Average Order Value: How to Boost One of E-commerce’s Most Overlooked Metrics

Average order value (AOV) is an e-commerce performance metric that often finds itself overlooked in favor of its more “visible” counterparts.

Metrics like sales conversion rate, customer lifetime value, and cart abandonment rate are frequently discussed by e-commerce experts, while AOV doesn’t seem to receive the attention it deserves.

This post aims to rectify the imbalance.

Calculating your current AOV is quite simple. All you have to do is divide your total revenue by the number of orders in your e-commerce store, and you are presented with the amount of money your customers spend in your store, on average. Boosting it, nevertheless, takes a bit more effort.

The following strategies are intended to help you increase the average order value in your e-commerce store, directly contributing to the overall success of your business and providing you with a healthier cash flow you can use to drive the growth of your brand.

Create Sales-Focused Product Comparison Pages

One of the best ways to inspire web visitors to spend more is to invest in content that positively impacts their buying intent. Shoppers in the mid-stages of the sales funnel are frequently open to being influenced in this way. They’re ready to buy and looking for guidance. Why not use this opportunity to gently nudge them towards a more expensive product?

Product comparison pages are the ideal place to do this. Why? Because of today’s economy and the abundance of available products, people are spending more time evaluating different solutions.

Essentially, today’s shoppers are prioritizing value when making purchasing decisions. In fact, purchasing habits are rapidly changing in 2022, and more and more people are becoming cost conscious. With this in mind, creating content that will help your audience make the best shopping decisions will ensure that your products deliver the expected value and that your buyers have a positive experience with your brand.

Increasing conversion rates

But the best thing is that you can also use these pages to get web visitors to convert more quickly.

By doing something as simple as encouraging potential customers to shop directly from your product comparison pages, you can effectively lower the number of touches it takes between your audience becoming aware of your brand and them turning into customers.

For a great example of a sales-oriented product comparison, check out Amerisleep’s Memory Foam Mattresses page. 

As you can see, the page displays three products side by side, helping customers make the best purchasing decision. But what stands out is that the website’s UI allows web visitors to start their purchasing process right on this page, even providing a functional feature that gives them a chance to choose between the all-foam and hybrid foam + coils version of the mattress.

Source: amerisleep.com

Offer a Free Shipping Threshold

For a more traditional approach to boosting AOV, why not decide to offer a free shipping threshold in your e-commerce store? This strategy is guaranteed to pay off, especially if you consider the latest data on consumer behavior.

According to Jungle Scout, 71% of people prioritize shipping prices when deciding what products to buy. Moreover, free shipping is one of the top three factors driving people to buy online. And most importantly, if you wish to boost AOV, 58% of people make sure to spend enough to qualify for free online shipping

So by doing something as simple as setting a “target” sum higher than your current AOV, you can effectively encourage shoppers to spend more.

Letting your potential customers know there’s a free shipping threshold can be as easy as adding a banner to your homepage. For example, check out how Lego did it.

Source: lego.com

Or you can go with a slightly more complicated (but more exciting) approach and add a free shipping threshold calculator to your checkout pages. Velour offers a great example of this on their checkout page.

Source: velourstore.com

Create Products out of Bulk Orders

If you sell a specific category of products, a single item (most likely) won’t be enough to meet all of your customers’ needs. 

So why not eliminate the guesswork from the shopping experience and create bundles that will give your customers everything they require and positively impact your e-commerce store’s AOV?

By taking some time to prepare product bundles for large orders—and maybe even creating dedicated landing pages for these bulk product orders—you can effectively improve your audience’s shopping experience and boost your profits.

To see this strategy in action, visit the Sola Wood Wedding Flowers page. 

This brand created a landing page around its wedding-themed products, allowing web visitors to purchase premade bundles. These bundles include all the bouquet types that people use at weddings, as well as kits that consist of multiple product types for those customers who wish to design their own wedding flowers.

Source: solawoodflowers.com

Highlight Savings through Price Anchoring

One excellent way to boost AOV on your e-commerce website is to use price anchoring when displaying your products.

In case you’re not familiar with the concept of price anchoring, it denotes a pricing strategy that compels consumers to base their shopping decisions on (often arbitrary) cues, or anchors, which are supposed to communicate the value they receive by making a purchase.

From a psychological standpoint, price anchoring works because consumers tend to make buying decisions based on the information they encounter first (or the piece of info that’s the most prominently displayed). And scientific research suggests that the best time to use price anchoring is when your target audience is still uncertain whether they wish to make a purchase.

So the benefit of price anchoring isn’t just that you can use it to increase your site’s average order value. It can also be an effective tool for boosting conversions—especially when used on pages that target consumers in the top stages of the sales funnel.

Pricing strategy

But what does this pricing strategy look like in practice?

Well, there are a couple of ways to implement price anchoring.

One way to do it would be to set a higher initial price for your products (thus driving your audience to assign a high value to the item they’re considering). Then, you can offer a discount, making your buyers believe that they’re getting a higher-value product for less. 

This is, for example, what Mannequin Mall does on one of their product pages as shown below. 

Note how the brand uses color and design to draw web visitors’ attention to the fact that the original price is discounted, showing buyers the exact amount they’ll “save” by purchasing an item.

Source: mannequinmall.com 

But discounting products is not the only way to use the price anchoring strategy to drive conversions and increase AOV.

You can also use this tactic to gently nudge your potential customers towards purchasing higher-priced items. It’s what Apple does effectively on its Apple One subscription page.

As you can see, the brand positions the Family plan in the middle of the page. By implementing this design choice, Apple contrasts the Family plan with the slightly cheaper Individual plan (but points out it provides more savings) and the considerably more expensive Premier plan that offers perks that aren’t necessarily appealing to all people.  

The result? Most people choose the middle plan, spending more than they initially would have, had they only been presented with the Individual subscription option.

Source: apple.com

Utilize Smart Cross-Selling and Upselling

For a slightly more traditional approach to increasing AOV, it’s not a bad idea to look into cross-selling and upselling.

These two sales tactics effectively boost AOV because they represent a great way to personalize shopping experiences. (And that is what 71% of consumers want from brands, according to McKinsey.)

Essentially, by offering products that have a logical relationship with the item web visitors are viewing, you can actively increase the chances of those web visitors buying more products or opting for the more expensive items.

To ensure that this tactic works, there are two things you need to do.

When cross-selling, you have to make it clear how the suggested products complement the base items. For an excellent example of cross-selling in action, check out Nomad’s Base One Max page.

On the product page for its latest charging station, this brand includes a disclaimer stating that the item requires a 30W adapter. Then, right below that section, it allows potential buyers to add that adapter to their carts. And that’s all without having to leave the page they’re currently looking at.

Source: nomadgoods.com

When upselling, on the other hand, the way to make it work is to explain, in detail, the extra value your audience will be getting by opting for the higher-priced product. This can mean: 

• listing additional product features/benefits
• pointing out unique design features
• simply calling attention to limited availability

For example, Away has a stellar upselling strategy that invites web visitors to compare their standard Carry-On suitcase with the more advanced Bigger Carry-On. 

When potential buyers click on the CTA located at the top of the product page, they’re presented with a pop-up. This element informs them about the differences between the two products, clearly positioning the more expensive one as the better option, highlighting its features, and labeling it as the “most popular” option.

Source: awaytravel.com

Make Selecting Add-Ons Intuitive

While we’re on the topic of boosting AOV through cross-selling and upselling, there’s one additional hack that will help you encourage your web visitors to spend more in your store: fully optimizing your website’s UI to make selecting add-ons logical and intuitive.

So what does a well-designed upselling/cross-selling strategy look like? Well, there are several looks you could go after.

One option would be to add a “related products” section to your product pages, and you can see a good example of this on Mr. Porter’s Drill Straight-Leg Trousers page. 

As you can see in the example below, when looking at a pair of formal trousers, web visitors are also presented with the corresponding blazer, a color-matched shirt and socks, and even a pair of shoes that will complete the look.

Source: mrporter.com

Alternatively, you may wait until your web visitors are looking at their carts. That will make it easier for the extra value offered by add-ons to stand out. This is what Fellow does on its website, inviting shoppers to “complete [their] coffee corner.”

Source: fellowproducts.com

However, if both of these design features seem like too much work for something that might not result in higher profits (spoiler alert: yes, it will), you could also go with a more pared-down design direction. You can find a great example on this Fire Pit Surplus product page.

This brand’s product pages present shoppers with several add-on categories (like rocks, burner covers, protective covers, etc.). So by using a simple drop-down menu, people can choose whether they want these extras included in their order. If they do, they get the opportunity to easily pick the color and materials, all without having to leave the main product page. This, in turn, helps minimize cart abandonment rates.

Source: firepitsurplus.com

Offer a Discount on an Entire Transaction

When deciding what products to invest in, most consumers want to save as much money as possible. In fact, research from Statista shows that:

• 64% of buyers delay purchasing items until they go on sale.
• 59% of consumers search online for promo codes to get a better price.
• 37% will intentionally leave items in their cart, hoping that they’ll get a discount from the store.
• 30% use price-tracking services in order to save money.

Considering this data, it’s clear that, when targeting customers in the final stages of the sales funnel, offering discounts makes for an excellent incentive to encourage conversions.

But what can you do to use discounts in a way that will also increase the average order value in your e-commerce store?

One excellent option might be to offer a one-off percentage discount on an entire order. This will inspire shoppers to purchase more items in order to take maximum advantage of the offer.

Of course, to get the absolute most value for your business out of this strategy, it’s also not a bad idea to create a condition for the terms under which this discount applies. 

For example, you can require buyers to sign up for your newsletter (so that you can use email marketing to nurture loyalty). Or you can make the offer only available to new customers.

To see how this can look in the real world, check out the Brooklinen homepage. First-time site visitors will see a banner promising 10% off their entire purchase, as long as they check out within a limited time frame.

Source: brooklinen.com

Implement a Customer Loyalty Program

Finally, as you look for ways to boost the average order value in your e-commerce store, you might want to look for a few long-term solutions as well.

All the methods discussed above represent strategies that provide instant returns. To see substantial profits, however, you will have to go further than these basics. 

One excellent tactic for inspiring people to spend more with your brand is to develop a customer loyalty program.

This strategy won’t yield results just because return customers spend up to 67% more than new ones. It will also positively impact customer lifetime value, helping you get an even higher ROI out of your marketing efforts by lowering (over time) the customer acquisition cost.

For some inspiration on what a winner loyalty program that boosts AOV looks like, check out the following few brands.

Using points

Nintendo rewards every purchase with Gold Points, adding a gamification element to the shopping process and allowing its loyal customers to redeem these points for exclusive rewards and digital content.

Source: nintendo.com

KURU runs a fairly standard points-based loyalty program that they spice up with a little urgency and FOMO. The brand routinely offers their customers the opportunity to earn additional loyalty points, based on something like an upcoming holiday.

As a result, loyal customers who want to take full advantage of an offer like “3x points in honor of Memorial Day” are incentivized to stack their order and reap an enormous savings benefit later on.

Source: kurufootwear.com

Final Thoughts

As you can see, boosting the AOV in your e-commerce store doesn’t have to be difficult. It does, however, require you to fully understand your audience’s pain points, purchasing motivation, and shopping behavior.

By implementing any of the strategies discussed in this article, you’re sure to see great results. But to ensure you’re getting the most out of each tactic, don’t hesitate to adapt them in ways that will better suit your potential customers and that will be in line with your brand identity.