With eCommerce sales expected to total $6.3 trillion in 2023, the online shopping landscape is teeming with traders–all vying for consumers’ attention. Regardless of your product or service type, the key to improving eCommerce business growth is knowing how to increase AOV.
The Average Order Value (AOV) indicates the average amount of money customers spend on each eCommerce order. You can calculate this by dividing the total revenue generated from all orders by the number of orders during a specific period. This metric helps businesses understand customer purchasing habits and identifies opportunities to increase revenue by upselling or cross-selling. Importantly, your AOV directly impacts profitability and growth. Not only does a higher AOV expand sales, it also improves customer lifetime value and strengthens engagement.
In this guide, we offer effective strategies you can implement to nudge consumers toward increasing their eCommerce order value.
1. Creating Bundles
eCommerce product bundling is a marketing strategy where multiple related items are grouped together and sold as a package. Bundle pricing offers customers greater value and potential savings than purchasing items individually. This is often seen in pairings like shampoo, conditioner, or a computer and accompanying software.
The great thing about this strategy is not only that you increase AOV, you also grow a loyal customer base.
Bundling offers several benefits for businesses and customers alike, such as:
Increased sales. By bundling related products or complementary services, businesses can encourage customers to make larger purchases, ultimately leading to more sales.
Enhanced customer experience. Bundling makes it straightforward for customers to find and purchase all the items they need in one package, thus streamlining the shopping process and improving convenience.
Competitive pricing. Customers often enjoy cost savings when purchasing bundled products. After all, the idea of buying more and paying less is way more appealing than buying each item separately. In addition, by bundling items, your margins have more leeway.
Cross-selling opportunities. Product bundling creates opportunities for cross-selling, where customers are introduced to new products or services that they may not have considered before.
Competitive advantage. Offering bundled products sets businesses apart from their competitors by attracting customers looking for convenience as well as value.
Inventory management. By selling slow-moving or excess stock as part of a bundle, businesses can manage their inventory more effectively. This reduces loss resulting from unused inventory, while saving on advertising and shipping expenses.
Awareness. Bundling combines new products with popular items, thus complementing marketing campaigns. This method can even reduce the overall cost of marketing campaigns.
Bundling Best Practices
The first step to increase AOV through bundling is to research consumer buying habits as well as what your competitors offer. Focus on:
- The needs of your target market
- Customer pain points
- How you can solve these problems
- What competitors are doing to meet consumer needs
Next, use your research findings to create enticing bundles and then test the various bundle setups. Experiment with:
- Different bundling sizes and contents
- Website positioning–where on your website the bundling offers get the most attention
- Sales channels–which platform(s) are better suited to individual product sales and which prove more effective for bundling
Recommending Similar Items
A robust merchandising tool should help you easily recommend and display similar items during the customer's browsing session and purchasing journey. By leveraging product reviews, ratings, and popularity, you can enhance the user experience and increase AOV.
Entice users to explore more products and add items to their cart. For instance, showcase related products on the product page or during the checkout process to maximize the power of cross-selling.
To ensure your recommendations are relevant and attractive, consider the following strategies:
Highlight Best Sellers
When users are unsure about a certain product, knowing what others choose and what’s popular often helps them to decide.
Display Similar Products
If a customer is, for example, looking at a ski jacket, you know they’re interested in that product category. Showing ski jackets from different brands or with different features and colors expands their options and could help them find something more suitable.
Display Related Products
As opposed to displaying different versions of the same product, you can also display products that complement the use case. Say that someone’s shopping for an iPhone, then display iPhone cases. Alternatively, if they’re purchasing pillows, showcase pillowcases, or if they’re buying a toothbrush, recommend toothpaste.
Promote What Others Bought (With Reviews)
Analyze which products customers tend to purchase together and display this in an “Others have also bought” panel. Include star ratings or access to reviews to boost appeal with social proof.
Personalization Based on Search History
A McKinsey survey revealed that personalization across the consumer purchasing cycle directly influences buying behavior. The survey concluded that 76% of consumers are more likely to purchase from companies that personalize communication and product recommendations, while 78% are more likely to make repeat purchases. In addition, fast-growing brands generate 40% more of their income from personalization than average competitors.
These stats illustrate how tailoring the shopping experience and product recommendations to an individual's interests can be an extremely effective strategy to increase AOV. Leveraging data from previous searches and purchases requires advanced algorithms and data analysis techniques. By automatically analyzing and tracking search and purchase behaviors, an AI-backed eCommerce merchandising tool will allow you to offer customized suggestions without snowballing your team’s workload.
Social media also holds great influence over consumer purchasing decisions. This is why it’s vital for an impactful visual merchandising tool to include social media analytics that tracks customers’ preferred brands or products across their accounts to improve personalization accuracy.
Leverage Visual Merchandising to Increase AOV
To learn how best to increase AOV, eCommerce retailers first need to understand consumer needs, desires, and behaviors. With this information, online stores can enhance products displays and catalogs to target shoppers more effectively.
Smart Merchandiser is an innovative visual merchandising software that helps you optimize your online storefront to drive sales. The platform lets you identify consumer needs, easily organize a visually appealing store, and efficiently analyze your inventory.
Instead of manually tracking and organizing individual products on your eCommerce store, Smart Merchandiser offers automated sorting and simple drag-and-drop capabilities. By automating your visual merchandising tasks, your online team can boost productivity by 70%, while your business can see revenue growth of up to 20%.
Increase your profits with a strategic, visually optimized merchandising plan. Talk to a Smart Merchandiser representative today.