{"id":71684,"date":"2024-04-12T15:00:44","date_gmt":"2024-04-12T07:00:44","guid":{"rendered":"https:\/\/www.hongkiat.com\/blog\/?p=71684"},"modified":"2024-04-08T17:39:21","modified_gmt":"2024-04-08T09:39:21","slug":"increase-low-average-order-value","status":"publish","type":"post","link":"https:\/\/www.hongkiat.com\/blog\/increase-low-average-order-value\/","title":{"rendered":"4 Strategies to Increase Low Average Order Value (AOV) in E-commerce"},"content":{"rendered":"<p>Dealing with a consistent stream of low-priced orders can be quite frustrating. This situation means the revenue per transaction is low, which hurts the bottom line and business growth.<\/p>\n<figure><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.hongkiat.com\/uploads\/increase-low-average-order-value\/hero.jpg\" alt=\"Increase Low Average Order Value\" width=\"1600\" height=\"900\"><\/figure>\n<p>Could it be because of lackluster offers, or is there some hidden reason influencing shoppers not to fill up their carts with more products?<\/p>\n<p>Many stores miss out on potential earnings by not adequately incentivizing customers who have already shown an interest in their brand. Or perhaps they attempt to do so but leave a lot of money on the table.<\/p>\n<p>It\u2019s essential to implement strategies to increase the average order value (AOV), which is the average value of all your sales transactions.<\/p>\n<h2>Factors Contributing to Low AOV<\/h2>\n<p>Let\u2019s take the example of the famous <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/us.dollarshaveclub.com\/\">Dollar Shave Club<\/a>, which skyrocketed to success by promoting one-dollar razor blades.<\/p>\n<p>Undoubtedly, they had great marketing from the very beginning on all fronts, such as creating winning video ads, which are still showcased as a shining example.<\/p>\n<p>However, their business wouldn\u2019t have survived by selling one-dollar blades alone, not even at scale. The average order value (AOV) would have been way too low to make it a profitable venture. Their major profits come from other products, as they offer a range of men\u2019s care products from electric trimmers and razors to shower gels and deodorants.<\/p>\n<p>You should similarly think about your store. Shoppers may come in for one enticing offer, possibly priced lower, but end up loving your brand and purchasing more than they originally planned.<\/p>\n<p>To increase average order value, there are a few key things to consider:<\/p>\n<ul>\n<li><strong>Pricing Strategies<\/strong> \u2013 Although they depend on the market and your ideal customer persona for whom the product is made, you still have control over many factors such as minimum order requirements, bundling, discounts, tiered pricing, cross-selling, and discount strategies. Be careful with discounts. If people see discounted offers too frequently, they may never purchase products at the normal price.<\/li>\n<li><strong>Product Assortment<\/strong> \u2013 Shoppers appreciate having a variety of options. Only if the website is difficult to navigate and customers feel overwhelmed by the abundance of products, could it pose a hurdle. To increase average order value (AOV), the product assortment must be well organized, especially with complementary products available for cross-selling.<\/li>\n<li><strong>Customer Behavior<\/strong> \u2013 You need to understand deeply how your customers buy. How do they come to your website? Is it from social media or Google? <strong>The behavior of visitors<\/strong> on your website can be easily monitored. By analyzing their user\u2019s journey, you\u2019ll be able to pinpoint hurdles and what stops them from buying more.<\/li>\n<li><strong>Industry Dynamics<\/strong> \u2013 Purchasing patterns and AOV depend on the industry you\u2019re in, so it\u2019s beneficial to understand AOV standards to gauge where you stand among the competition.<\/li>\n<\/ul>\n<h2>Strategies for Increasing Low Average Order Value<\/h2>\n<p>Here are successful strategies to implement to increase low AOV.<\/p>\n<h3>1. Product Bundling<\/h3>\n<p>To ensure success, package products that complement each other or make sense together, and offer them at a discounted price.<\/p>\n<p>For instance, you can pair shower gel with body lotion and deodorant, as these items are commonly used together.<\/p>\n<p>Additionally, consider creating themed bundles for special occasions like Christmas or Valentine\u2019s Day, or invent your own themes like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/us.jimmylion.com\/\">Jimmy Lion<\/a>, a renowned sock brand, has done with gift packs such as the <em>Dog Day Pack<\/em>, <em>Cat Night Pack<\/em>, and <em>Frida Kahlo Pack<\/em>.<\/p>\n<figure><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.hongkiat.com\/uploads\/increase-low-average-order-value\/jimmy-lion-socks-bundle.jpg\" alt=\"Jimmy Lion socks bundle\" width=\"1344\" height=\"636\"><\/figure>\n<div class=\"sue-icon-text su-image-caption\" data-url=\"\" data-target=\"self\" style=\"min-height:34px;padding-left:36px;color:#333333\">\n<div class=\"sue-icon-text-icon\" style=\"color:#333333;font-size:24px;width:24px;height:24px\"><i class=\"sui sui-photo\" style=\"font-size:24px;color:#333333\"><\/i><\/div>\n<div class=\"sue-icon-text-content su-u-trim\" style=\"color:#333333\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/us.jimmylion.com\/collections\/sock-packs\">Jimmylion<\/a><\/div>\n<div style=\"clear:both;height:0\"><\/div>\n<\/div>\n<p>Another effective tactic is to combine a bestseller with items that aren\u2019t selling as well, thus facilitating the sale of accumulated stock. In addition to discounts, consider adding an exclusive item that\u2019s otherwise unavailable to make the bundle more appealing.<\/p>\n<p>Furthermore, you can combine variations of the same product, like the socks mentioned above. This strategy works particularly well in industries like cosmetics or food, where scents and tastes are easy to combine.<\/p>\n<p>However, ensure that your bundles present clear benefits to the customer without causing confusion or hurting the brand image.<\/p>\n<h3>2. Upselling and Cross-Selling<\/h3>\n<p>These two terms refer to techniques we employ when shoppers browse your website or during the checkout process.<\/p>\n<p>Upselling involves convincing the customer to purchase a more expensive item or a higher-tier option than what they originally intended.<\/p>\n<p>There are various methods for upselling. In practical terms, we also call it upselling when we offer shoppers a bundle instead of an individual product. Often, an upsell involves a package deal. With stackable products like razor blades, toothpaste, or supplements, offering more of the same at a discount is an effective strategy.<\/p>\n<p>For example, the bone broth brand <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/broyaliving.com\/\">Broya<\/a> upsells by offering different quantities on the product page. In addition to providing options for 5, 8, 16, or 24 pouches in a variety pack, they show how many servings you get with each option. This increases the perceived value for customers.<\/p>\n<figure><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.hongkiat.com\/uploads\/increase-low-average-order-value\/broya-upselling.jpg\" alt=\"Broya upselling\" width=\"1337\" height=\"637\"><\/figure>\n<div class=\"sue-icon-text su-image-caption\" data-url=\"\" data-target=\"self\" style=\"min-height:34px;padding-left:36px;color:#333333\">\n<div class=\"sue-icon-text-icon\" style=\"color:#333333;font-size:24px;width:24px;height:24px\"><i class=\"sui sui-photo\" style=\"font-size:24px;color:#333333\"><\/i><\/div>\n<div class=\"sue-icon-text-content su-u-trim\" style=\"color:#333333\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/broyaliving.com\/products\/variety-pack?selling_plan=20398112986&variant=44026533806298\">BroyaLiving<\/a><\/div>\n<div style=\"clear:both;height:0\"><\/div>\n<\/div>\n<p>Now, let\u2019s consider an example of cross-selling, a technique aimed at selling complementary products.<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/byloftie.com\/\">Loftie<\/a>, a brand specializing in items that enhance the sleeping experience, employs a cross-selling technique. When you add their alarm clock to your cart, they also offer you a sleep mask.<\/p>\n<figure><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.hongkiat.com\/uploads\/increase-low-average-order-value\/loftie-alarm-mask.jpg\" alt=\"Loftie alarm mask\" width=\"1300\" height=\"598\"><\/figure>\n<p><small>Credit: <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/byloftie.com\/collections\/shop\">ByLoftie<\/a><\/small><\/p>\n<p>Since a sleep mask is significantly cheaper compared to an alarm clock, it appears inexpensive. This perception stems from comparing one item to another, leading to a psychological effect where we perceive the mask as cheaper than if we were considering it on its own.<\/p>\n<p>The key to success lies in personalization. Offer something relevant, such as items frequently bought together. Otherwise, recommend your best sellers, especially if you have not yet collected extensive purchase history data.<\/p>\n<h3>3. Free Shipping Thresholds and Incentives<\/h3>\n<p>Shipping fees are the most common reason why shoppers abandon their carts. At least <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/baymard.com\/lists\/cart-abandonment-rate\">48% of cart abandonments<\/a> happen because extra costs like shipping and fees are too high. No other reason for cart abandonment reaches such a high rate.<\/p>\n<p>Determining a free shipping threshold requires careful planning and analysis of profit margins. There are several approaches to consider.<\/p>\n<p>Some stores decide to include shipping costs in the product price by raising it. However, if your average order value (AOV) tends to be low, the free shipping threshold should be set at least around 30% higher. The objective is to incrementally raise the bar for free shipping but not to scare away customers at the same time.<\/p>\n<p>Show shoppers both a visual and numerical representation of how much more they need to spend to reach the minimum order amount for free shipping. This method has proven highly effective in motivating them to make additional purchases.<\/p>\n<figure><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.hongkiat.com\/uploads\/increase-low-average-order-value\/olipop-freeshipping.jpg\" alt=\"Olipop free shipping\" width=\"1158\" height=\"570\"><\/figure>\n<div class=\"sue-icon-text su-image-caption\" data-url=\"\" data-target=\"self\" style=\"min-height:34px;padding-left:36px;color:#333333\">\n<div class=\"sue-icon-text-icon\" style=\"color:#333333;font-size:24px;width:24px;height:24px\"><i class=\"sui sui-photo\" style=\"font-size:24px;color:#333333\"><\/i><\/div>\n<div class=\"sue-icon-text-content su-u-trim\" style=\"color:#333333\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/drinkolipop.com\/products\/tropical-punch\">drinkolipop<\/a><\/div>\n<div style=\"clear:both;height:0\"><\/div>\n<\/div>\n<p>Finally, combining free shipping with incentives such as signing up for a loyalty program or membership can further raise the appeal. We\u2019ll delve into these strategies in more detail below.<\/p>\n<h3>4. Customer Loyalty Programs and Memberships<\/h3>\n<p>Acquiring a new customer typically costs five times more than retaining an existing one. Repeat customers are your most valuable asset. Let\u2019s examine this through the lens of the Pareto principle.<\/p>\n<p>The <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/en.wikipedia.org\/wiki\/Pareto_principle\">Pareto principle<\/a>, or the 80\/20 rule, suggests that 80% of outcomes result from 20% of causes. Applied to e-commerce, this implies that a significant portion of revenue or profits comes from a small fraction of customers.<\/p>\n<p>In other words, if you have this core 20% of customers who are enthusiastic about your products and keep coming back, it forms a strong foundation for business growth without major retention challenges.<\/p>\n<p>The first step is to create loyalty or membership subscriptions. Apart from offering discounts, some brands take it a step further. Take, for example, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.potgang.co.uk\/\">Pot Gang<\/a>, a UK brand specializing in gardening gear.<\/p>\n<p>It\u2019s not just their watering cans that have excited people about the brand.<\/p>\n<p>They offer a unique membership subscription where members receive a monthly box with seeds, pots, and everything a beginner needs to start growing veggies and herbs.<\/p>\n<figure><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.hongkiat.com\/uploads\/increase-low-average-order-value\/pot-gang-membership.jpg\" alt=\"Pot Gang membership\" width=\"1328\" height=\"634\"><\/figure>\n<div class=\"sue-icon-text su-image-caption\" data-url=\"\" data-target=\"self\" style=\"min-height:34px;padding-left:36px;color:#333333\">\n<div class=\"sue-icon-text-icon\" style=\"color:#333333;font-size:24px;width:24px;height:24px\"><i class=\"sui sui-photo\" style=\"font-size:24px;color:#333333\"><\/i><\/div>\n<div class=\"sue-icon-text-content su-u-trim\" style=\"color:#333333\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.potgang.co.uk\/products\/the-box\">Pot Gang<\/a><\/div>\n<div style=\"clear:both;height:0\"><\/div>\n<\/div>\n<p>Each month, subscribers receive different seeds with pots to grow seasonal plants. It\u2019s not solely about selling gear, but rather about creating a <em>\u2018gang\u2019<\/em> of gardeners and guiding them step by step on their gardening journey.<\/p>\n<p>Loyalty programs and memberships not only increase customer lifetime value but also average order value. For instance, a customer who subscribes to toothpaste is more likely to purchase a toothbrush and dental floss as well.<\/p>\n<h2>Conclusion<\/h2>\n<p>We\u2019ve outlined four reliable strategies for boosting the average order value in e-commerce stores. Numerous factors influence a shopper\u2019s journey. By systematically approaching and understanding purchasing signals and patterns, you can significantly enhance revenue per transaction and grow your business.<\/p>\n<p>If people have already visited your website, they\u2019re interested in and need what you offer. This presents the ideal opportunity to capture their attention, encourage them to purchase additional products, and guide them through a seamless checkout process.<\/p>","protected":false},"excerpt":{"rendered":"<p>Dealing with a consistent stream of low-priced orders can be quite frustrating. This situation means the revenue per transaction is low, which hurts the bottom line and business growth. Could it be because of lackluster offers, or is there some hidden reason influencing shoppers not to fill up their carts with more products? Many stores&hellip;<\/p>\n","protected":false},"author":649,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3411],"tags":[],"topic":[],"class_list":["entry-content","is-maxi"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.8 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>4 Strategies to Increase Low Average Order Value (AOV) in E-commerce - Hongkiat<\/title>\n<meta name=\"description\" content=\"Dealing with a consistent stream of low-priced orders can be quite frustrating. 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