metrics for conversion rate optimization on Shopify.
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.
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.
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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.
Conclusion on AOV marketing
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.
We can help you increase your AOV on Shopify or Shopify Plus. Contact us and we will be happy to advise you.
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?
To increase your AOV, you can implement such measures as volume discounts, limited-time offers, cross-selling, upselling, loyalty programs, social proof, customizable products, and many more.
How much revenue is generated in online retailing?
In 2022, online retail sales in Germany amounted to around €90.4 billion. If we now assume around 461,640 online stores (extrapolation by the online service BuiltWith), the average turnover in online stores is around €195,000.