What is Average Order Value?
Average Order Value (AOV) is a metric used to measure how much your customers typically spend. Understanding your AOV and how it can be improved is a great way to measure how well your ecommerce store is working and identify areas to make more money by increasing the AOV.
Working out your average order value with BigCommerce
Average order values can be easily worked out. It’s simply the revenue you have made divided by the total number of orders. So, for example, if you have made $25,600 in the last 2 months and you have had 386 orders in that time period, your average order value for the last two months is $66.32.
Let’s dig deeper into some ways to increase this...
Offering your products as gifts is a great way to add some extra value and increase the average order value in your e-commerce store cart.
You can offer the option of gift wrapping for an extra fee in the checkout area of the cart or on each product page itself.
Go to Advanced Settings › Gift Wrapping in your BigCommerce store and click ‘Add a New Gift Wrapping Option’ to set this up.
It’s worth bearing in mind that many gifts will be sent directly to the recipient, not the customer, so you’ll need to ensure that your packaging doesn’t give the game away and spoil someone's birthday!
You can even select a theme from the range of themes offered by BigCommerce if gifts are likely to be the main income stream for your type of products.
There are third party theme providers who can offer a greater amount of variations but you will most likely need to be prepared to pay for these.
Offering gift wrapping saves the customer the hassle of wrapping the gift themselves and enables the gift to be wrapped and sent directly to the recipient. This is a great way to add a few pounds or dollars to your average shopping cart value.
Gift Cards are another fantastic way to increase your average transaction values in your e-commerce retail store cart.
Shoppers buying gifts for several people (at Christmas time, for example) may find it easier to buy 5 gift cards rather than hunt around for 5 different gifts.
This is a great way to increase the transaction value but also to ensure that the gift card recipients have to visit your site to redeem the gift cards.
Suddenly 1 person buying 5 gift cards has turned into 6 people using your site. They may choose to spend more on other items they can’t purchase on the gift card (if the gift card value isn’t high enough) or may be attracted by a bundle deal (more on that later).
With a bit of luck and some great on-site visuals you may find that some of those customers tell their friends, buy gift cards themselves or become returning loyal customers.
The most common and easy way to operate Gift Cards would be to offer email codes or links that work as a gift card.
You can look to a 3rd party to create a physical gift card, and they can then be used as you would expect, by having a code in your voucher/discount section with a one time redemption limit set.
There are many such gift card manufacturers out there, it is worth getting quotes from 4-5 of them and seeing what works best for your business.
Being the cheapest amongst your competitors is always a great position to be in (if your profit strategy is thoroughly thought through), but often equally as good is a product discount. It’s all about perceptions.
Seeing 20% sounds more attractive and is more attention grabbing than just being 20% all the time. The offer makes the customer see a sense of increased value and is also more likely to see them add more items to their cart (since they feel they are saving anyway).
All of these factors can help to increase your average order value. After all, who doesn’t love a discount!?
Again, this is easy to set up in your dashboard in BigCommerce. To set up a product discount, navigate to Marketing › Promotions.
If there’s one deflating feeling for a customer it’s hidden charges. You’ve worked out your shopping budget, added your items to cart and then been hit with sales taxes you didn’t know about or carriage charges you hadn’t budgeted for. Frustrating!
One reason for free shipping is to prevent this - it’s a great selling point and a competitive boon to your online store. Add to cart and know that there are no further unexpected costs - winner!
You may want to put a certain order value per transaction before free shipping comes in (Spend over £30 for free shipping for example). This is useful as you may push your customer to purchase another item or accessory to tip them over the free shipping threshold.
Be wary not to make it too high as this won’t seem like a good deal, but a reasonable free shipping limit in line with or better than your competitors is a great way to get those average transaction values rising on BigCommerce.
You can set up your Free Shipping rules in your BigCommerce backend quite easily. Go to Store Setup › Shipping and click Configure or Edit next to the shipping zone you want free shipping available in. Simple!
Up-selling is the art of selling a better or more expensive version of a product to a customer. If a customer is looking for an HD television set then a store good at upselling would offer them the option of the more expensive but superior 4K television set.
Similar to bundle deals and cross-selling (more on those below), this is best achieved using the related products options in BigCommerce. This is especially true when coupled with a discount or sale on a more expensive item, making it seem more reasonably priced in comparison to the cheaper item.
Signed books are a great example of upselling. They are the same product as a standard book (say valued at $6), but with the author's signature. This adds value to the buyer and the seller because, even with a discount, the book is listed for far more than the standard selling price.
Essentially the customer gets a limited, rare, or improved version of the book for more money in your cart.
Product reviews can also be a strong tool to use in the pursuit of upselling. Don’t be afraid to use products with great reviews as one (or all) of your recommended products.
Don’t be discouraged if many of your customers don’t choose the upsold product - some people simply know exactly the product they are looking for. If just 1 or 2 customers in 10 choose the upsold product you’ve made an easy increase to your average transaction value whilst also selling an improved product. It’s win-win for you and your customers!
There are a few ways to maximise the possibility of cross-selling products in your store. You can show related products when the customer clicks on an item. BigCommerce has an automatic feature checked for this (showing up to 5 products automatically).
You can manually manipulate the related products section by scrolling to Storefront>Related Products and unchecking the box for ‘Automatically Show Related Products On My Storefront’.
With the manual option you’ll need to select the product and related products in the category and related product fields and select what you want to show.
This is more work but you do have the advantage of control and the ability to add up to 50 related products instead of the default 5.
Also, you can follow up sales with a promotional email or message offering related products or a returning customer discount for their next purchase.
You can do this yourself or use a 3rd party app such as Remarkety to do the leg work for you.
Bundle deals are a fantastic way to improve the average order value for your store. Buying multiple related products or related accessories makes sense.
If a customer is buying a hot tub from your store, they are far more likely to purchase the relevant cleaning solutions at the point of sale. It’s better to present this option to them upfront, rather than waiting for them to come back a few days or weeks later.
By offering a bundle deal to save on shipping or providing a multi-purchase discount you are incentivising the customer to spend more in one purchase.
Also, you’re preventing any competition from selling accessories to your customer. Later on, they might search for ‘hot tub cleaning products’ after having bought the hot tub from you and end up on a competitors website instead of yours.
Bundling items also takes away some of the guesswork from your customers as they are more likely to buy your suggested bundle. Let’s say, for example, they want to buy a lamp but aren’t sure what bulbs are most appropriate. They are more likely to buy the lamp with the suggested bulb as a bundle package with a discount rather than look elsewhere.
This is easily achieved in BigCommerce by using the Related Products feature in the dashboard. You can either manually add the products you want to link to create your bundle, or you can let BigCommerce’s algorithms select this for you.
Ah, the ticking clock! This is a tried and true method pushing sales and thus driving up order values. From the earliest days of trading time limited deals have been used to entice customers to buy sooner and spend more.
‘Offer must end Friday!’ ‘50% off TODAY ONLY!’ ‘The Big Sale - Must End Soon’ and ‘For a limited time - buy 2 get a third free’
All of these slogans have been plastered over storefronts and in later years marketed out as email shots or banner ads. We’ve all seen them (or variations of them) all our lives.
It’s because they work! When customers feel that an offer is limited in number or by time they are more likely to make the purchase decision than if they are left to ruminate on the choice.
So how do you make the most of this selling model in BigCommerce?
Setting up a coupon code is probably the easiest way to do this - you can select the number of customers you’d like to sell to or products available and the expiry date to match your promotional plans.
Just remember to advertise the offer on your site, via your email list and on the usual social media channels to stir up lots of interest!
So there you have it! 8 ways to increase your average order in BigCommerce. Using some (or all) of these suggestions should help you maximise the order value of your online e-commerce store.
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