7.2 Creative Ways to Boost Average Order Value of Your eCommerce Store
As an eCommerce store owner, you want to maximize your revenues and get the maximum out of it. You have been making heroic efforts to improve your conversion rate, you have been bleeding money to rank higher on Google, you have used every paid service to drive more traffic to your store but all these efforts gave very negligible or not expected returns, we know it, most of the eCommerce store owners have faced it. What if I tell you that there is a way supplementing the efforts you are making to boost your revenue and improve your conversion rate. Most of us know it, have used it but are still unaware of how powerful it can be. It is increasing your Average Order value (AOV). According to 2015 eCommerce growth benchmarks by RJMetrics top performing eCommerce retailers have 36% higher AOV than that of others.
Before we go deeper on how to increase Average Order Value (AOV), let us understand what does AOV mean.
It is the amount of money each customer ends up spending per order. It can be calculated with the help of a simple formula.
Total revenue / Number Of Orders = Average Order Value
Some of the Old Sure Shot ways to boost AOV :
- Cross Sell
- Free Shipping above a specified amounts
- Bundled Products
- Cash back offers
- Finance Options
- Cash Discount above a specific Price/Quantity
We have used these tactics to grow our revenue and boost the AOV but there is a limit to which these tactics work. We want to get on the top and start competing with the top performing sites. So, we have compiled 7.2 creative ways to boost AOV for your store.
1. First Time bundle offers
This is one of the parts of startup strategies where a customer gets a discount on their first purchase. This helps in giving a boost to AOV from the start. As the customer gets more benefit from their first order, they will try to purchase maximum they can to get the maximum benefit. Crafera does a great job by hitting first time customers with 20% Off. It is also helpful in creating a positive image in the minds of customers.
2. A Deals Section
Everyone is looking for a deal or sale to save money, having a deals page on your store will stimulate a customer to purchase more and more. It also makes customers coming back to your looking for deals and grabs them. For example, Modern Contempo - an online furniture store has clearly highlighted its deals section to catch the attention of its visitors.
At the end of the day, customer gets the benefit by saving money and the store owner gets the benefit by an increase in AOV.
3. Personalized Product Recommendations
Showing personalized product recommendations can be an effective way to increase AOV. Customers love personal touch, be it a name on the email or the ability to personalize website according to their wish. By providing personalized product recommendations, you can show the most relevant products to the customers on multiple touch points in the purchase cycle. A personalized product recommendation isn’t based on guess or assumption; it is based on the historical data of the user. When talking about personalized product recommendations one can never miss Amazon, Amazon is doing a great job personalizing their product recommendations.
4. Loyalty Programs
If you sell consumable products which a customer needs to repurchase, you can set up a loyalty program by giving in store credits. It depends on you, how well you design your loyalty programs, you can give your customers credit points of your shop if they buy something above a specified quantity. You can give free credit points to your customers in such a way that it induces them to purchase additional products with those credit points. You can also give them free credit points if they add products above a specific amount in their cart. For example, If a customer adds products worth 100$ in their cart. Free credit points worth 10$ is added in their cart which can be used to buy more products. Credit Points will be applied only when they check out and not if they abandon their cart. In the same way, sign up discount coupons can be given to customers which can also help in increasing AOV. Pepperfry gives Rs. 10,000 coupons divided between different categories when a customer shops above a specific limit.
5. Social Proof
We are humans and we don’t trust easily. So how can you expect a customer to buy anything from you when they know nothing about your store? This lack of trust can be substituted by other customers who have provided a review. For example, GiveandStyle has used Testimonials from their reputed partners to gain the trust of their customers which is a clever move.
90% of customers say reviews from other customers have impacted their buying decision. The influence of others will eventually make your customer spend more. Bazaarvoice notes that the AOV of customers who read reviews is 6% higher than of those who don’t. You need to have a working and user-friendly review system for your website. Ask for the reviews from your customers, send them a mail and use all other marketing tactics to get reviews from your customers because it’s your old customers who your new customers will trust.
You probably might have heard of the word Gamification by now and have participated knowingly or unknowingly in it. Gamification is the application of the concepts of game thinking and game mechanics in the form of credit points, badges or similar incentives. This technique not only helps in retaining the customer but also in increasing the AOV.
For Example, As an eCommerce Store, you can set up a rewarding system based on total amount of purchase: “a customer will be allowed to participate in a particular game (say, spin the wheel) or will get a lucky draw coupon which assures a minimum prize and can also lead to a 100% discount” or something like this. A customer will be able to take benefit of this offer on the checkout page after spending a minimum amount say 100$. This way a customer will spend more in order to get more benefits. Gamification can be clubbed with other tactics to use it effectively.
One of the latest and the coolest example of Gamification is by Indian eCommerce giant Flipkart. Flipkart announced a Big Billion Day game in which they rewarded Rs. 100 vouchers to 3000 lucky winners. They even had a game on Instagram, yes you read it right on INSTAGRAM. Flipkart created a dozen of accounts, made some high-quality pictures and turned it into a game. They led users from one picture to other by tapping on the accounts tagged and at last to the final destination. This really gave a boost to the engagement rate and obviously to the AOV.
7. Use of Scarcity
Scarcity creates time pressure and time pressure creates a sense of urgency and it stimulates customers to buy more in one order. We often come across ‘limited time offer’ in the malls and yes we do shop more. Why not apply this on your store ?
7.1 Limited Number of Products
I will try not sounding like my Economics Professor; the demand of a product is high when the supply is short. Yes, the product is always in high demand when it is scarce. Scarcity works because it forces action.
7.2 Limited Time Offers
One of the best trending examples of the use of scarcity concept is of Groupon, it always has something or the other in the limited time offer and most of the good deals ends in 24 hours. Groupon has used scarcity as a core business strategy
Amazon is also an early adopter of scarcity concepts with its Deals of the Day.
Do’s and Dont’s
- Do A/B test all these strategies to find out which one works for you the best.
- Use a combination of these strategies to take the most out of it.
- Do the math before you implement any of these strategies by striking out a balance between discounts and profits.
- Don’t go away without leaving a comment below and also share if you have implemented any new creative strategy other than these.
At Emipro, we have eCommerce experts having a great industry experience to help you with all your technical and non-technical worries related to eCommerce. Contact us if you want to implement these strategies or if you need any kind of advice on eCommerce. We would love to hear from you.
Being an emerging leader in IT market since 2011, Emipro Technologies Pvt. Ltd. has been providing a wide range of business solutions in Odoo & Magento. We are pleased to have a large pool of contented customers with our meticulous work in the domain of ERP & e-Commerce. Our customers are companies of all sizes ranging from startups to large enterprises who realize that they need a professional internet solution to generate revenue streams, establish proper communication channels, to achieve desired goals and streamline business operations. [....] Read More