The Secrets To Higher Sales: Increasing AOV for Businesses

Digital Marketing / February 24, 2023

E-commerce has become a highly competitive industry, and one of the key metrics that online retailers track is the average order value (AOV). A high AOV indicates that customers are purchasing more items and spending more money per transaction, which is crucial for boosting profits. 

In this blog, we’ll explore four effective strategies to boost total order value on your website and generate sales with renewed vigour.

1. Cross-selling and Up-selling

Cross-selling involves recommending related products to customers, while up-selling involves suggesting higher-end or upgraded versions of the products they are already interested in. 

Both strategies can be effectively executed either alone or combined through product recommendations, personalized email campaigns, and targeted advertising.

There are many ways to go about cross selling and up selling, but some of the most effective are as follows:

1. Personalize the experience: Personalization can increase conversion rates and improve customer satisfaction. By recommending products that align with a customer’s interests or previous purchases, you can offer a more tailored shopping experience.
2. Use clear and attractive graphics: Make sure that the products you are cross-selling are displayed clearly and attractively. High-quality images, detailed product descriptions and customer reviews can help consumers make informed purchasing decisions.
3. Show relevant products: Display products that complement the item a customer is currently viewing. For example, if someone is looking at a camera, you could suggest accessories like memory cards, tripods, and camera bags.

A company notorious for the display of relevant products is Amazon. As customers use the website, Amazon curates a selection of products they think you would enjoy based on your browsing history. For example, after searching for health supplements on Amazon and sportswear, the recommended products were also fitness-related accessories that go hand in hand with previously searched for products. 

If you think your brand could use some extra exposure, Bloom offers Amazon ads management services , a highly effective method to gain massive exposure on one of the most globally frequented websites. Contact us for more information.

2. Offer Bundles and Packages

Offering bundles and packages ties in with up-selling, and can help increase the AOV in several ways:

1. Increased perceived value: By offering bundled products, customers perceive that they are getting a better deal than purchasing items individually. This can lead to higher order values and an increase in overall sales.

2. Convenience: Bundling products together can also provide convenience to customers. They are able to purchase everything they need in one transaction, rather than having to make multiple purchases.

By offering bundle and package deals, businesses can provide customers with a sense of value and convenience, both of which can contribute to an increase in AOV. If you haven’t already curated product bundles on your website, what’re you waiting for!

3. Free Shipping Threshold

Implementing a free shipping threshold can help increase AOV for the following reasons:

1. Encourages larger purchases: By offering free shipping for orders over a certain value, customers are encouraged to purchase more items to reach the threshold and take advantage of the free shipping offer. 
2. Provides an incentive to buy: Offering free shipping can be a strong incentive for customers to make a purchase. It can make the overall cost of the purchase more attractive, especially for customers who were previously on the fence about making a purchase. Since shipping is free, they’ll feel better about spending the extra money on products instead.
3. Increases profitability: Implementing a free shipping threshold can also help businesses increase their profitability by offsetting the cost of shipping. By requiring customers to purchase more items to reach the free shipping threshold, businesses can reduce their shipping costs while still providing a valuable benefit to customers, making it a win-win situation. 

Shown here is one example of how H&M uses a free shipping threshold to encourage larger purchases and offset the cost of shipping. In addition, to have access to free delivery, H&M requires its customers to become H&M members. This way, they are able to accumulate more information about these customers and reuse their personal data to improve the performance of other tactics like online advertisements and email marketing.

As a rule of thumb, experts have suggested setting a free shipping threshold roughly 30% higher than the AOV. The goal of this is to make free shipping attainable to the most customers possible, otherwise retailers may risk missing out on sales and having many shopping carts abandoned online. 

For context, using that strategy, this would mean that H&M’s AOV is roughly in the $28 range, if their free shipping threshold is set at $40 and they set their threshold 30% higher than AOV.

By implementing a free shipping threshold, businesses can incentivize customers to make larger purchases, and increase profitability.

4. Create Urgency

Last, but definitely not least, comes creating a sense of urgency. This technique has been repeatedly proven to work through tactics such as limited-time promotions, countdown timers, and stock alerts. These can encourage customers to purchase more items or make a purchase more quickly, leading to a higher average order value.

Many brands, such as fast fashion retailer Shein, use the urgency tactic to generate sales, as can be seen here.

However, it’s important to use urgency tactics responsibly, and to not create a false sense of urgency that could harm customer trust and satisfaction in the long run. Customers will call a bluff and stop taking brands seriously when they constantly have limited time sales or stock alerts.

In conclusion, consistently trying to increase total order value is crucial for the success of any e-commerce business. By using strategies such as cross-selling, up-selling, offering bundles and packages, and creating urgency, e-commerce marketers can boost the AOV and drive more revenue for their businesses.

After learning about increasing AOV, if you feel as if you could use a hand getting started in the right direction, Bloom offers a full range of services aiming to help you get the most out of your e-commerce website and maximize sales. Contact us for more information, or view our services page here for more information.