The 2020 eCommerce Merchant’s Guide to Higher AOV
Welcome to 2020. While we’re not yet cruising Jetson-style, we can order just about anything online — from fresh baguettes to a hybrid vehicle. According to U.S. Census data adjusted for seasonal, but not price variation, eCommerce sales continue to climb, hitting an estimated $154.5 billion in the third quarter of 2019.
Digital-savvy shoppers seek customer-centric service, convenience, savings, and payment variety. With so many online merchants selling wares, how do you set yourself apart and increase your Average Order Value (AOV)?
Before answering this, let’s explore the importance of AOV and then look at several ways to increase sales.
What is AOV?
AOV is the average amount your customers spend per order. While it can fluctuate with the seasons, there are steps you can take in 2020 to encourage new and existing customers to spend more.
With increased AOV, your bottom line can thrive from a quality vs. quantity standpoint. In short, you’ll need less orders to reach your financial goals.
How to Increase AOV with Splitit
When eCommerce merchants amplify the ease of checkout, boost perception of value, and remove price barriers, it can trigger increased consumer spending and reduce cart abandonment.
According to a report by eCommerce trend researcher, Baymard Institute, the average global cart abandonment rate is near 70%. One reason? Sticker shock. If shoppers have more options to get what they want for a lower initial payment, they may be willing to buy higher ticket items or opt for items of better quality.
Consider offering an interest-free, buy now, pay later option like Splitit, a unique payment solution that requires no application or credit check. Splitit is the only secure credit card based installment payment solution offering a win-win scenario for merchants and shoppers: merchants are guaranteed to get paid; happy shoppers get what they want, faster.
By offering alternate payment methods of payment like Splitit in addition to credit and debit cards, financing, and digital payment options, your customers have increased buying power. They may not be able to purchase a $500 watch outright, but they are more apt to click and buy today when offered interest-free installment payments over time based on existing available credit.
8 eCommerce Tips for Higher AOV
Offering alternative payment solutions is just one way to boost AOV. Here are eight more tips to help you increase sales:
Options abound here. From simple rewards systems based on repeat sales or tiered programs with spending thresholds to unlock gifts, loyalty programs provide an opportunity for your customer to feel like an elite shopper.
Offer a live chat or personal shopping bot for an interactive experience. Answering questions in real time about products or adding comparison or decision-making tools can guide a well-informed purchase.
Minimum Order Incentives
Guarantee incentives like free gifts or shipping when customers hit a specified amount. Display a tally of the shopping trip. If customers can clearly see they need $X to claim the incentive, they’re likely to add more to the order.
Do your products warrant a weekly or monthly subscription? For repeat purchases, offer a discount when customers agree to an ongoing purchase agreement.
Cross-selling and Upselling
Identify relationships between complementary products and offer suggestions while shopping. Provide visual data to show what other people purchased or consider bundling items. Suggest upgrades by comparing features to showcase value in a similar, higher priced item.
Email marketing, social media, and virtual launches can help your business touch customers regularly. Add value by sharing information about products, offering coupon codes, or guiding product use.
Send Cart Abandonment Emails
Your customer may be pondering prices, but life can also bring distractions. Sending an email about an abandoned cart might be just the push they need to complete the sale. It’s also a good idea to have a series of emails to prompt action. For example, the first email might be a simple reminder, while subsequent emails can offer added discounts as incentives for checking out.
Cart Abandonment Solutions
Improve the flow of your customer’s shopping experience and remove barriers to checkout to increase sales revenue by downloading Splitit’s Ultimate Guide to Cart Abandonment.
Higher AOV: The Bottom Line
Apply these four principles to enhance your customers’ shopping experience:
- Make it easy: Offer a simple shopping and checkout interface with clear return policies.
- Give incentives: Provide free or discounted benefits to reward shopping behaviors.
- Be accessible: Communicate with your customers before, during, and after they shop.
- Offer payment variety: Remove price barriers by offering a buy now, pay later solution like Splitit in addition to what you already offer.
Are you ready to learn how alternative payments can help increase your AOV? Contact us now!