Average Order Value (AOV) is the measure of how much money your customers spend each time they place an order through your online store. It’s a simple calculation (revenue ÷ number of orders = AOV) that can reveal a lot about your customers and your business during a specific time period.
Getting customers to buy multiple items and spend more money on each order is a great way to increase sales and revenue. Thus, online retailers that are able to increase average order value(AOV) should also become more profitable.
This statistic provides information on the average order value of U.S. online shopping orders from the second quarter of 2012 to the first quarter of 2016. During the most recent quarter, online orders which were placed from a desktop device had an average value of 75.9 U.S. dollars.
Why Focus on Increasing AOV?
To increase revenue and cash flow. Improving AOV is a great way to get healthy cash flow back into your store without having to spend a lot of money. In fact, you don’t need to worry if your store gets less traffic, you will have higher revenues due to increased AOV.
Tips to increase average order value
1. Product Bundles: Product bundling makes buying multiple items at once easy. Bundles often group a primary product and its accessories (such as a Mobile Phone that can be matched with Mobile case and a headphone etc); or products that are used for a similar purpose (such as a jacket, scarf and gloves).
2. Up-Sell and Cross-Sell:
- Up-Sell – Suggest a larger or more expensive version of a product a customer is viewing.
For example, If the customer is looking at your shoes, suggest a similarly styled shoes at a higher price point. - Cross-Sell – Suggest additional items related to the one your customer is viewing. For example, If the customer is looking at a mobile phone, recommend a matching case or screen guard of mobile phone.
3. Customer Rewards:
- Promotions/Discounts – Offer discounts for spending more money or buying additional items.
Or, offer valuable services such as free shipping when customers spend a certain amount.
- Rewards Points – Rewarding customers with points for spending more money on your site is a great
way to increase AOV while at the same time fostering customer loyalty. The more customers buy, the
more points they earn. Points can later be redeemed for discounts, free gifts, and other incentives.
4. Implement a free shipping: How frequently have you seen offers such as “free shipping when you spend over $49.99” when shopping online? It’s like a game against the total for online shoppers. They will keep throwing products into their cart until they reach the point where they gain free shipping. A win for your customers, and for you!
5. Easy Returns: One of the biggest concerns customers have about shopping online is whether or not they can return the items they purchase. If a customer thinks that returning something will be costly or difficult, he/she will buy fewer items to minimize their return risk. However, research shows that the more items customers buy, the more they actually keep (meaning they don’t return more items when the process is easy, they just want to know that easy returns are an option).
Conclusion
The strategies outlined here are all very different in how they get customers to increase the amount they spend in every order. Implement these strategies to your online and start noticing an increase in the average order value of your store.Thus this is the way to make more revenue with less traffic.
