9 Proven Methods To Increase Order Value
In a highly competitive ecommerce world where $2.86 trillion in ecommerce sales occurred in 2018, retailers can’t afford to say no to any prospective sale. Staying ahead of your rivals is smart business, and there are some proven methods you can use along the way to do it.
The reality is that running your online store requires that you are always thinking outside of the box. All retailers should look for ways they can increase average order values on the sales that their customers are making. After all, more sales equals more profits.
The following nine proven methods can help you increase average order value in a short matter of time.
1.) Offer a Free Shipping Threshold
One of the best tactics that you can use to increase average order value is to offer a free shipping threshold. Here’s how they work. Free shipping is offered on purchases that exceed a certain dollar amount, most commonly $50 or higher. When customers add enough items to the shopping cart to reach this threshold, they save money on shipping cost but end up spending more at your store.
In a study by UPS, it was found that 52% of consumers would add one or more items to a shopping cart in order to qualify for free shipping, if the perceived value of the items encouraged them to close the sale.
With more than 65% of cart abandonment rates being directly linked to the cost of shipping, or free shipping not being an option, a free shipping threshold not only incentivizes customers to make the purchase, but also increases average order value by upping the order amount needed to qualify for free shipping. It’s a win-win.
Free shipping thresholds aren’t the end-all, be-all for every store. But, a little tinkering and A/B testing can help you determine whether or not this tactic will work for yours. Consider using testing tools like Apptimize, a cross-platform A/B testing tool, or VWO, a conversion optimization cloud-based solution to find out for sure.
Both tools provide tremendous insight and data on your visitors, how they interact with your site and what steps they take along the way to conversion or abandonment. Using this data, you can make key changes that impact your bottom line and increase average order value at your online store.
2.) Liquidate Inventory with Sales
If you have a lot of dead stock that you are sitting on, you can always try to increase the average order value by offering clearance sales. Studies have found that liquidation for companies going out of business was a very effective method of consolidation; something that can also be applied to companies that are still in business.
Put into perspective, as it relates to your online store, you can feature a “clearance” section as well as prominently advertise to customers, site-wide, that said clearance items are being offered at a special sales price.
You can take things a step further by mandating a minimum order value on clearance items. Top it off with free shipping being offered on that minimum order threshold and you will have the recipe for moving volume while maximizing profit margins and reducing inventory carryover or bloat.
3.) Feature Time Sensitive Sales
One of the largest contributing reasons for shopping cart abandonment is that many shoppers want to take their time with making a purchasing decision. This is especially true when the product that they are considering is of a higher value.
By offering time sensitive special deals, you can get shoppers to close the sale more often than not, advises Entrepreneur Magazine. Consider adding this method to your consortium of advertising methods to increase average order value.
Take a look at the screenshot below from Gardeners Supply Company. They’re featuring a time sensitive sale that encourages users to take advantage of a limited-time offer to save up 85% off the normal price. They create a sense of urgency for this sale to increase average order value by informing shoppers: “This sale will be over before you know it!”
4.) Offer Discounts On Volume
Bulk discounts can help you get more sales. Online office supply retailer Paperstone put this study to the test, which was covered by VMO. They found that when volume discounts were offered, they were able to increase average order value by 18.94%. What’s more, revenue also increased by a healthy 16.85%.
Naturally, assure that your profit margins have some wiggle room in them before you go full speed ahead with this type of a bulk discount offering. While bulk volume discounts may not be on the radar for all online retailers, they are something that many midsize and enterprise retailers can consider offering.
Take a look at the bottom line on the products you’re selling. For popular items, like gift items, impulse purchases, and high markup ratio products, it may be viable to consider adding a bulk pricing discount of 10% off or more, especially during flash sales and seasonal events to help move more inventory out the door.
Home Depot (see screenshot below) is already capitalizing on this by reaching out to online shoppers with a dedicated bulk discount section at their online store. It gives registered shoppers sizable savings on bulk purchases when they place them online through this special portal.
When properly integrated, you can upsell to increase average order value. But, the thing is that customers don’t want to feel like they are being asked to buy something more expensive. To counter this common human reaction to upselling, you can be more subtle in your approach.
A good example of upselling in motion is with this shopping cart example (below) from a premier travel site. Note how they incorporate related, value-added options that customers can also buy, all that are of innate interest to the customer, and all that increase the order value substantially.
If you are looking to upsell, make sure you do it intelligently. The experts at Kissmetrics advise that you cater the options for upselling to assure that they are directly related to the specific consumer interest, based upon their shopping preferences. A variety of automated upsell integrations exist for ecommerce that you should also explore.
Another vetted method for increasing the average order value is via the art of cross-selling. The CPSA offers a variety of helpful tips on cross-selling that can really give you a head start.
Assure that any items you are cross-selling are directly related to the product that the consumer already has in their shopping cart. A quick search on Google can yield you a variety of apps or plugins that you can use to maximize your cross-selling.
As you can see from the screenshot of a Ritz Camera product page (below), the user is presented with several usable cross-sell items that will augment the purchase they are considering making of a new camera.
In this particular instance, the store is suggesting that they consider adding a tripod and 2-stop filter to the purchase. When cross-sells make sense, they are proven to increase average order value.
8.) Offer Bundles & Packages
A timeless method of increasing the average order value is found via offering customers bundled deals. A hot-selling item this holiday season happens to be the Xbox One gaming system, which many retailers are packaging into bundles that include a few games or accessories to boost sales. According to Forbes, doing so can improve your order value exponentially and help you move more inventory in the process.
Take for example this Xbox One bundle (pictured below). Prospective customers are offered a unique value proposition that includes a high-tech and upgraded Xbox 1 that also comes with a popular game for this console. Note that the seller is also offering free shipping to sweeten the deal.
It’s unique bundles like this that help online retailers stay ahead of the curve. This is especially true when it comes to competing against other online retailers in the technology and electronics areas, where competition is fierce and where most consumers have local options they can consider as well, in this case: Best Buy, Target and Walmart, to name a few.
9.) Offer Last Minute Deals
In a Crazy Egg article, they deliver common mind tricks that ecommerce vendors use to close the sale, complete with a variety of illustrated screen shots. These tactics have been proven to be successful and range from time sensitive purchases, to faster shipping, immediate savings, limited stock, best value options, free shipping thresholds and more.
Yet another immediate tactic here that you can explore is the popup special offer, such as the one that’s provided for you in the Crate & Barrel example (below). They encourage newsletter signups and offer 10% in savings when you signup. What’s more, the company also uses these pop-ups for cart abandoners and return shoppers to increase average order value.
With cart abandonment rates at an all-time high (we’ve estimated that online retailers stand to lose around $4 trillion from cart abandonment in 2019 and beyond), it’s imperative to convince and convert with a consumer as soon as possible. In many cases, a pop-up that creates a senses of urgency combined with a unique value proposition is a tried and true method to increase average order value as well as your conversion rates across the board.
Improve Consumer Confidence
One last bit of advice is that you will want to improve purchasing confidence. Before most consumers make a purchase, studies have found that 67% of them will read the returns policy. Over 80% of them want to know that it’s easy to return a product to your store after the fact, or they won’t be inclined to make the purchase.
Assure customers that no matter what, returns are simple and fast with your online store. In a Science Daily study, it was found that retailers that offer hassle-free, no-questions-asked returns policies were able to improve sales revenue by 25% over just six months. This also increased the average order value of returning customers, as well as helping to attract new customers via word-of-mouth.
If you apply some of the methods we’ve presented here to you today, you should see a notable and immediate uptick in sales. What’s more, you’ll be sure to note that your average order value will increase, too. If you need even more tips, look at our related guide: Ecommerce Social Proof & Why You Need It.