Average Order Value (AOV) is a key metric for any Shopify store. It measures the average amount spent each time a customer places an order. A higher AOV directly impacts your store’s revenue and profitability.
Focusing on increasing AOV is a smart growth strategy. It allows you to maximize revenue from your existing customer base. This reduces the need to constantly attract new customers, which can be costly. A higher AOV also improves your overall return on investment (ROI) in marketing and customer acquisition.
In this article, we’ll explore proven strategies to increase your AOV on Shopify. From product bundling to upselling and loyalty programs, you’ll discover practical tips to boost your store’s revenue.
Understanding Your Current AOV
How to Calculate AOV on Shopify
Calculating your Average Order Value (AOV) is straightforward. Simply divide your total revenue by the number of orders placed.
To see your AOV report in Shopify:
- Go to your Shopify dashboard.
- Navigate to the “Analytics” section.
- Find the “Average Order Value” graph.
Analyzing Your Current AOV
Benchmark your AOV against industry standards to understand where you stand. Research your niche to find average AOV figures. This will help you identify if your AOV is above or below average.
Look for trends in your data. Are there times when your AOV spikes or drops? Understanding these patterns can help you find opportunities to improve.
Setting AOV Goals
Set realistic AOV goals based on your current performance. If your current AOV is $50, aim for a 10-15% increase. This makes your goal achievable and measurable.
Track your progress regularly. Use Shopify’s analytics tools to monitor changes in your AOV as you implement new strategies.
How to Improve Your Average Order Value on Shopify?
Increasing your Average Order Value (AOV) on Shopify is essential for maximizing revenue and growing your business. By focusing on strategies like Upselling, Free Gift Offers, Checkout Optimization, or Product Bundling we discuss how you can encourage customers to spend more with every purchase.
This guide will walk you through proven tactics to boost your AOV and enhance your store’s profitability.
1. Use Upselling and Cross-Selling
What is Upselling and Cross-Selling? Upselling involves offering a more expensive version of the product the customer is considering. Cross-selling suggests related products that complement the item in the cart. Both strategies encourage customers to spend more.
These strategies increase AOV by encouraging customers to purchase additional or higher-priced items. They also enhance the customer experience by providing more value and relevant product options.
For upselling, recommend premium versions or add-ons that improve the main product. Place upsell offers at key points, such as on the product page or cart page.
For cross-selling, suggest complementary products on the cart or the product page. For example, recommend a protective case for a phone or matching accessories for a clothing item.
Ensure cross-sell offers are relevant to the customer’s current purchase to increase the chances of conversion.
Apps for Cross-Selling and Upselling
Use Shopify apps designed for upselling and cross-selling. Popular options include MVR Free Shipping Bar & Upsell. This app makes it easy to create and manage upsell and cross-sell offers in your store, as well as add a progress bar encouraging customers to reach the cart goal.
2. Add Product Bundling
What is Product Bundling? Product bundling involves offering multiple products together at a discounted price. It encourages customers to buy more by providing a better deal.
There are a few types of product bundles:
- Complementary Bundles: Pair-related products that naturally go together, like a laptop and a carrying case.
- Bulk Purchasing Bundles: Offer discounts when customers buy items in larger quantities, such as a pack of five t-shirts.
- Seasonal or Thematic Bundles: Create bundles around a theme or season, like a holiday gift set or summer essentials.
How to Implement Product Bundling on Shopify?
- Decide which products to bundle together.
- Set a discounted price for the bundle.
- Use a Shopify app like Bundle Builder or Bold Bundles to set up and manage your bundles.
3. Set Free Shipping Thresholds
Setting a free shipping threshold is a powerful way to increase AOV. Customers often add more items to their cart to qualify for free shipping.
How to set up optimal Free Shipping threshold:
- Analyze your current AOV and set the free shipping threshold slightly above it.
- For example, if your average order value is $50, set the threshold at $60 to encourage customers to spend just a little more.
- Use a progress bar to show a customer’s progress towards free shipping.
- Use the MVR Free Shipping Bar & Upsell app to set up a Free shipping progress bar.
4. Offer Free Gifts
You may wonder, how free gifts improve your AOV. The answer is this: the powerful psychological impact of receiving something for free motivates customers to spend more.
Customers are likely to add extra items to their cart to reach the purchase threshold required to receive the free gift. This not only increases AOV but also enhances the overall shopping experience, making customers feel rewarded and valued.
How to Implement Free Gift Offers?
Structure your free gift offers around a minimum purchase amount. For example, offer a free gift for orders over $75. Ensure the gift is something desirable and relevant to your customers.
Best Practices for your Free Gift offers:
- Clearly communicate the free gift offer on your homepage, product pages, and at checkout.
- Use countdown timers or limited-time offers to create urgency.
- Make sure the gift adds value and complements the customer’s purchase.
- Add a progress bar to visualize progress towards receiving a free gift.
Apps for Setting Up Free Gift Offers on Shopify
Several Shopify apps can help you easily set up and manage free gift promotions.
Here are the recommended apps for free gift offers:
- MVR Free Shipping Bar & Upsell: this app can be used to show progress towards a free gift and upsell specific products to add to the cart.
- Free Gifts by Secomapp: Allows you to create flexible free gift offers based on cart value or specific products.
- Gift Box by Digismoothie: Provides options to offer free gifts, discounts, or buy-one-get-one (BOGO) deals.
4. Experiment with Pricing Strategies
Strategic pricing plays a crucial role in boosting Average Order Value (AOV). By carefully setting prices, you can encourage customers to spend more per transaction. Pricing can influence perception, making customers feel they’re getting a better deal when they add more items to their cart.
One of the pricing strategies is Tiered Pricing.
Tiered pricing offers customers different price points based on the quantity purchased. It’s effective because it incentivizes buying more to get a better price.
Another general way of increasing your revenue is by offering discounts and promotions.
Discounts can boost AOV when structured correctly. Offer discounts that encourage customers to spend more without drastically cutting into your margins.
For example:
- Buy More, Save More: Offer a 10% discount on orders over $100, and 15% off orders over $200.
- Bundle Discounts: Create product bundles that offer a slight discount compared to purchasing items individually, encouraging customers to buy the bundle instead of just one item.
5. Create a Loyalty Program
Loyalty programs are essential for increasing repeat purchases, which can significantly boost AOV. By rewarding customers for their loyalty, you encourage them to return and spend more, improving both customer retention and revenue.
How to Design an Effective Loyalty Program?
An effective loyalty program should offer meaningful rewards that motivate customers to make larger purchases.
Key Elements of the Loyalty Program:
- Points System: Reward points for every dollar spent, with higher points for larger purchases.
- Tiered Rewards: Offer better rewards as customers spend more, incentivizing them to increase their order size.
- Exclusive Offers: Provide members with exclusive discounts or early access to sales, making them feel valued and encouraging more spending.
How to add a Loyalty Program on Shopify?
Setting up a loyalty program on Shopify is straightforward with the right tools. You would need to use on of these recommended apps:
- Smile.io
- LoyaltyLion
- Yotpo Loyalty & Rewards
General Step-by-Step Guide:
- Choose a loyalty program app that fits your store’s needs.
- Install the app and configure the program rules (e.g., points per dollar spent, reward tiers).
- Promote the loyalty program on your site and through email marketing to encourage sign-ups and participation.
6. Customize and Personalize Purchasing Experience
Personalized shopping experiences significantly increase AOV. Customers are more likely to purchase when they feel a product is tailored to their needs or preferences. Personalization creates a sense of exclusivity and connection, encouraging customers to spend more.
One aspect of personalization is to offer tailored products.
Product customization allows customers to add personal touches to their purchases, such as monograms, color choices, or custom packaging. This not only increases the perceived value of the product but also encourages larger orders as customers seek unique, personalized items.
To customize the shopping experience:
- Offer customization options directly on product pages.
- Clearly display the additional cost, if any, for customization.
Personalized product recommendations can be implemented using AI and machine learning to analyze customer behavior and suggest items they are likely to buy.
Tips to personalize:
- Display personalized recommendations on the homepage, product pages, and during checkout.
- Use data from previous purchases and browsing history to tailor suggestions.
Shopify Apps for Personalization:
- MVR FREE Shipping Bar & Upsell uses Shopify’s internal algorithm to show recommended products.
- Nosto and LimeSpot are popular apps that provide personalized product recommendations based on customer behavior.
7. Optimize Checkout
A streamlined checkout process is crucial for minimizing cart abandonment and maximizing AOV. The goal is to make it as easy and quick as possible for customers to complete their purchases.
Tips for checkout optimization:
- Reduce the number of steps in the checkout process.
- Offer guest checkout options to avoid forcing account creation.
- Ensure the checkout page is mobile-friendly and loads quickly.
One-Click Upsells
One-click upsells allow customers to add related products or upgrades to their order with a single click during checkout. This is an effective way to increase AOV without disrupting the buying process.
Benefits of One Click Upsells:
- Quick and easy for customers to add extra items.
- Increases order size with minimal effort from the customer.
Use apps like Zipify OneClickUpsell to integrate one-click upsells into your checkout process.
8. Reduce Cart Abandonment
Reducing cart abandonment is key to increasing AOV. Many customers abandon their carts due to unexpected costs, complicated checkouts, or lack of payment options.
Cart Abandonment Strategies:
- Show all costs upfront, including shipping and taxes.
- Offer multiple payment options, including digital wallets like PayPal and Apple Pay.
- Send automated cart abandonment emails to remind customers of their items and encourage them to complete their purchases.
Tools and Apps for Checkout Optimization:
There are several Shopify apps designed to help you optimize the checkout process and increase AOV:
- Shopify Checkout Extensions: Allows for a more customized and optimized checkout experience.
- ReConvert Upsell & Cross Sell: Helps you create post-purchase upsell offers that can be added during checkout.
How to Measure and Analyze Results for your AOV improvements?
Monitoring your Average Order Value (AOV) is crucial to understanding the effectiveness of your strategies. Shopify provides built-in analytics tools that make it easy to track AOV.
- Go to your Shopify dashboard.
- Navigate to “Analytics” and select the “Sales” report.
- Here, you can view your AOV over various time periods and assess the impact of your strategies.
While AOV is a vital metric, it’s important to track other related metrics to get a complete picture of your store’s performance.
Other Important Metrics to monitor:
- Conversion Rate: Measures the percentage of visitors who make a purchase. A higher conversion rate indicates effective sales tactics.
- Customer Lifetime Value (CLTV): Indicates the total revenue you can expect from a single customer over time.
- Cart Abandonment Rate: This shows how often customers add items to their cart but don’t complete the purchase. Reducing this rate can directly boost AOV.
Making Data-Driven Decisions
Using data insights allows you to refine your AOV strategies continuously. Regularly analyze your AOV and other key metrics to identify trends and areas for improvement.
Here are a few tips:
- Experiment with different strategies and track their impact on AOV.
- Use A/B testing to determine which tactics are most effective.
- Adjust your approach based on data, focusing on the strategies that drive the best results.
Conclusion
Throughout this guide, we’ve explored various strategies to increase your Average Order Value on Shopify. These include upselling and cross-selling, product bundling, strategic pricing, loyalty programs, free gift offers, personalization, and checkout optimization. By implementing these tactics, you can significantly boost your store’s revenue.
Don’t wait to start making these changes in your store. Begin by implementing a few strategies that resonate most with your business. I strongly suggest you to install an MVR Free Shipping Bar app to increase your sales immediately. Monitor the results and keep refining your approach as you see what works best for your audience.
