As customer acquisition costs continue to rise, online retailers must squeeze more out of website traffic to drive revenue and influence conversions.
With innovative tools, optimised customer journeys and personalised content, online businesses can increase their average order value by persuading customers to spend more on their site. This means retailers can drive profits without the costly and time-consuming task of constantly attracting new customers.
Inspired by brick-and-mortar stores and optimised for eCommerce, the following strategies have been proven to increase average order values for retailers in all industries.
What is average order value and why is it important?
Average order value (AOV) measures the average amount each shopper spends per transaction on your site.
To calculate your business’s average order value, simply choose a period to evaluate and divide total revenue by total number of orders. Depending on your industry and products, average order value can vary greatly between businesses.
Measuring AOV enables retailers to track the performance of marketing strategies in line with overall business objectives, providing insight into customers’ purchasing habits and behaviour.
With a few strategic changes, you can maximise your average order value by personalising customer journeys and offering flexible payment options.
How to increase average order value
Integrating cross-selling and upselling strategies
The offline shopping experience is full of strategic influences to encourage customers to spend more, whether that be in-store displays or advice from sales assistants.
These upselling and cross-selling techniques can be replicated online by implementing Product Recommendations to inspire customers and connect them to their purchases quickly and efficiently.
Utilising AI and machine learning, Product Recommendations individually profile your customers and offer personalised suggestions throughout a browsing session and within site search to encourage linked sales, increasing AOV.
With an average conversion rate across our network of 6.09%, strategically placed Product Recommendations create a dynamic shopping experience, increasing customer engagement and producing a feeling of confidence in your business. This positive association with your brand results in a tendency towards higher average order values, driving revenue and optimising conversion rates.
Buy now, pay later
Allowing customers to buy now and pay later is a proven way of increasing AOV without the need to reduce prices or offer discounts.
Klarna’s payment options allow customers to pay later, pay in instalments or pay with finance. Since they are not required to pay immediately, customers are more inclined to purchase big-ticket items, or add more to their basket, and delay or split the payments.
Powered by intuitive exit intent technology, Behavioural Overlays can notify customers of a site’s Klarna integration at crucial moments in the user journey, working to reduce basket abandonment and convert visitors into customers.
With Klarna’s seamless payment integration, customers are offered a flexible and easy payment solution and businesses benefit from increased AOV.
Promoting a free delivery threshold
Whatever your business may sell, free delivery is a universally successful incentive.
Shipping costs can significantly impact a shopper’s intent to purchase, with nine out of ten shoppers citing free delivery as the biggest incentive to encourage them to shop online more.
To leverage free delivery in relation to increasing AOV, retailers can set a spending threshold. For example, if you know your current AOV is £54, consider adding a free delivery threshold of £65. This will encourage shoppers to add more to their baskets, which will work to drive an increase in your site’s AOV.
To ensure this incentive is effective, consider adding Behavioural Overlays at key moments in the user’s journey, such as if a shopper has items in their basket which total just below the threshold amount. This encourages customers to spend more on their order rather than pay for delivery, thus increasing AOV and driving conversions..
Introducing a loyalty programme
Loyalty schemes have been leveraged by retail stores and hospitality businesses for decades to retain customers. The success of these programmes has seamlessly transferred to the online environment, with many eCommerce retailers creating a community of loyal customers through strategic incentives.
With a points-based scheme, retailers can offer customers bonus points when they spend a certain amount in one transaction. With Behavioural Overlays communicating this promotion at crucial touchpoints, customers are encouraged to add more items to their baskets to benefit from the rewards they can unlock with their additional points.
Not only will this work to increase average order value, but customers with loyalty cards are also more likely to choose your site over a competitor’s when shopping online for products in your industry due to the incentive of increasing their points total.
If you’re looking to increase your average order value, take a look at our Product Recommendations and Behavioural Overlays, or contact a member of our team on 0204 505 9040 or email [email protected] for more information.