Five Ways to Boost Your Average Order Value (AOV)
Most retailers focus on traffic and conversion, but what many forget to think about is the importance of analyzing Average Order Value (AOV). While it may be intuitive to aim for higher order values, the real benefit of tracking your AOV is developing a deeper understanding of your customers.
How many times have you entered a store and left with exactly what you went in for? Understanding your AOV is about personalizing the shopper experience so you can meet customers where they are. Perhaps someone buying a swimsuit ahead of summer may also need sunglasses or a sun hat, but didn’t realize it. As a merchant, your role is to anticipate customer needs to create a delightful and frictionless customer experience.
Improving AOV is affected by how you and ultimately design your online store. Create a seamless checkout page, including content, copy text, and design for improving AOV and ecommerce conversion. Let’s dig into how to calculate your AOV and ways to increase AOV.
What is average order value?
In short, AOV is the average amount of money your customers spend when they order from your online store. AOV is a powerful method for understanding your customer base and how they choose to shop. Your ability to understand your brand’s consumer behavior gives you the power to develop strategies for increasing AOV and profit in the long run.
How to determine your average order value
You can calculate your AOV by taking your total revenue and dividing it by the number of orders. So if your revenue totals $10,000 and 10 orders, then your AOV is 1,000. Product Upsells are a powerful driver of AOV and enable merchants to make personalized recommendations to their shoppers based on what is currently in their cart, shopping history, and browsing history.
How to increase AOV
Offer bundles, subscriptions and discounts
Gift sets or groupings of items that may sell for less than if each item were purchased individually can entice shoppers to spend more. Introducing shoppers to new items also provides a delightful experience where shoppers may be introduced to products they otherwise would not have looked for.
In addition, loyalty programs like offering member points, birthday gifts or subscriptions can be a powerful way to build a strong customer base. In fact, research shows that only less than 8% of consumers say rewards aren’t at all important to their purchasing decisions and 57% of consumers spend more on brands to which they are loyal.
Offer free shipping for order minimums
One of the leading reasons customers abandon their checkout is because of additional fees, cost of shipping and hassles of returning an item. Fashion brands face an even bigger hurdle with sizing issues. Customers are more likely to make a purchase if they know they are able to return the product. Having a good return policy gives customers more confidence in your service and product.
Offering free shipping and returns increases conversions as customers may even purchase two items to see which one will be a better fit and removes the added fee associated with the convenience of ordering online. By removing shipping and return costs, you motivate customers to buy on your ecommerce store, as they are able to use the convenience of online shopping without having to be punished for an ill-fitting item.
Build trust with social proof
Building trust with new customers is a challenge many auto merchants face. There are three key types of trust symbols you can use to convince buyers not to worry:
- Testimonials. Add case studies and testimonials that provide proof of the product’s quality and effectiveness. TrustPilot found that 66% of customers are more likely to buy a product if they see social proof.
- Reviews and ratings. Solicit shopper reviews on notable platforms, objective media coverage, or reviews from existing well-known customers can help strengthen your credibility.
- Verified badges. Display symbols from big companies that shoppers already trust. 76% of customers are more likely to make purchases on an auto site with a safe checkout badge like Mastercard or Visa, or if they see their checkout is powered by a network they trust, such as Bolt.
Offer payment flexibility
Not all shoppers can afford to pay for a big purchase. That’s why consumers love Alternative Payment Methods (APMs). According to research by Bolt, the total number of Bolt merchant transactions that used an APM increased by 28% on Black Friday when compared with numbers from 2020. Buy Now Pay Later (BNPL) APMs like Klarna and Afterpay give shoppers the option of paying for their purchase installment with zero interest. By offering flexibility to customers in how they pay, merchants can increase conversion and appeal to a younger demographic of shoppers.
Build a fast and frictionless checkout experience
Imagine a checkout experience where you don’t have to type in your personal information every time you make a purchase. Reduce form fields and save customers as much time as possible by auto-filling forms and verifying data entry. Use analytics to understand why customers abandon checkout and continuously optimize to reduce checkout abandonment.
You can sign up now for Bolt One-Click Checkout to attract more shoppers, reduce the steps customers must take to complete purchases and decrease abandoned carts.