5 Tips to Increase the Average Order Value (AOV) in Your Online Shop

Increasing the average order value of your online shop should be the goal of any e-commerce business. In today’s article, we’ll look at different ways to get your customers to spend more at your shop with plenty of examples.

What is the Average Order Value (AOV)?

The average order value (AOV) is the average amount of money spent by your customers per checkout. Some people refer to this as the average basket value or average cart value. In this article, we will refer to this number as the average order value.

How to calculate the Average Order Value (AOV)?

Many shop software solutions already calculate this number for you. However, in case you want to do it manually, the formula is quite simple. Simply divide the total revenue by the number of orders for the given time frame.

Average Order Value (AOV) = total revenue / the total number of orders

Now that we know what the average order value is and how to calculate it, let’s look at some actions you can take to boost that AOV:

Offer a reward based on a minimum order value

You can offer several types of rewards in your shop based on a minimum order value. Let's start with the most popular:

Free shipping

Free shipping can be a sensitive topic for many shop owners because shipping costs are often necessary to remain profitable.

However, if you know the average order value for all your customers, you can create a “free shipping threshold” that is a little above the AOV. For example, if the average order value in your shop is €34.50, you can make the threshold for free shipping €40.

Small reminders like the one in the image below motivate the buyer to add more products to the cart. In fact, according to a study from Statista, 68% of consumers are more likely to buy a product online when they are offered free delivery.

A free product

Whether it’s a set product, a surprise, or a choice, offering a product for free after reaching a minimum order value encourages the shopper to add more products to the cart.

Ideally, you are giving your customer gifts that complement the product they added to their basket. For example, if you sell shoes, you could give them some insoles. If you sell coffee, offer a free mug.

In the example above, the online shop Pienso y Mascotas offers a free gift if the customer selects the 10kg bag instead of the 2kg bag on their product page.

Discounts

Offering discounts after reaching a minimum order value is also a very effective strategy.

For example, volume discounts (3 for the price of 2) are very popular with retailers. Naturally, you can adjust this offer to your preferences.

Source: Wilton Wholefoods

Another option is to offer a discount on the next purchase after a minimum order value. This way, you incentivise your customers to come back to your shop. Of course, it is up to you to decide what kind of discount you want to apply.

Make sure that your discount is visible at all times. For example, you could place it in a dedicated section in the shopping cart, just like in the following example.

On the checkout page from Lamp and Light, the discounts are highlighted multiple times. Each product in the cart displays the original and the discounted price. Then, in the summary (on the right side), you can see the total discount on your order.

Note: There is also a small reminder (“Order today before 18:00, shipped today!"), which adds a little extra motivation to complete the order.

Additionally, this shop also uses pop-ups to cross-sell complementary products (more on cross-selling later). What's noteworthy is that the discounts are very prominent here as well.

Integrate a loyalty programme

Loyalty programmes are more of a strategy to increase the average cart value in the long run. One of the most popular loyalty programmes is the points programme.

Companies implement this type of programme to encourage their customers to make more purchases in exchange for an incentive once they have accumulated a certain number of points.

For example, every time a customer spends €5 on a purchase, they accumulate 1 point. As soon as they have accumulated 20 points, they can redeem the discounts they’ve earned. In addition, your customers could also receive points for other actions such as subscribing to the newsletter or reviewing the products they've purchased.

Source: Swanky Pins

By awarding your customers points that they can exchange for discounts or rewards, you will not only increase the average cart value but also increase loyalty to your brand.

Recommended reading:
What Kind of Loyalty and Rewards Systems Work for Small Businesses?

Create a sense of urgency and scarcity

Limited-time offers are a great way to create a sense of urgency for shoppers. If you also include a countdown, users will feel the need to get your products as soon as possible.

This type of offer is ideal for increasing your seasonal sales (Black Friday, Christmas, Valentine's Day, etc.). 

Make sure you present your limited-time offers at all stages of your customer's shopping journey (e.g. homepage, product pages, checkout, etc.).

In the example below, you’ll see Party Bags and Supplies dedicates the header of their homepage (and all their product pages) to promote Halloween.

Similarly, if you communicate the number of units left in stock, you could generate a sense of scarcity and therefore trigger the same fear of loss as with limited-time offers, prompting the consumer to purchase.

You can indicate the number of units available in your cross-selling and upselling strategy as well, which brings us to our next tip.

Upselling & cross-selling

Another relatively easy and effective way to boost your average order value is to implement upselling and cross-selling strategies. Many shop software companies like Shopify and Magento offer such features either natively or within their app store.

Source: Shutterstock/Surasak_Ch

It is a popular selling method used by many shops, including Amazon. As a seller, you probably already know that when marketplaces implement these techniques, it might lead the user to buy other products from other sellers. Implementing this system into your own online shop, however, could really benefit your business.

We’ve covered the basics in our upselling and cross-selling article, but let’s review some of the concepts again here:

Upselling

With upselling, your shop will try to get the shopper to choose a higher quality (i.e. more expensive) version of the product they are considering purchasing.

Down-selling is also a possibility here, but for the sake of this article, we'll just focus on upselling.

Here is a simple example of upselling: If a shopper is looking at a 36” television, the aim of upselling is to get them to spend more and purchase the 42” model (or a better 36” model than they are considering).

The most common place to see upselling in action is towards the bottom of a product page. There, you will often see a section titled “Other products shoppers looked at” or something similar. The user will then see a few other similar products.

In the example below, the product page for a jacket on Alpine Trek has a dedicated section to promote other jackets once the user scrolls down far enough:

Cross-selling

Cross-selling works in a similar way to upselling. Instead of convincing the user to purchase a better (more expensive) product, you will try to sell them complementary products.

Here is a simple example of cross-selling: if the shopper is looking at hiking boots, you might suggest a high-quality socks or a water-proof solution to protect their new boots after they've added the product to their basket (like in the pop-up we mentioned earlier).

You’ve certainly seen cross-selling in action before. Think of those product pages that say “Products often purchases together”. Additionally, you can even bundle some of your products together here and offer that to shoppers as well.

Cross-selling often occurs in a few more places than upselling. Along with product pages, cross-selling can also happen in the checkout process. This serves the user as a kind of reminder that they may need additional products that work together with their upcoming purchase (e.g. spare batteries for a camera).

In the example below, you’ll see a product page for a necklace from Corazon Latino. The section labelled “Complete the set” is a great example of cross-selling complementary products (i.e. a matching bracelet and set of earrings). If you scroll down a bit further, you’ll also see examples of upselling (i.e. other necklaces).

Whether you upsell or cross-sell, it can also be quite useful to include star ratings for suggested products. This brings us to our next point: trust.

Communicate your trustworthiness

Earning a customer’s trust is a good way to get them to purchase (and purchase more!) from you. However, for first time shoppers, it can be challenging for them to gauge your trustworthiness. That is why it is up to you, the online shop, to communicate your trustworthiness.

We touched on product reviews in our last tip. It’s important to remember that product reviews should be displayed wherever your products are, not just in upselling and cross-selling sections.

On top of product reviews, you’ll want to prove your trustworthiness as a shop/service provider (e.g. delivery and customer service). Therefore, service reviews (aka shop reviews, seller ratings) should also be displayed throughout your site, including your homepage.

It’s worth mentioning some stats here. According to the Digital Trust Report:

• Positive online reviews were the most convincing factor to complete a first-time purchase in an online shop (66%).
• 90% of Europeans agree that genuine reviews increase trust in a company.
• 79% of respondents read reviews every time or most of the time before making a purchase.

You can read more from the Digital Trust Report, a survey of over 700 European consumers, by downloading the PDF here:

If you promote your products in Google (i.e. Google Ads or Google Shopping), it’s best to work with a Google-certified reviews provider in order for your star ratings to be displayed in the ad, a proven click-booster. Remember, your online reputation extends beyond your website.

Offering certifications or guarantees is another way to boost trust among new shoppers. For certifications, this can depend on the industry you work in and the niche you’re targeting (e.g. Fairtrade, Vegan, etc.). However, when it comes to guarantees and protections, this is helpful for any industry. The Trusted Shops 30-day Buyer Protection helps to build trust in a brand instantly.

This product page on Dotty Fish displays product reviews while the widget offers users a Buyer Protection and shows off the shop’s service rating.

There are plenty of other things you can do to build trust in your online shop. This can be done subtly, like including your contact info throughout the website, which can put suspicious shoppers at ease. Provide multiple ways to get in touch with you, including your phone number, email address, social media channels, or a contact form.

Let users get insights into your shop with an insightful About Us page. Frequent social media posts that give users a behind-the-scenes look at who runs your business can also build trust with new and returning shoppers.

Bonus tip: Offer additional services

This may also depend on your niche and industry, but think of other services you can offer that may boost the average order value.

For example, you can offer a gift-wrapping service, which may be quite helpful during the holidays.

If you sell electronics, you might want to offer additional/extended warranties or protection plans.

Can your products be customised? Offer an extra service to embroider or etch a name or a message onto your products.

Conclusion

There are many things you can do to boost the average order value in your shop. Some of these strategies can be started today and some require more planning for long-term benefits and customer loyalty. Either way, take action today and see your AOVs gradually grow.

This article was originally written and published in the Spanish market: 5 consejos para aumentar el valor medio del carrito de compra