The holiday season is here and this is the best time to make the most out of it. How can you do that?
One way to increase your sales during this period is to look at increasing the average order value (AOV) since everyone is buying more for themselves or as gifts for others.
What is Average Order Value (AOV) and why does it matter?
Average Order Value (AOV) is the average customers spent on an individual order placed.
The formula for calculating the AOV is REVENUE / TOTAL NUMBER OF ORDERS.
|For example: If your store had a total revenue of $1,000 split between 100 orders for the month of November, your average order value would be $10.
This means that each order is, on average, $10.
AOV is a key performance indicator used to understand customers’ purchasing habits.
Knowing this will help you evaluate your overall online marketing efforts and pricing strategy by giving you the metrics needed to measure the long-term value of individual customers.
Sometimes businesses focus most of their energy on increasing traffic to a website when it would be more profitable to increase their AOV since increasing traffic typically costs money, while increasing AOV does not. Furthermore, there is an acquisition cost per customer and order, increasing your AOV is a way to drive direct revenue and increase your profits when customers are already buying from your store.
So how can you increase your AOV?
To increase your AOV, you must entice your customers to add more items to their cart.
Successful strategies for increasing AOV include:
- Cross-selling: “How about some wine glasses to go with the wine you just ordered?”
- Upselling: “Would you like this bottle of champagne for only $10 more than the one in your cart?”
- Volume discounts: “This wine costs $35, but you’ll save 30% if you buy 2 or more.”
- Free shipping: (for a higher minimum purchase)
- Coupons: “Spend $50 and get $5 off your next purchase!”
- Return policy: “Feel free to send them back if you’re not satisfied”
Here are several of our apps that can help you increase your AOV and sales, especially during this upcoming holiday season.
To entice customers to purchase more items together, try setting up product bundles with a set discount if the items are purchased together.
By providing better value to customers when they purchase the bundle in a form of a discount, they are more likely to make the purchase which in turn increases your AOV.
This works exceptionally well with complementary products since the product bundle saves customer time by removing the need to look for them.
Using our product recommendation app in conjunction with the product bundles app is another wonderful approach to entice your consumers to browse for more things rather than focusing on the one product that they are buying.
This allows you to display products that are related to the primary product that the customers are viewing, you can then recommend the products of your choice or use its inbuilt artificial intelligence ability for easier targeting.
How convenient would it be to be able to just give a link to your wishlist to your loved ones in order for them to purchase a gift directly?
With our Wishlist app, your customers can easily add an item to their wishlist. This makes it easy for them to browse their favorite items and add them immediately to their shopping cart.
If an item is out of stock, adding the item into the wishlists also allows an email notification to be sent when there is a restock reminding them to visit the store to checkout the item. Even better, the system will also notify them when there is a price drop, perfect for your bargain hunters to add more of their favourite items to cart!
It takes more than just marketing and traffic alone to help generate more sales. Thinking of ways to increase your AOV is one of the more effective ways to drive more revenue in the long run but it is often the most overlooked.
This holiday season is going to be great so prepare for it with the tips above and start selling more!