How to Increase Your AOV of Your Shopify Store?


Jul 17, 2023


8 min read

The world of ecommerce is a dynamic one that is constantly undergoing change, and this is why entrepreneurs often find themselves in perpetual pursuit of growth. Launching an online store, marketing products, and making consistent sales are critical milestones that lay the foundation for success. However, many business owners encounter a puzzling challenge along the way: their revenue starts to stagnate, seemingly trapped at a low average order value (AOV).

As an ecommerce entrepreneur, witnessing your store on the precipice of plateauing can be disheartening. While increasing website traffic seems like an obvious solution, it often translates into more work, higher costs, and an unsustainable acquisition treadmill. Fortunately, there is a strategic remedy that offers immense potential: optimizing and elevating your average order value.

By encouraging customers to purchase more items or invest in higher-priced products, you can break free from the shackles of stagnant revenue and ignite sustainable growth. In this article, we will delve into the concept of average order value, explore its significance for your business, and uncover practical strategies to measure and enhance this crucial metric.

Unlocking the power of average order value not only bolsters your revenue but also fosters customer loyalty, increases profitability, and enables your business to thrive in an increasingly competitive ecommerce landscape. So, let us embark on this journey to uncover the secrets of maximizing average order value and unlock the full potential of your ecommerce business.

Are you ready to take your online store to new heights? Let’s dive in!

What is AOV?

The average order value (AOV) refers to the average amount of money customers spend per transaction at your store. It can be calculated by dividing the total revenue by the number of orders, resulting in the average order value.

For instance, if your store generated $1,700 in total revenue from 100 orders, the AOV would be $17. This means that, on average, customers spend $17 per purchase at your store.

Shopify provides customer reports that automatically calculate this metric, or you can utilize various apps available in the Shopify App Store.

Two other important metrics to consider are average basket value and customer lifetime value. Average basket value indicates the average number of items sold per transaction, while customer lifetime value measures the total worth of a customer throughout their entire relationship with your business. Monitoring customer lifetime value is crucial for customer retention.

To boost your average order value, you’ll need to encourage customers to add more items or higher-priced items to their shopping carts. In the following sections, I will present five practical strategies that can help you increase the average order value of your store and encourage customers to make larger purchases at checkout.

How to Calculate AOV?

To calculate the Average Order Value (AOV), you can follow these steps:

  • Determine the time period: Decide on the specific time period for which you want to calculate the AOV, such as a month, quarter, or year.
  • Collect the necessary data: Gather the total revenue generated during the chosen time period and the number of orders placed within that same period.
  • Calculate the AOV: Divide the total revenue by the number of orders to calculate the AOV using the formula:Average Order Value = Total Revenue / Number of Orders

    For example, if your total revenue is $10,000 and you had 500 orders, the calculation would be:

    Average Order Value = $10,000 / 500 = $20

    Therefore, the AOV in this case would be $20.

    Remember that the AOV provides insight into the average amount spent per transaction by customers at your store. It can be a useful metric for evaluating customer behavior and identifying opportunities to increase revenue.

Tips to Increase Your AOV

  • Product Recommendations

    Product recommendations are a powerful way to increase AOV by suggesting additional products that customers may be interested in. For example, on a fashion and apparel website, you can use phrases like “Complete the look” to showcase accessories or complementary items that go well with the main product. Websites like Zaful effectively display products that other users have viewed, incorporating social proof to encourage customers to explore more options.
  • Upsell or Cross-sell Complementary Products
    Upselling involves recommending higher-priced or upgraded versions of the product the customer is considering. Cross-selling, on the other hand, suggests complementary products that enhance the customer’s purchase. For instance, if a customer is buying a laptop, you can recommend a mouse or laptop bag as a cross-sell item. Colorado Crafted uses a cross-sell tactic on their checkout page, offering customers the option to add a Colorado Water Bottle and increase their order value.
  • Set Order Minimums for a Discount
    By setting order minimums, you can incentivize customers to increase their cart value to qualify for a discount or free shipping. United By Blue, for example, offers free shipping for orders over $100. This strategy encourages customers to add more items to their cart to meet the threshold and take advantage of the offer. Using a promotion bar on your website can effectively communicate the minimum order incentive.
  • Set Up a Customer Loyalty Program
    Implementing a customer loyalty program is an effective way to increase AOV and encourage repeat purchases. Rewards or loyalty programs provide incentives for customers to engage with your brand and earn benefits. Nordstrom’s loyalty program, The Nordy Club, rewards big spenders, offering incentives such as exclusive discounts and early access to sales. By providing points-based systems or tiered rewards, you can motivate customers to spend more to earn additional benefits.
  • Bundle Products or Create Packages
    Product bundling involves combining multiple items together at a discounted price compared to purchasing them individually. This approach increases the perceived value for customers and encourages them to make a larger purchase. For example, BioLite bundles their camping stove with accessories, providing customers with a complete cooking solution. Offering customizable bundles, like allowing customers to build their own first aid kit or gift box, also increases AOV by empowering customers to choose additional items they desire.
  • Optimising the Checkout Flow
    Implementing cross-selling and upselling strategies in the last step of the checkout flow is a highly effective way to increase AOV. This is typically done by suggesting additional products that complement or enhance the customer’s purchase. For instance, Weezie Towels cross-sells a pair of towels during the final checkout step, offering customers the opportunity to add an extra item to their order. Primally Pure Skincare takes a similar approach by presenting various upsell products based on what customers have already added to their cart. These strategies leverage the customer’s intent to purchase and encourage them to consider adding more items, resulting in a higher AOV.
  • Smart Cart
    Promoting additional products through cross-sells and upsells in the cart is an effective method to increase AOV. Brands employ different approaches to present these opportunities. Parachute Home utilizes a side-cart upsell to showcase complementary products or even collect donations for charity. Black Rifle Coffee strategically offers recommended products, texture options, and additional upsells directly in the cart, making it easy for customers to add more items to their purchase. Draper James provides a simple upsell option for gift wrapping, while Margaux offers cross-sell products positioned below the cart. By strategically placing these options and showcasing relevant products, brands can entice customers to make additional purchases, thereby increasing AOV.
  • Optimize Your Free Shipping Threshold
    Optimizing your free shipping threshold is an effective way to encourage customers to increase their cart value. When customers see that they are close to qualifying for free shipping, it motivates them to add more items to their cart in order to meet the threshold. Homesick Candles, for example, displays a banner indicating the remaining amount needed to qualify for free shipping, providing a visual reminder and incentive for customers to add more products. By setting the threshold slightly above your average order value, you create a sense of attainability and encourage customers to add just a bit more to their order to enjoy free shipping. This strategy not only boosts AOV but also enhances the overall customer experience.
  • Upsell & Cross-sell on the Thank You Page
    After customers have completed their purchase, the thank you page offers another opportunity to increase AOV through upselling and cross-selling. Using tools like CartHook or Bold Checkout, you can present one-click upsells and cross-sells to customers who have already purchased. This presents an advantageous situation as customers are in a buying mindset and may be more receptive to additional offers. The key is to promote products that are easy to add without much consideration, allowing customers to make quick purchase decisions. This strategy capitalizes on the customer’s existing purchase and maximizes the revenue potential from each transaction.

In Conclusion

Implementing strategies to increase average order value (AOV) can have a significant impact on your revenue. However, it’s crucial to implement these strategies properly and in a way that aligns with your brand’s image and user experience.

Avoid using unexpected pop-ups, elements that deviate from your brand guidelines, or anything that disrupts the user experience negatively. The examples we’ve shared above demonstrate effective implementations that enhance the customer journey without being intrusive.

Remember that optimizing your store for a higher AOV is equally important as optimizing for conversions. Bundles, selling larger quantities, cart cross-sells, checkout upsells, optimizing shipping thresholds, and post-purchase upsells are all effective ways to boost AOV. Start by implementing one strategy and test different products at various price points to find what works best for your business.

If you need assistance optimizing your e-commerce store and implementing strategies to increase AOV, consider contacting Saffron Edge. Their team of experts can provide guidance and support to help you achieve your revenue goals. Take the next step towards increasing your AOV and driving higher revenues with Saffron Edge today!

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