Raising the average order value of your store is an effective way to increase revenue. Shopify provides a simple formula for determining a store's AOV: Simply divide the total revenue by the number of purchases. The resulting number is the average amount consumers spend each time they complete a transaction with your online store. In order to raise this value, try following these four tips:
1. Bundle matching items
Bundling takes items of a related nature – a pet collar, toys and kibble, for instance – and sells them together for a cheaper price than the sum of each individual item. According to Shopify, this makes e-commerce consumers feel like they're getting a better deal and increases the order's perceived transaction value. VWO recommended bundling as a good way to promote items that tend to be low sellers. A store can offer customers the chance to customize their bundles or provide ready-made solutions.
2. Discounts based on volume
Many consumers prefer to buy items in bulk as opposed to making frequent small purchases. Offering a volume discount can encourage consumers to buy larger quantities; they may make fewer purchases, but the ones they do complete will raise your store's AOV. According to Practical Ecommerce, this method works best with items that are perishable or have a limited use.
3. Offer free shipping at an established minimum value
Free shipping can be a great incentive for customers to complete a purchase, and setting a minimum for free shipping helps your company raise the store's average order value. For instance, a customer may have an order total of $68 and, upon checkout, see that a minimum purchase of $75 will eliminate the cost of shipping. A report by RJMetrics found there's a 40 percent chance this customer will purchase more items to make up the $7.00 difference. Practical Ecommerce suggested promoting free shipping offers on every page of your e-commerce site, especially during checkout.
4. Offer multiple payment options
Internet Retailer reported that by offering an alternate form of online payment, Bare Necessities was able to increase the average order value of certain promotional orders by 3 percent. Provide consumers multiple payment options – such as direct debit or a debit card – to allow them to make purchases via whatever method they prefer. Also, remember to think internationally and make sure your store can accept global payments.
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