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Written by Peter Boyle | June 2, 2016

The 6 Quickest Ways to Increase Average Order Values in Online Retail

We’ve gone over six tried and tested methods online retailers can use to increase average order values and get the quickest eCommerce revenue gains possible. 

The_6_Quickest_Ways_to_Increase_AOVs_in_Online_Retail.png

 

Every business, regardless of industry, has one primary goal:

 

To increase revenue.

 

Some believe that focusing on traffic levels, rates of engagement or even growing their list are the best paths to achieve this primary goal. And sure, these things are all important aspects of the greater sales funnel, but they’re not the most effective way of increasing the financial success of your business.

 

Why?

 

Because none of these top of funnel metrics directly correlate to your bottom line.

 

They’re sexy stats to be sure. Everyone wants to be able to say they’ve seen an X% increase in traffic, social shares or subscribers. But unless you’re seeing an increase in sales and revenue, they shouldn’t be your focus.

 

The one area most marketers overlook is also one of the most effective at increasing your businesses revenue gains. We are of course referring to average order value (AOV).

 

Why Increase Average Order Value?

 

Let’s think about traffic for a second.

 

Driving vast amounts of new traffic to your site isn’t easy or cheap. It’s going to cost a lot of man hours in the production of guest articles, targeted press releases etc or a substantial financial outlay for a PPC or advertising campaign.  

 

What’s more, the majority of the new traffic you attract isn’t going to convert. 99% of first time customers won’t purchase and 97% of overall online purchases are abandoned. All that extra traffic you’re driving doesn’t count for much if only 1% of them end up purchasing.

 

Engagement is great, but until comments, shares and reviews can be exchanged for cold, hard cash, engagement shouldn’t be your focus.

 

And then there’s the email list. It’s undoubtedly one of the most valuable assets an online business can create. But it’s only going to help your business if you’re consistently creating great content and compelling sales letters to send out to subscribers.

 

We’re not saying you shouldn’t aim to increase the above because they’re all valuable elements to your wider marketing plan. We’re saying that if you want to quickly see an increase in revenue, then AOV provides the easiest, quickest solution.

 

What makes increasing AOV such a great strategy? Here’s just a few reasons:

 

- You don’t need to optimise your funnel to convince new prospects to purchase

- It’s quick and simple. No lengthy research phases or complex marketing plans

- Helps secure your business against traffic dips

- AOV tactics have proven to generate up to 35% of large online retailer’s revenue

 

In this piece, we’ll outline seven methods that have proven to successfully increase AOV and should help increase the value of your business.

 

Free Shipping Thresholds

 

Giving anything away for free seems like a step in the wrong direction if you’re aiming to increase revenue.

 

Whilst shipping will often be the cheapest element to an order, offering it free for everyone could still make a large dent in your overall profits. However, if you work out your free shipping thresholds correctly you’ll offset the price of delivery and should see an increase in revenue.

 

For example. Let’s imagine the average order value for your site is £25 and delivery comes in at £5. You could prominently display a message for users who have spent around the £25 mark telling them that for another £10 they’re eligible for free delivery.

 

If the consumer takes your recommendation you’ll have increased your overall income for that order by £5.

 

Here’s an example of an effective delivery threshold implemented on the Ann Summers’ site.


Ann Summers eCommerce delivery threshold

 

The offer is well placed as it reminds consumers as soon as they add the item to their cart and once again when they’re ready to click the view bag/proceed to checkout.  

 

If you display how much more a consumer has to spend to qualify for free shipping while they’re browsing for products it will provide a smoother journey for the consumer.

 

You could also productise free shipping as Amazon has done with Prime.

 

For $10.99 a month or $99 per year your users can have unlimited free shipping.

 

Amazon prime free shipping

This is a great tactic offering two primary benefits:

1 - It’s great for you as many people won’t use over $99 of shipping throughout then year

2 - The free shipping acts as an incentive to get shoppers to return to your site at later dates

 

Shipping costs are one of the primary reasons customers abandon their purchases at the last minute. Offering free shipping not only increases the average order value, but can also stop shoppers from abandoning their purchase.

 

Discount Threshold

 

Discount thresholds work much in the same way as the free delivery threshold.

 

Once you know your margins you can offer a buy two get one free (or similar) offer to users to get them to spend more money in store.

 

It’s a tactic you’ll see everywhere from supermarkets to eCommerce and is literally everywhere in retail. Here’s a recent promotion from AT&T.

 

AT&T eCommerce discount threshold example

You want to sell as many items as possible. Unfortunately just straight up asking customers if they want to spend more money isn’t going to work. You need to sweeten the deal with something like a free item or discount should they spend X amount.

 

This incentive creates a win/win situation for both parties. You get a purchase you may otherwise have lost and the customer gets a freebie or discount with their purchase.

 

Cross and Upselling campaigns

 

Cross and upselling are two of the most overlooked methods for increasing revenue, which is a real shame considering how effective they can be.

 

Cross-selling offers a complementary product to shoppers based on their current cart contents. For example, offering a mouse or keyboard with the purchase of a new laptop.

 

Up selling aims to get customers to increase their spend by upgrading to a better product. You might recommend a 42” television to a customer who is currently looking at a 38”.

 

You’ve likely seen cross-selling on Amazon with their “frequently bought together” section.

 

Amazon cross-selling to increase AOVs

 

It’s a tried and true tactic which has been incredibly successful for Amazon and is reported to be responsible for 35% of their overall revenue.

 

Electronics retailers offer some of the best examples of upselling. They’ll display numerous products next to one another often in order of increasing value.

 

They’ll then go to great lengths to highlight the key benefits of the next model up to persuade consumers to upgrade their purchase. Here’s an example from Apple for the range of iPads.

 

Apple upselling to increase AOVs example

 

The explanations of each product continue below the screenshot and highlight the benefit of each model and make certain, more expensive models seem more desirable than others.

 

Both cross and upselling can be incredibly effective at increasing revenue if used well. You have to be careful when making product recommendations though or you risk losing the interest of your customers. If you’re thinking of implementing a cross or up selling campaign just remember the golden rules:

 

1 - Keep all recommendations relevant to the initial product

2 - Make the offers reasonable. No one’s going to pay £500 for a phone when they’ve purchased a £15 case (but they will the other way around)

3 - Only offer a few suggestions to avoid analysis paralysis

 

Bolt-Ons

 

Sometimes trying to get a customer to buy a whole separate product just isn’t going to work. In these cases you should examine whether you could offer a bolt on. A cheap, small item which adds more value to the initial purchase.

 

It’s something Moonpig does well just before sending you to the checkout.

 

Moonpig bolt-ons in eCommerce

They’ll offer very small products which, whilst not offering more value or use to the initial purchase as in a classic cross sell, turn a single gift into something of a selection basket.

 

Bundle It Up

 

Sometimes adding one or two complementary products isn’t enough.

 

Sure, those flowers would go well with that card and the window cleaning fluid is a good addition to the car wiper blades your consumer wants.

 

But for some products a single cross sell recommendation isn’t going to cut it.

 

This is when the bundle comes into effect. Sometimes your customer needs the whole set to get themselves up and running on the day of delivery.

 

For example, a pet store might sell puppy specific transport boxes, food, leads, chew toys and food and water bowls separately for £10 each.

 

When one is added to the cart the consumer is presented with an option to get the whole lot for £40 instead of £50. If they take the deal you’ve increased that order value from £10 to £40 and the customer has everything they need for a 20% discount.

 

Debenhams offer various bundle’s in their toy section. The below is a good example of how to offer numerous complementary products to complete the set.

 

Debenhams online retail bundle

Ask yourself if the products your consumers are checking out would be fine with a cross or up sell recommendation or whether you can really take the value you offer into overdrive by providing a bundle of times to help them solve their problem.

 

Always Display Cost Savings

 

If there’s something every consumer wants is to know exactly who much they’re saving.

 

Consumers want to feel as though they’re getting the best value for money possible with their purchase. Unfortunately, demonstrating value for money is easier said than done.

 

According to a study by the Journal of Marketing consumers find it difficult to identify the best deal. If you present a consumer with the option to receive 33% off the price of a product or pay the same but receive 33% more, consumers will invariably select to receive more. This is, unfortunately, the worst of the two deals.

 

Most consumers are unable to identify a good deal, even when it is literally handed to them. If there’s too mcc they have to figure out then they’re going to struggle to understand the full benefits which is a huge problem when it could be the difference between a purchase and them abandoning their cart.

 

To remove the chance of confusion you need to clearly outline exactly how much your consumer is saving. If you do

 

It’s a tactic takeout services have used to great effect. Check out the below example from Domino’s.

 
Dominos eCommerce basket savings

The customer is left in no doubt exactly how much they’re saving with this order.

 

Displaying the saved amount works to alleviate friction. However, if you couple this with the aforementioned discount threshold you should see a huge increase in AOV.

 

Customers, seeing how much they’ve already saved, will be more inclined to hit the next threshold to see their savings increase.

 

AOV is the Quickest Way to Revenue Increases

 

Increasing AOV is one of the fastest and most reliable ways to increase revenue - but you also need to consider how it’s affecting your customer experience.

 

By pushing too hard for higher AOVs you’ll end up turning customers away from your brand and straight into the arms of the competition.

 

While more money in the short-term is always a tantalising goal, remember that in the long run it’s your customer experience and service that will give you long-term recurring revenue.


The techniques we’ve outlined are all about between helping your customers find the right products while also raising your average order values - once you find this balance through testing, you’ll see both your revenues and customer satisfaction on the rise.

 

When you're looking to raise your average order values, an insight into your customers' psychology can prove helpful. Have a read of our blog, 5 Psychological Hacks to Increase Your Website's Conversion Rates for tips on how to get inside your customer's head.

 

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