Let’s say you have an online store and things are going well; the store generates sales and you make a profit. You come through reports on your online store panel to check the orders and sales, but have you ever thought about an average value of orders? This is a very important indicator, tracking the average amount spent each time a customer places an order.
To calculate your online store average order value you should simply divide total revenue by the number of orders. According to statista.com the average order value in the USA in 2018 reaches $120. Of course, it also depends on the type of goods you sell, but still, if you look at your results and see they are far behind the average you should try to increase the order value. Here we collect some good tips on doing this.
There are a number of ways to increase your average order value, some of them encourage your customer to buy more products than they had originally intended, others help them buying more expensive products.
Upselling
This is a very powerful strategy when you promote a product upgrade or a more expensive version of the product. You can upsell by recommending an alternative with a higher price or offering add-ons (like extra warranty, gift bag etc) to the original item.
Cross-sells
Cross-selling is when you promote a complementary product during the checkout and also on the product detail page. This technique is one of the most common used to increase the average order value. Offer additional products your customers might need before they complete the purchase.
Free shipping
Shipping is still stumbling block of many customers. According to many research, about 40% of users abandon their carts because of the cost of shipping which is too high. So, if you set a minimum purchase amount and offer a free shipping you can increase the number of products your customers purchase.
Volume discounts
Offer discounts on bulk purchases of the same product. It can also help you sell out faster your stock. But before you set up the discount please ensure the cost of shipping will be apprporiate and also the discount value should attract customers and at the same times doesn’t reduce your profit.
Loyalty program
You encourage your customers to return to your store so you should consider setting up a rewards or loyalty program. This can also help increase the average order value of your store. When there’s an incentive for your customers to earn points they can be expected to spend more, and the average order value increases significantly.
In TMotions we work with nopCommerce eCommerce platform which allows us to implement all these features in our clients’ online shops.
