grow average order value

7 Sure-Shot Solutions to Grow Your Average Order Value on Shopify

The average order value is well-known as one of the most essential metrics for E-Commerce stores seeking to grow their profits and revenue. The big three of E-Commerce Optimization includes the Average Order Value, Customer Lifetime Value, and E-Commerce Conversion Rate. The AOV can be calculated by taking the total revenue over time and dividing it by the number of orders received and completed over that period.

Instead of winning over new customers, an online business can receive more value from their existing customers, which means that you can grow your business while saving up on advertising and marketing costs.

In this article, we’ll be sharing 7 sure-shot solutions that can help you grow average order value on Shopify.

What Is “Average Order Value?”

Average Order Value, also known as AOV, helps retailers understand the purchasing behaviors of their consumers and the amount that they are spending purchasing the products. An average order value tracks the average amount spent every time a customer purchases something from a business, which helps to determine each customer’s long-term value. 

Most corporations track their average order value monthly, but it can be tracked over any period. An increase in the average order value correlates to an online retailer’s increase in profit. If the retailer improves the AOV, the revenue and profit growth of that business can be improved.

1. The Audience’s Purchasing Behavior

Many people don’t like going to the grocery store when they are hungry; why? Because, when the hunger strikes, everything looks extra appetizing! Thus, customers end up purchasing more things than they initially planned on purchasing. This is why monitoring your audience’s needs, and their purchasing behaviour is essential, since knowing when they purchase more, and their purchase motivators can help grow the average order value of your online store. 

2. Customer Testimonials

Put yourself in a customer’s shoes and imagine that you are at a grocery store at a popcorn aisle; there are many brands to choose from, and you are confused. During this confusion, a customer comes in and chants, “Oh, there’s my favorite popcorn!” At that moment, there is an absolute chance that you will end up buying the same brand since it was endorsed by a fellow customer.

Word of Mouth is still ubiquitous, and people tend to trust their friends/families more than advertising. This is why you need to add customer testimonials to your Shopify store, as it can impact the AOV of your online brand.

3. Attractive Display

Again, imagine you are at a grocery store when you come across a brand’s attractive display. Salespeople are available nearby, handing out testers and explaining why you need that brand. The price might be high, but you’ve now seen how it can be used through the testers; thus, you are likely to put it in your shopping cart. 

Moreover, a catchier display means your customers would have a better time scrolling through your online store. This increases the amount of time they spend on your site, hence improving your chances of making a sale. 

Therefore, you need to make sure that your online store has an eye-catching display. For instance, vibrant color themes, UI design, and detailed product thumbnails, etc. Also, highlight the categories of “best-sellers,” “trending products,” “customer recommendations.” 

4. Bulk Selling and Cost Saving

Merchants can bulk sell necessary items on Shopify to grow average order value. For example, individually, a pair of socks are being sold for $5, but 6 pairs of socks are sold for $25; customers are likely to purchase the bundle since the price per piece is a bargain and helps them save.

Major Strategies to Grow Your Average Order Value On Shopify

1. Low Pricing Strategy

Often, customers, while browsing commodities online, make judgments about the prices of a product. You need to keep their psyche in mind and offer products at a low cost to grab their attention!

Low pricing strategy refers to selling merchandise at prices that grab the customers’ attention and draw them in so that they can shop thoroughly, knowing they don’t have to worry about the costs of the products. Low pricing strategy works since:

  • According to a report by Visual Website Optimizer in their eCommerce survey 2014, approximately 54% of online shoppers purchase the items in their abandoned cart if offered a lower price. 
  • According to a 2018 report published by statista.com, 63 percent of respondents stated that they had abandoned shopping carts due to the cost of shipping. 
  • Approximately 20% of the total E-Commerce traffic comes from price comparison shopping engines.

Making the low price strategy a part of your marketing strategy can improve the average order value on Shopify.

2. No Upselling Strategy 

Upselling is a technique that encourages the audience to add more to their initial order. For example, you go to a restaurant and order a regular milkshake; however, the person taking the order suggests you upsize your order, and you say yes! This is upselling. 

However, to increase your average order value on Shopify, a “No Upselling Strategy” is followed. The reason for no upselling strategy is that people often do not enjoy products/services being pushed to them when they have already committed to buying something. The upselling strategy can backfire since it can make customers feel unappreciated, annoyed, or bullied.

Generate Sales by Keeping the Suggestions Relevant

Ensure that the product you are trying to upsell is relevant to the products/services that the customer is purchasing. Make sure that you are not providing irrelevant suggestions by keeping the recommendations helpful. For example, instead of telling customers to purchase more pairs of shoes, Zappos suggests their customers purchase socks with them. Socks are a relevant purchase for anyone who buys a new pair of shoes; thus, Zappos keeps the suggestions relevant, which helps them to grow their average order value.

grow average order value

3. Ensuring Effective Follow-Up after a Sale 

It is cheaper for you to keep your customers than to find new ones. One of the most remarkable ways to retain customers is by ensuring effective follow-up after a sale; this helps decrease customer’s post-purchase dissonance

One of the most effective ways to follow-up after a sale is through follow-up emails. A personalized email can be sent to the customers a few days after their order to thank them for the purchase. This type of acknowledgment can help the audience feel good about their buying decision. You can also recommend complementary products that are relevant to their initial purchase and include customer reviews.

grow average order value

For example, Beard King follows the practice of sending personalized emails. They also offer new products every few weeks. The company also recommends relevant products and invites customers for sales promotions.

This can also be done by sending well-timed emails if the products you are selling are consumable, perishable, or need to be refreshed. This method is useful since you are sending the right message at the right time to the right person.

7 Quick Solutions to Grow Your Average Order Value

1. Create an Order Minimum For “Free Shipping” And Other Gifts

Incentivizing customers after they reach the minimum order value is a marvellous way to grow average value order quickly. One of the most common rewards of hitting the minimum cart value is providing free shipping. However, the online store needs to ensure that the minimum order value is not that high and the reward being awarded is worth the customer’s effort and money.

grow average order value

The stores can also facilitate gifting. For example, Estée Lauder offers gift sets if the customers purchase items worth $45.

grow average order value

2. Sell Bundled Products/Packages

Offering bundled products/packages at a relatively lower price than selling products individually at original prices can grow your AOV. However, keep in mind to not bundle random items together. Make a package of all the necessary components that customers are most likely to purchase together; this provides customers with an “all-in-one-solution.” For example, Kérastase Paris offers a hair care bundle, which includes a shampoo, blow-dry cream, hair mask, and nourishing serum.

grow average order value

Customers can also be enticed to create and customize their own bundles. For example, an online business, Rush Order Tees, allows customers to design their own T-shirts, sweatshirts, hoodies, and other clothing apparel.

grow average order value

3. Upsell Complementary Products

Upsell complementary products, but remember to offer products that are relevant and beneficial to the customers and are within their price range. A rule of thumb is that consumers are willing to spend an additional 30-40% of the amount that is currently in their cart. This can include related, suggested, or new items. 

Before upselling, remember to:

  • Suggest items that pair well with the product that your customer intends on purchasing (e.g., accessories). 
  • Offer items within the price range that the customer is comfortable in. For example, if someone purchases an item worth $50, do not try to sell them a product worth $50; instead, convince them to buy an item worth $15.

4. Promotion for Loyal Customers

To appreciate loyal customers and to make them come back to the stores, you can offer points, coins, rewards, and referral points to the customers. To redeem their points, the customers will revisit your store and repeat their purchases, which will help increase average order value and benefit your business. For example, Sephora has a beauty insider program for customers located in the United States and Canada that lets them earn points on their purchases. The accumulated points gained by loyal customers can then be redeemed for prizes.

customer award system

5. Effective Follow-Up After A Sale

The guilt or anxiety that people feel after a purchase is real. In marketing, the term is known as post-purchase dissonance. To decrease the effects of post-purchase dissonance, your store needs to follow-up after a sale and make the customers feel at ease by keeping in touch with them regarding the product and offering them free repair or an option to exchange the product. These tactics can make the customer feel good about their purchase, and they will continue to come back to your Shopify store again and again.

post-purchase dissonance

6. Pop-ups

Pop-ups might be annoying for many people, but they can be quite helpful for your store and can even increase email subscribers.

effective pop-up messages

There are many pop-up types to choose from:

  • Welcome Pop-up: It appears as soon as the customers visit an online store.
  • Exit Pop-up: This appears when the customer intends to leave a page. A deal or suggestion can be offered to interest the customers.
  • Behavior-Dependent Pop-up: This appears when the customer scrolls the page or clicks a button.
  • Almost There Pop-up: Appears when the customer has a certain amount of items in their cart. 
  • Abandoned Cart Pop-up: Appears to nudge users to close out the pending purchases in their cart.

7. Live Chat Option

Offering the customers access to instant customer support through live chat options to guide them regarding the products they intend on buying can lead to building a relationship with the said customer. It can also set your online store up nicely for positive word of mouth marketing. Having a live chat support system can help grow average order value as it offers exceptional customer service to the customers by providing fast solutions to their queries.

instant live chat support

Benefits of Understanding AOV

Average Order Value (AOV) helps retailers understand the psyche of their consumers and the amount that they are spending purchasing the products. An average order value can be impacted by the audience’s purchasing behavior, customer testimonials, attractive display, and cost-saving through bulk buying. 

The major ways to grow average order value on Shopify includes following the strategy of low pricing, no upselling, and ensuring effective follow-up after a sale. The quick solutions to growing the average order value on Shopify includes creating an order minimum for free shipping and other gifts, selling bundled products/packages, upselling complementary products, offering promotions for loyal customers, displaying pop-ups, following up after a sale, and offering a live chat support system.

Final Words

With the detailed information provided in this article, you hopefully understand what aspects of your site you need to work on to grow your average order value. All that’s left to do is to apply the knowledge you’ve learned to your own shopify store. 

If you have any questions about this topic, please leave a comment down below and we’ll get back to you. If you’d like to learn more about boosting your online store revenue, feel free to read more on HappyPoints’s blog. All the best!

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