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Shopify decoded: How to increase average order value

Picture this, traffic to your site is high, conversion rates remain strong and bounce rates are relatively low – in short, your website is doing what it should. Naturally, you are still looking for incremental improvements to increase revenue but where is your next area of focus?

Rewind 2-3 years and a possible solution might have included increased new customer acquisition spending but with CACs rising and the impacts of ISO-14 traditional digital channels can feel less appealing.

Instead, we are going to look at average order values (AOV) to see how you can configure your Shopify Store, lean on its inbuilt functionality (and when coupled with good UX) subtly coerce greater revenue from customers.

1. Bundling of products:

We have previously written about the benefits of bundling products on Shopify, so we will keep this brief. Bundling products does not typically lend itself to big ticket items but for DTC sellers of FMCG goods (think food, drink, personal care), it offers merchants the ability to create minimum order quantities and offer price savings for customers who spend more – all of which increase AOV.

2. Volume-based discounts:

This works by rewarding customers who buy more products and when they hit a certain threshold, this can either by a purchase amount or quantity of items and comes in several forms: The reward can come in several forms:

  • The user spends X / buys product Z and gets product Y for free or at a reduced price
  • The user spends X / buys product Z and is given a percentage off the cart total.

3. Upsells / Cross Sells

When s customer chooses an item, a suggestion is made for a complimentary product. For example, someone buying a phone might want a charger or case. This model can share similarities to the volume-based discount where a customer might be more included to buy the phone if shown the cross-sell and the phone case is included for free.

4. Post-purchase

This can be delivered by either email, SMS or via the confirmation page post-checkout and contains a time-sensitive discount or product offer.

What are average order values?

An average order value (AOV) is a metric that measures the average amount spent per order on a website or within a particular ecommerce category. AOV is important because it indicates how much revenue a company can generate from its typical customer.

How to calculate a store’s average order value?

AOV can be calculated for an entire website or for specific ecommerce categories. To calculate AOV, divide total revenue by the number of orders. For example, if a website generated £100,000 in sales from 1,000 orders, the AOV would be £100.

The uses of average order values?

AOV is a helpful metric for assessing growth and determining pricing strategies. For example, if a company notices that its AOV is increasing, it may want to consider raising prices. Alternatively, if AOV is stagnant or declining, the company may need to rethink its pricing strategy or invest in marketing initiatives to attract more customers.


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