Learn proven tactics to increase average order value, boost revenue, and optimize your Shopify store.
You’re getting traffic. People are buying...but they're not buying much. It's like hosting a buffet and everyone's just picking at the appetizers. What should you do?
Increase average order value.
Average order value (AOV) is an important metric for any ecommerce website and one of the first KPIs that savvy business owners track.
Below, you’ll learn what average order value is and how to calculate it. Then, you’ll learn 17 proven tactics many top ecommerce brands use to increase it.
In the world of ecommerce, few key performance indicators (KPIs) are regarded as highly as Average Order Value. But, what is it, exactly? Average Order Value often referred to as AOV, is the average dollar amount spent by customers who place an order on your website.
To calculate average order value, divide Total Revenue by Total Orders. Say your online store generates total revenue of $2,000 in January. You notice there were 200 total orders during the same month. Using the formula above, you can calculate the AOV for your store to be exactly $10. ($2,000 / 200 = $10.)
Average order value is a key metric for evaluating the performance of your online store. It reveals your customer’s purchase behaviors and informs your pricing and advertising strategies. And when tracked on a daily or weekly basis, AOV can help you understand how effective your advertising campaigns are.
For an ecommerce brand, a higher AOV increases overall ROI and ROAS. It also correlates strongly with profitability. After all, you’re earning more from each customer without increasing your customer acquisition cost (CAC).
Typically, you have to spend on marketing and advertising to generate revenue. Spend money to make money, right? But here’s the thing: increasing average order value can boost revenue without needing to acquire new customers.
That’s money in the bank.
Average Order Value (AOV) plays a crucial role in shaping the marketing strategies of ecommerce businesses. For example, an online store selling guitar strings priced at $10, $15, and $20 with an AOV of $13 indicates that lower-priced items dominate sales and customers typically do not purchase multiple items.
By understanding these patterns through AOV, businesses can segment customers effectively and modify their strategies to encourage higher spending and increase AOV. However, it's important to remember that AOV only offers a partial picture of customer purchase behavior, so it should be complemented with other key ecommerce metrics to assess overall business health.
Analyzing the effectiveness of their pricing helps online businesses identify areas for improvement and make data-driven decisions to optimize their approach. This might involve testing various price points, discounts, and promotions to see how they influence AOV. In short, fine-tuning your pricing will help you increase your average order value and maximize revenue.
A deeper understanding of shopping habits allows brands to identify patterns and trends. Savvy ecommerce brands will use those trends to craft targeted strategies that not only boost AOV but also foster long-term revenue growth. For instance, studying purchasing habits can reveal opportunities for upselling and cross-selling. Additionally, segmenting audiences based on these insights enables businesses to tailor their marketing efforts, improve conversion rates, and drive higher AOV.
Several factors can impact AOV, including:
Pricing strategy: The prices of products and services offered by the business can significantly impact AOV. Higher prices can lead to higher AOV, but may also deter customers.
Product offerings: The types and quality of products offered by the business can influence AOV. Offering high-value or premium products can increase AOV.
Customer behavior: Customer behavior, such as purchasing habits and loyalty, can impact AOV. Loyal customers tend to spend more than new customers.
Marketing and pricing strategies: Effective marketing and pricing strategies can increase AOV by encouraging customers to spend more.
Free shipping thresholds: Offering free shipping on orders above a certain threshold can encourage customers to spend more to qualify for free shipping.
Customer loyalty: Building customer loyalty through loyalty programs and rewards can increase AOV by encouraging customers to make repeat purchases.
We're starting with this one because it can improve the efficacy of many tactics on this list. For example, cross-selling a new product will lead to disappoint if the product page is disorganized, the messaging isn't clear, or the images are blurry. So, audit your product detail pages to make sure the UX is sound and they're telling the right story. After all, the product detail page is often where buying decisions are. Here are few tips to optimize your product detail pages.
While upselling and cross-selling are different, they have a similar goal: Increase average order value. Use cross-selling to show shoppers complementary products that go along with their purchase. Use upselling to promote a more expensive version or a subscription. Using both will capitalize on customers’ ‘buy now’ mentality and encourages customers to spend more.
Cross-sells and upsells are more profitable when they’re driven by customer data. So, use your store’s historical customer and sales data to place personalized product recommendations in the shopping cart. Another best practice is to add them to a ‘customers also bought’ or ‘most popular’ section on your site. (Like Free Fly Apparel does below). This helps your customers discover popular products they may not have seen otherwise.
Personalized recommendations can significantly enhance customer lifetime value by encouraging repeat purchases and increasing average order value. Ecommerce brands employ these strategies to drive sales and turn casual shoppers into repeat customers.
New product launches give you the opportunity to create a "marketing moment" through various channels such as social media, email marketing, and influencer partnerships to generate buzz and anticipation.
Look at Au Vodka. They used new flavor launches to draw high-intent customers to their shop. Then, they used other tactics on this list (like smart merchandising and dynamic bundles) to cross-sell other flavors and accessories, encouraging shoppers to buy multiple products. The result? Au Vodka's average order value for Rebuy-assisted purchases jumped by over 20%.
By effectively launching a new product, you can capture the attention of potential customers, increase brand visibility, drive higher sales and increase average order value.
If there's any product you should promote like crazy, it might just be your top sellers. They already perform well, so why not spread the word? Au Vodka and OLLY both promote top-selling products right there on the homepage. Why should you try it? Take it from OLLY, who used a homepage carousel featuring top sellers to generate 14% of its total Rebuy-assisted revenue.
Optimizing shipping speeds and costs is critical for increasing your average order value (AOV). Offering fast and affordable shipping options can encourage customers to make larger purchases, thereby boosting AOV. Additionally, optimizing shipping can reduce cart abandonment rates and enhance customer satisfaction.
By analyzing customer shipping preferences and behavior, businesses can identify opportunities to refine their shipping strategy. This might include offering free shipping, expedited shipping options, and flexible delivery schedules. By optimizing shipping speeds and costs, Shopify stores can increase AOV and generate more revenue.
Here's something you already knew: Customers love free shipping. (A lot!) If you want a higher average order value, offering free shipping when a shopper meets a minimum purchase amount is a good way to get it. A UPS survey found that 52% of shoppers bought more just to qualify for free shipping. Give it a try and see how high your AOV can go.
Offering short-term discount codes or coupons create a sense of urgency and typically results in shoppers adding items to their cart. Offer additional savings such as free shipping or discounts on future purchases as part of the promotion, which encourages customers to take advantage of these deals. Using effective marketing and pricing strategies can further enhance these promotions to maximize revenue from each customer transaction.
Most shoppers tend to feel guilty when making large purchases. However, you can maintain a high AOV by showing customers how much they’re saving per item. Making them feel like they’re getting a good deal on large orders reduces the chance that they’ll remove items or abandon their cart. Do it right and you'll see customers purchasing multiple units and increasing the average dollar amount spent per order.
Product bundles (package deals) can quickly increase average order value. That’s one reason they’re a favorite promotion among brands like home and kitchen brand Avera. Dynamic bundles helped Avera increase average order value by 12%. (And in case you missed it, product bundles are favorite tactic of Shopify’s Stephanie Hault.)
Offering customers a ‘buy two get one free’ promo or a 25% discount on a t-shirt and pants bundle encourages people to buy more while saving money. Calculating average order values can show how such promotions boost sales without increasing return rates.
Entice existing customers to spend more by offering a GWP when they spend over a certain amount. This will encourage your shoppers to increase their order value so they receive the gift. It’s also a great way to build customer loyalty and even manage your inventory (buy X, get Y).
Additionally, GWP can significantly enhance customer lifetime value by encouraging repeat purchases and fostering long-term loyalty. GWP offers really shine when placed in the shopping cart. They also make great post-purchase offers.
Ecommerce stores can benefit from establishing a loyalty program, as it not only keeps customers loyal but also helps increase average order value. Forty-three percent of customers spend more on brands they’re loyal to, so offering a 5% discount or free shipping to loyalty program members encourages them to make repeat purchases.
The majority of shoppers (72%) will buy products after reading positive customer reviews. For ecommerce stores, highlighting reviews (like star ratings and testimonials) boosts trust, encouraging more spending due to higher perceived value.
Here's the thing about social proof: it works pretty much everywhere. Drop things like testimonials, trust badges, and star ratings on you website, social media, product pages, checkout pages, you get the picture. Learn more about how to use social proof to build trust in ecommerce. (link: https://www.rebuyengine.com/blog/social-proof)
Liquid Death adds social proof via star ratings to every cross-sell.
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Checkout pages don’t have to be the end of the shopping journey. With Rebuy’s Checkout Extensions, you can turn your checkout page into an AOV booster. (Learn how to optimize your Shopify checkout page with Rebuy.) Recommend high-margin items, exclusive discounts, and “last chance” offers. The checkout page is also a great place to move excess inventory. Have a look at more tips to increase average order value on the checkout page.
This hot tip comes from Jonathan and Daniel Snow from The Snow Agency. They offer a creative way to increase AOV: Add educational messaging directly into the shopping cart that highlights the benefit of adding the second SKU and encourages customers to consider additional purchases. In this case, The Snow Agency saw an increase to AOV of 110% simply by adding a Pro Tip to the cart!
Test out this Pro Tip in your cart and see if you get similar results. We'd love to hear about it.
In the meantime, check out Jonathan Snow's original Twitter thread.
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Ready for a non-obvious way to increase average order value? Try personalized follow-up emails. By sending targeted emails to customers after a purchase, ecommerce stores can encourage additional purchases and boost AOV. These emails can feature recommendations for related products, special offers, and loyalty rewards.
Leveraging data on customer purchasing habits and preferences allows businesses to tailor follow-up emails to specific segments, increasing the chances of conversion and driving higher AOV and total revenue. Additionally, personalized follow-up emails help build customer loyalty and retention.
💡Pro Tip: Use Rebuy's integration for Klaviyo to personalize your merchandising to your Klaviyo Segments.
Gamify the cart experience with a tiered progress bar. It's an effective way to motivate shoppers to add an extra item (or two) to their order (thus increasing average order value). How does it work? By showing the shopper how close they are to receiving a free gift. And who doesn't love a good freebie, hmm?
If you want to see a tiered progress bar in action, here's how Swiss startup feey used Rebuy Smart Cart equipped with a tiered progress bar to increase average order value by over 20%.
Your store’s AOV tells you a lot about how your store is performing. It also reveals a lot about your customers—including their purchase behaviors and which sales and marketing strategies they respond to. With a little planning and consistent calibration, you can increase your average order value, boost total revenue, and turn more shoppers into loyal customers.
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