Average Order Value, or AOV, is one of the many acronyms an e-commerce company has to become familiar with these days. Put simply, the AOV is the average amount your shopper spends on their order.
As Splitit continues to work with multiple businesses throughout a multitude of industries, it’s become increasingly clear that AOV is a critical component of success. Since the higher your AOV the higher your overall revenue is, it certainly pays to focus on this crucial metric. The calculation for AOV is simple: you divide your sales revenue by the number of sales. What’s not so simple? Knowing specific strategies you can implement as a way to increase the AOV, thereby increasing your revenue.
Today we are specifically focusing on increasing your AOV on the Shopify platform. Shopify is the cloud-based system that allows businesses to process and ship e-commerce orders. In 2019, Shopify surpassed 1,000,000 in number of merchants using the Shopify platform, proving it’s a giant in the e-commerce world.
If you have a Shopify store, or are considering adding the platform, there are clear-cut steps you can take to increase your average order value. Here are the recommended top strategies for your online store you can start implementing right away.
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1. Recommend Products to Your Shoppers
No matter what type of business you have for your online store, most likely you carry more than one product. Often, shoppers need a little nudge when it comes to thinking of related products. A great way to increase your average order value is to take the guesswork out of related products for your shopper by offering additional product recommendations.
You can do this several ways:
- Put together entire looks or packages so the shopper has everything to complete the look
- Suggest the accessories needed to make a better user experience
- Show other items shoppers have purchased or also considered
By recommending additional items, you can cross- sell (offering items to compliment the item your shopper is considering) or upsell (recommend a more expensive item that your shopper wasn’t originally considering). Either way, you’re creating a chance to increase your average order value on Shopify.
2. Create a Customer Loyalty Program
Creating a customer loyalty program is a surefire way to improve your average order value on your Shopify site or through Shopify apps. While customer loyalty is a complex matter, by not participating in a customer loyalty program could potentially mean a loss on sales. Shopify makes it even easier for a business to create a loyalty program through the use of the Loyalty, Referral and Rewards app.
Common examples of loyalty programs include everything from sending your customer a coupon on their birthday to creating a system of rewards based on points. Most offers only require an email address to signup. Not only can you create a loyalty program tailored to your shoppers, but you can also build up your email address distribution list.
3. Gain the Customer’s Trust
For a new customer (or repeat shopper) to increase your online store’s average order, you first need to gain their trust. There are multiple ways to achieve this, especially while using Shopify.
One way to gain trust is to add product reviews so the shopper has a better understanding of how the product can fit into their life. Shopify offers a plugin to make product reviews a cinch to setup. It’s a simple, yet impactful way to help move your customer along closer to checkout.
This is another area where having your customer’s email address is helpful. You can send your customer important product updates or other news of interest, and in turn, continue to gain their trust. You can create an email campaign based on best practices for Shopify users, using such techniques as targeted campaigns and strong call-to-action (CTA).
4. Provide Incentives for Increased Orders
There are several ways to convince your customers to spend a little more before they decide to checkout. One way is to provide an incentive to increase their order. This can come in the form of an additional discount, such as $40 off a purchase of $200 or more. Or the incentive could be a free shipping offer with a minimum purchase. There are several ways to reward your shoppers for increasing their order.
Although Free Shipping is an extremely common incentive, there is evidence it’s still an effective tool for solidifying orders. A Walker Sands study from 2018 found 79% of US consumers surveyed said free shipping would make them more likely to shop online, and continues to be a top incentive for shoppers.
Shopify allows you to easily manage your shipping rates or offer free shipping altogether. To start the process, you can follow the steps through the Shopify help center. But the most important step is to follow up after you provide the incentive and analyze which one your shoppers responded to the most.
5. Pay Attention to Analytics
One of the best benefits of creating a Shopify store is the access to the analytics you’re provided. You have a dashboard which allows you to view your shopper’s shopping preferences, identify new customers and review full order history. You can put these analytics to good use by using them to fine-tune your marketing and promotional campaigns. Shopify also works in tandem with Google Analytics allowing you to see a real-time snapshot of what’s happening with your online store.
If you’re worried you’ll suffer from “analysis paralysis” every time you log into your dashboard, you can start by concentrating on one metric. For example, you can analyze your sales and increase in average order value while you offered a free shipping promotion. Then you’ll have a better understanding of when to run a similar campaign — or when not to run a particular promotion.
6. Offer Splitit as a Payment Option
Offering a monthly installment plan, such as Splitit, not only offers your shoppers a convenient way to pay, but it increases your average order value. For your shopper, it gives them a chance to pay for their items over time and without any added interest. Since Splitit uses the shopper’s existing credit card, there’s no need for additional paperwork or credit check.
Shoppers aren’t the only ones benefiting from Splitit, though. Store owners see up to a 20% increase in average order value by offering Splitit, and an astounding 78% higher cart conversion rate. With economic uncertainty still looming due to COVID-19 and other challenges, you can offer your shoppers a better user experience. The Splitit plugin works seamlessly with your Shopify platform, allowing better results for you and your shoppers.
With a little extra attention on your average order value on your Shopify store and Shopify apps, you can increase your AOV and your sales. The strategies are simple and straightforward, but like so many other aspects of business, just takes a little extra focus. Splitit understands the challenges store owners face, and is ready to help you create the best experience for your shoppers while increasing your AOV.
If you’re ready to increase your average order value, contact us for a free demo to find out more.
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