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11 Ways to Boost Your E-commerce Average Order Value

September 2, 2024

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When it comes to growing revenue in the e-commerce world, Average Order Value or AOV is a metric businesses can't afford to ignore. In the subscription eCommerce business, everyone strives to maximize their profits, Your existing subscriber base is a gold mine that is waiting to be tapped. 

This blog dives into the definition of Average Order Value (AOV) and ways a shopify business can improve its AOV and encourage customers to buy more. 

What is the Average order value? 

For DTC businesses, understanding Average Order Value is the key, AOV simply means the average amount a customer spends per purchase. Finding your website's average order value is easy, Just divide your total sales by the number of orders. For example, imagine you sold $20,000 worth of stuff last month across 500 orders. In that case, your AOV would be $40 per order (20,000 / 500).

Why is AOV important? 

If you want to generate more revenue from your eCommerce business you can start by focusing on increasing your Average Order Value.

Here's why it's crucial for your eCommerce business:

  • Boost Revenue: A higher AOV means you can grow your business without constantly acquiring new customers, saving you money on marketing campaigns.
  • Understand Your Customers Better: Understand customer behavior by tracking AOV. You can identify customer buying patterns and create strategies to encourage them to spend more per purchase.
  • Maximize Profits: A higher AOV translates to more money coming in without additional expenses on customer service, marketing efforts, or delivery. This leads to increased profitability for your business.

In short, AOV empowers you to leverage your existing customer traffic more effectively. By focusing on AOV optimization, you can unlock significant growth potential for your eCommerce business.

How to increase Average order value: Tips and tricks

By successfully tracking your AOV, you will be able to create strategies that will drive value from your products. By prioritizing this metric, you can optimize your marketing efforts and campaigns, gain valuable customer insights and achieve sustainable growth for your business. 

1. Offer a Free Shipping

Imagine your store has an AOV of $1000, and you aim to increase it by 30%. You introduce free shipping on orders above $99. Most customers dislike paying for shipping, with 85% preferring free shipping over fast shipping. By setting a higher free shipping threshold, you can encourage customers to spend more.

Example: Dr Livingood encourages customers to buy products worth 99$ to avail of free shipping, successfully increasing their AOV. Check out their experience here

2. Discounts and Bundle Deals

Bundling products together encourages customers towards a higher AOV but also makes sure the customers get a good value.

Example: LilacSt offers a starter kit, which includes a customized selection of lashes, a bond of customers' choice, and their must-have accessories. This bundle retails for 65$ with products worth $124 when sold separately. 

3. Personalization

A good way of engaging customers and encouraging them to return is through personalization. You can giverewards to customers/subscribers and incentivize for longer subscriptions.

Example: Evereden gives personalized mini products to their subscribers on their upcoming orders and incentivises them for longer subscriptions.

4. Time-Sensitive Offers

Starting a time-sensitive offer or a sale is a good way to create some sense of urgency and trigger customers' FOMO (fear of missing out), prompting them to quicker and larger purchases. 

FOMO (fear of missing out), prompting them to quicker and larger purchases.

Example: Forever21's end-of-season sales are a perfect example of using time-bound sales to boost AOV.

5. Cross-sell and Upsell

This is a smart way for eCommerce businesses to increase AOV by convincing existing customers or subscribers to upgrade or add products to their current orders. 

Example: Pane Vivo, a French bakery, increased their AOV to 10% by activating the Upsell feature in the customer portal, where subscribers could easily add a one-time purchase or another subscription to their ongoing subscription.

Learn how Loop Subscriptions provides a powerful upsell section that offers powerful upsell/cross-sell options with granular customizations to drive revenue and provide value to the customers here.

6. Reward Loyal Customers

Loyalty programs create a system where customers are often rewarded for continuing purchases with the brand. Implementing a loyalty program encourages repeat purchases increasing the AOV through higher spending by customers. 

Example: CampusProtein gives a free Blender Bottle on the second subscription order. They also give free Carnitine on the 6th subscription order- Keeps loyal subscribers engaged.

This level of subscriber reward automation can be easily done with Loop Flows. Read how they set up this automation inside Loop Flows

7. Custom Bundle Builder

Allowing customers to create their bundles can enhance personalization and satisfaction.

Example: LilacSt offers build your own bundle option to their customers where they can have 4 to 18+ lashes in their bundle, there is a discount system in place where the price per lash decreases as the more lashes you add in your bundle. 

8. Post-Purchase Upselling

When a customer makes a purchase, they've already invested some of their mental energy in the decision-making process. They're more likely to be receptive to related items because they've already overcome the initial hurdle of saying "yes" to a purchase.

By offering and placing complementary items during checkout or immediately after purchase, customers save the time and effort of searching for those items later. This creates a smoother shopping experience and reduces buying friction.

9. Leverage Reviews

The psychology surrounding social proof suggests that people are more likely to trust something if others have approved of it. Brands should leverage positive customer reviews to build their potential customers trust and confidence.

Example: Osea showcases customer ratings and awards on product pages, increasing AOV through enhanced credibility.

10. Personalized Email Campaigns

Focus on personalized emails to make your customers feel valued and understood. When a brand sends an email specifically curated for the customer, rather than a generic email, it fosters a positive brand experience and builds customer loyalty. 

11. Flexible Return Policies

To make your customers feel more confident in their purchase offer easy returns and exchanges. A flexible return policy enhances customer experience and encourages repeat purchases. A negative return experience can turn a potentially satisfied customer into a disloyal advocate. The return process provides an opportunity to introduce new products to the customers or suggest complementary products. Another way to cross-sell or upsell products is by offering store credits or exchanges along with refunds.

Analytical Approach to AOV

Gather and review sales data, order value, product categories, customer demographics, and purchase frequency. Analyze the average order value for different customer segments in various product categories or bundles. Later, evaluate the impact of promotional offers to study customer buying patterns, including cart abandonment rates, upselling/cross-selling success rates, and the average number of items per order. This will help identify opportunities to influence customer behavior and increase AOV.

By analyzing these data points you can introduce higher-priced products, experiment with different pricing strategies, Implement upselling and cross-selling techniques and tailor marketing efforts. By continuous monitoring and optimization, you can ensure a more profitable and sustainable business model.

Wrapping up

Ready to Increase your AOV? Loop Subscriptions can help. Learn how we've helped countless brands boost their Average Order Value by clicking here

Want to see how Loop Subscriptions can revolutionize your business? Request a demo to discover our comprehensive suite of tools for increasing customer lifetime value.

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Written by
Emma Johnson
Head of Marketing

Emma Johnson is celebrated for her strategic brilliance and innovative flair. By seamlessly blending creativity with data-driven insights, she has propelled Loop’s brand to new heights, establishing it as a formidable force in the Shopify Subscriptions space.