How to Optimize for AOV
Average Order Value (AOV) is an important metric for ecommerce businesses, as it measures the average amount that customers spend per transaction.
Increasing your Average Order Value (AOV) is essentially hitting the jackpot for your ecommerce business. It’s not just about selling more products, but it’s also about selling them at a higher price point. Think about it like this, if you have a store that sells $25 shirts and your average customer buys one shirt for $25, but you can encourage them to upgrade to 2 shirts for $50, you just made an extra $25 off that one customer. Now imagine doing that with hundreds or thousands of customers – the numbers start to add up.
It’s not just about the extra revenue though, increasing AOV can also lead to other significant benefits for your business. It’s a fact: if your customer is spending more per transaction, they’re less likely to abandon their cart and more likely to become loyal repeat customers. Additionally, with a higher AOV, you can afford to offer incentives like free shipping or discounts, which can also encourage customers to spend more.
Essentially it comes down to this – if you want to drive more revenue, you have two options: increasing your customer base or increasing the amount they spend. While it’s important to have a steady stream of new customers, it’s also crucial to focus on increasing the amount they spend per transaction. And that’s where AOV comes in.
Now, what should your AOV goal be?
The average AOV across ecommerce varies depending on the industry and the type of products being sold. According to industry reports, the average AOV for ecommerce businesses is around $75 to $100. However, this can vary greatly depending on the type of products being sold. Businesses that sell luxury goods or high-priced items have a higher AOV, while businesses that sell lower-priced items may have a lower AOV.
Here are some tips from ecommerce industry experts on how to optimize for AOV:
Cross-selling and upselling: One of the most effective ways to increase AOV is to offer related or complementary products to customers. This can be done by cross-selling, which is the practice of suggesting similar products to customers, or upselling, which is the practice of suggesting higher-priced or upgraded versions of the product. For example, if a customer is buying a new phone, you could offer them a protective case or a screen protector as a cross-sell, or offer them an extended warranty as an upsell.
Free shipping threshold: Offering free shipping can be a powerful incentive for customers to increase their order value. However, it is important to set a threshold for free shipping that is high enough to cover your shipping costs, but low enough to be achievable for most customers. For example, if you set the threshold at $50, customers will be more likely to add more products to their cart in order to qualify for free shipping.
Bundle products: Bundling products together can also be an effective way to increase AOV. For example, if you sell clothing, you could offer customers a discount on a complete outfit or a set of products that complement each other. This not only increases the order value, but it also makes the customer’s shopping experience easier and more convenient.
Optimize checkout: The checkout process is one of the most critical stages of the customer journey, and it is essential to make sure that it is as smooth and user-friendly as possible. This includes reducing the number of steps required to complete the checkout process, making sure that the process is mobile-friendly, and providing clear and detailed information about the products and shipping options.
Personalization: Personalization can play an important role in increasing AOV. You can use customer data, browsing history, and purchase history to create personalized product recommendations, messaging, and offers. This will increase the chances of customers buying more products and increase the average order value.
Optimize for SEO: Search engine optimization (SEO) can help you increase the visibility and credibility of your ecommerce store. Make sure that your website is optimized for relevant keywords, and that you have a strong backlink profile. This will help you drive more organic traffic to your website and increase the chances of customers making a purchase.
Optimizing for AOV is essential for increasing revenue and profits for ecommerce businesses. By using strategies such as cross-selling and upselling, offering free shipping, bundle products, using retargeting, optimizing checkout, personalization, and optimizing for SEO, you can increase the average order value and boost your sales.
Working with ecommerce industry experts can also help you to understand the best practices and latest trends in AOV optimization and apply them to your business.
