By understanding your business’s AOV and which products are bought more often, you can figure out how to boost sales and profitability. In this article, we will explore AOV (Average Order Value) and provide tactics to increase the average order value for your e-commerce website without sounding too promotional or bothersome to your customers.

What is the Average Order Value?

Average Order Value (AOV) is a metric that businesses use to measure the average amount of money customers spend per transaction. 

AOV is a valuable metric that reflects customer behavior. It provides insights into how businesses can optimize their operations to increase revenue and improve customer engagement.

How to calculate Average Order Value

To calculate the Average Order Value (AOV), you can figure it step by step:

Total Revenue: Add up the total revenue generated from all customer orders within a specific period (e.g., a day, week, month, or year). This is the sum of all the money earned from sales during that period.

Number of Orders: Count the total number of orders received during the same time frame. This is the total number of transactions within the specified period.

The formula for calculating the Average Order Value is:

AOV = Total Revenue / Number of Orders

For example, if your e-commerce store earned $10,000 in a month from 200 orders, you would calculate the AOV as follows:

AOV = $10,000 / 200 = $50

So, the Average Order Value in this example is $50, meaning that, on average, each customer spent $50 per transaction that month.

Average E-commerce Order Value statistics by industry 2023

In August 2023, the Average Order Value (AOV) for the Home and Furniture category peaked at $250, marking a 6% decline compared to July 2023. Over the past twelve months, Home and Furniture consistently maintained the highest AOV, averaging $251. 

Following closely, the Fashion, Accessories, and Apparel industry holds the second position with an AOV of $141, indicating a $4 drop compared to the previous month. The Luxury and Jewelry sector ranks third, declining from $152 in May to $137 in June.

Consumer Goods secures the fourth spot with an AOV of $126, joining the four sectors that surpassed the $100 mark in June 2023. The Food and Beverage industry takes the fifth position with an AOV of $93. 

Further down the list, the Multi-brand Retail sector ranks sixth in the study, reaching an AOV of $81, which is $3 higher than the preceding month and represents the sector’s second-highest AOV this year.

Beauty and Personal Care have maintained a steady AOV of $72 for the past two months. In contrast, the Pet Care and Veterinary Services sector holds the lowest AOV at $65, decreasing by $6 monthly and dropping almost $20 from its peak of $84 in September 2022.

Average Ecommerce Order value statistics by device 2023

Desktop users, on average, displayed the highest AOV at $123. The higher AOV for desktop users might be attributed to the larger screen size, which often provides a more comprehensive and convenient browsing and shopping experience. It also indicates a higher level of comfort and trust among these users.

Mobile users showed a slightly lower AOV, averaging $107. Mobile users may prioritize convenience and on-the-go shopping, which could explain the slightly lower AOV. Additionally, the limited screen size of mobile devices may influence the decision to purchase fewer items per order.

Tablet users exhibited the lowest AOV among the three categories, with an AOV of $81. The lower AOV for tablet users is attributed to their device being a middle ground between mobile convenience and desktop robustness.

Average Ecommerce Order Value statistics by channel 2023

With an AOV of $225.95, Unidentified indicates a relatively higher value of orders. 

Direct Visits generate moderate to high-value orders ($107.37). Businesses should focus on customer retention and engagement strategies to maximize the value of these visits.

Customers arriving through email marketing campaigns have an AOV of $99.90. Email campaigns effectively drive sales, and businesses should continue to fine-tune their email marketing efforts to maintain or potentially increase the AOV.

Search Engines have an AOV of $91.74. Businesses can enhance their search engine optimization (SEO) and advertising strategies to leverage this source further.

Social media-driven visits have the lowest AOV at $73.83. While social media is a valuable marketing tool for engaging with customers, businesses may need to focus on strategies encouraging higher-value purchases from this channel.

10 Ways to increase Average Order Value for ecommerce store

1. Offer a free shipping threshold

This strategy encourages customers to spend more money by offering free shipping once a certain purchase amount is reached, and incentivizing them to increase their shopping cart’s total value.

You can display the free shipping threshold on your website to implement this strategy. Use banners, pop-ups, or announcement bars on the homepage. To remind customers, include the threshold in product listings, shopping carts, and checkout.

Additionally, suggest related products when customers view an item, encouraging them to add more to their cart. Offer discounts or promotions for reaching the threshold, like “10% off your order when you spend $75.”

One way to increase AOV is to send personalized emails to customers who have items in their cart but have yet to reach the threshold, reminding them of the added value of achieving it.

2. Add a discounted upsell after completing order

The timing is crucial because the customer’s interest and trust are at their peak. The upsell should be presented immediately after the customer completes their order. 

The upsell offer should be highly relevant to the customer’s recent purchase. It can be a complementary or upgraded product or service that enhances their initial purchase.

You need to offer the upsell at a discounted price by highlighting the cost savings or value the customer will receive by taking advantage of the offer. This discount acts as an additional incentive for them to accept the upsell.

3. Cross-Sell related products during checkout

Start by identifying products that are genuinely related to what the customer is about to purchase. You should display related products on the checkout page or in the shopping cart summary through the “You Might Also Like” or “Frequently Bought Together” section.

Let’s offer discounts for bundling related products together. For instance, “Save 15% when you add this accessory to your order.” Then, tailor the cross-sell suggestions to the specific items in the customer’s cart. If they have a smartphone in the cart, recommend compatible cases, screen protectors, or headphones.

4. Provide bundle deals 

This strategy encourages customers to purchase larger products by showcasing the cost savings of buying in bulk. Here’s how to implement this approach effectively:

• Make the bundles visually appealing by using high-quality images and clear product descriptions. Indicate the original price of each item and the discounted bundle price.
• Offer a significant discount when the products are bundled together. The discount should be compelling enough to entice customers to buy the bundle instead of individual items.
• Promote bundles on product pages, in the shopping cart, and during checkout. Ensure customers know these offers at different stages of their shopping journey.
• Use customer data and behavior to personalize bundle recommendations. Show bundles relevant to the items in the customer’s cart or browsing history.

5. Give a gift card

Let’s offer gift cards in tiers based on order value. For instance, customers who spend over a set amount could receive a higher-value gift card. This motivates customers to reach higher spending thresholds.

You can set a reasonable expiration date for the gift card, ensuring customers use it within a specified timeframe. This encourages customers to return to your e-commerce store sooner and spend more to redeem the card.

Finally, encourage customers to refer friends and family to your e-commerce store by offering them gift cards to reward successful referrals. This not only increases AOV but also brings in new customers.

6. Execute first time offers 

These offers, often in the form of welcome discounts or exclusive deals, are a powerful magnet for attracting new customers and enticing them to make larger initial purchases. First-time customers are more likely to explore the product range, add complementary items to their carts, or reach minimum purchase thresholds to qualify for discounts. 

A common method for first-time offers is providing a welcome discount to new customers. This can be a percentage off their first purchase, a fixed amount discount, or a buy-one-get-one deal. Such offers entice new customers to make more substantial initial orders, raising the AOV.

Another effective technique is to set minimum purchase thresholds for first-time offers. For instance, a discount might be available only when a customer spends a certain amount. This encourages buyers to add extra items to their orders to qualify for the offer, increasing the overall order value.

7. Offer time-sensitive deals

This deal is a great way to create a sense of urgency and scarcity, encouraging visitors to make quicker purchasing decisions.

You can host flash sales that last very short, typically a few hours to a day. Promote these sales on your website and social media, and use countdown timers to create urgency.

Moreover, send time-sensitive emails to customers who abandoned their shopping carts. Offer a discount or an incentive to complete their purchase within a specified timeframe.

Another way to create an urgent deal is to promote items with limited quantities available. Use phrases like “Only 5 left in stock” to create a sense of scarcity and urgency. Customers are more likely to purchase when they fear missing out.

8. Have a loyalty program

According to Yotpo, nearly 68% of respondents are willing to join customer loyalty programs for brands they like, underscoring their attractiveness. This statistic shows that many consumers are interested in receiving the benefits and rewards associated with loyalty programs.

You can implement a points-based system that rewards customers with points for purchases and allows them to redeem them for discounts or exclusive merchandise. Consider setting up a tiered loyalty program with increasing benefits as customers increase the levels and offer personalized birthday rewards. 

Encourage referrals by implementing a referral program, providing exclusive access to loyal customers, and engaging them through gamification and community platforms. Additionally, incorporate social media engagement rewards, subscription programs, and personalized recommendations, and periodically surprise customers with mystery rewards. 

Remember to keep your program simple and valuable and regularly refine it based on customer feedback and performance data.

9. Show savings with bulk orders

This strategy encourages customers to purchase larger products by showcasing the cost savings of buying in bulk by showing the regular and discounted bulk prices side by side, emphasizing the amount customers can save. Use persuasive messaging like “Buy More, Save More” to encourage larger orders.

10. Creating a game or a contest 

You can develop a game or contest that seamlessly integrates with your e-commerce platform. For example, customers can “spin the wheel” to win discounts or prizes after reaching a certain order value. This interactive element enhances the shopping experience and encourages customers to explore more products.

Moreover, you can also organize competitions or challenges that require customers to spend a certain amount or purchase specific products to enter. For example, customers could compete to build the largest cart to win a valuable prize. This approach increases AOV as customers strive to meet the entry requirements.

Offer games or contests for a limited time, such as during holidays, special promotions, or events. Customers are more likely to spend more within a defined timeframe to maximize their chances of winning or earning rewards.

Conclusion

The key takeaway is that AOV is not a static figure but a dynamic metric that you can nurture and cultivate over time. As e-commerce continues to evolve, AOV will remain crucial to your success. With the information and ideas you’ve gained from this guide, you’re well-prepared to enhance your AOV and make your online business even more successful.

*References: Marketsplash, Yotpo, Shopify