How to Increase Average Order Value on Your Shopify Store

If you are an online store owner, you probably do everything to get the highest profit. One of the crucial factors in increasing your revenue is the average value of each order.

Let’s imagine you have 10 customers, but each only spends $10 on their order. What happens when you can convince them to spend more dollars on their order? Surely you will earn more money without incurring extra advertising costs.

Recognizing the importance of optimizing average order value in increasing revenue for merchants, we write this article to help you find ways to enhance average order value on your Shopify store and make customers pay more per sale.

Let’s take a more in-depth look at the article below to understand how to increase the average order value for your online store.

What is the Average Order Value (AOV)?

Average order value (AOV) is a metric measuring the average amount of dollars customers spend for one transaction on an ecommerce website in a given timeline.

AOV gives store owners three things about their customers: spending per order, purchasing power, and shopping habits. Merchants can use this information to plan advertising and sales strategies to increase revenue for their online store.

How to Calculate Average Order Value?

As we know, AOV is a crucial indicator that directly determines revenue, so how do we calculate it? You just need to divide the total revenue of your business over a given period by the number of orders during the same time.

For instance, you wanted to know the AOV of your e-commerce store for a season.

In the summer, your store’s total revenue was $30,000, coming from 3,000 orders. So, your average order value formula would look like this:

AOV = $30,000 / 3,000 = 30

This means that, on average, each customer spent $30 per transaction in this example.

What is a Good Shopify Average Order Value?

A good average order value depends on various factors, such as industry, product pricing, target market, and business objectives.  

To put it simply, a higher AOV is usually considered to be good as it indicates that customers are spending more money per bill, making your profit increase a lot. A high AOV not only means customers are buying more expensive products but also means they’re repurchasing from your online store multiple times. 

Generally speaking, the higher your AOV, the bigger your profit! When customers purchase more with each purchase, it directly boosts your revenue and profit margins.

Best Ways to Increase The Average Order Value on Shopify Store

1. Free Shipping and Discount

Consumers tend to buy more to gain a benefit such as free shipping or a discount.

Indeed, according to a 2023 survey, 60% of US customers want to get free shipping on all online orders. And 80% are willing to buy more products to get that deal.

This is the most compelling reason for you to set a minimum order value to get free shipping and discounts on your online store. Additionally, display a progress bar to let customers know how close they are to achieving that value.

This motivates customers to add more products to their cart to qualify for free shipping or discount codes, effectively increasing AOV.

Ultimately, informing them about your free shipping and discount policies is essential. You can display the notification bar on your website as a sticky or floating bar as long as it attracts the attention of your visitors.

2. Product Bundle

Creating product bundles is a great way to entice your customers to buy multiple products at once and introduce other products to them. These bundles may include items that are frequently purchased together or a combination of premium products and best-selling items.

For example, you’re running a fashion store on Shopify and have a popular dress with costs $100. Instead of selling the dress individually, you can create a bundle that includes the dress and complementary items like jewelry or shoes, offering a 10% discount. Of course, the revenue you will receive from this deal will be significantly higher than the normal one.

Generally speaking, the example above illustrates how bundling products not only helps encourage customers to buy more products but also diversifies the selection available on your online store. Additionally, it also can make it more convenient for customers to find what they need in one place and purchase multiple items at one time.

Ultimately, don’t forget to promote these offers on your Shopify store and highlight the benefits customers can get by taking advantage of these deals.

3. Upsell and Cross-sell

One of the most effective ways to increase the AOV of your Shopify store is up-selling and cross-selling.

Up-selling means encouraging customers to buy higher or premium versions of the product they intend to buy and convincing them that those products meet their needs better.

For example, if a customer visits your store and expresses interest in buying a basic version of the phone, you can convince them to upgrade to a higher version with the same model. By offering attractive discounts or bundles, you can motivate them to buy something more valuable than what they originally intended to buy.

And boom, you are successful in increasing the AOV of your online store and higher profits for your business.

In another aspect, cross-selling means suggesting to customers additional products that match with products they are already buying.

For example, if someone buys a phone from your store, you can suggest they buy a phone case with a 10% discount. They can buy them together as one order, thereby increasing your sales.

4. Customer Loyalty Program

Moving on to the next strategy to improve the average order value of your Shopify store, which is to create a loyalty program. 

Loyalty programs give customers rewards, incentives, and discounts for their future purchases in your store. By tapping into your old customers, you can increase the amount of money customers spend each time they visit your store.

For example, when a customer spends $1000 on your Shopify store, they will get a 10% discount or promotion on their next purchase. In this way, you can encourage customers to come back and make more transactions from your store. Additionally, these types of programs build close relationships with customers while increasing customer lifetime value.

To ensure effectiveness, it’s important to ensure loyalty programs deliver on consumer preferences and trends. In addition, you should also clearly explain the value these programs bring and encourage enthusiastic participation from customers.

5. Live Chat Support

According to a statistic from 2023, e-commerce businesses that integrate live chat will increase conversion rates by 12%. Being available via live chat also helps improve customer satisfaction, resulting in higher sales potential and fewer abandoned items. In short, live chat is a great weapon to increase AOV for your Shopify store.

For instance, a customer is planning to buy a shirt from your online store, but he wants to be sure of its size before confidently pressing the buy button. In such a case, live chat is the fastest way for this customer to get an answer, and you get this conversion without losing the potential customer.

Furthermore, if you provide a way for buyers to instantly connect with you, you not only help make a one-time sale, but you also foster conversation that can encourage repeat sales.

6. Remarket to Existing Customers

Remarketing is an effective tactic for increasing the average order value of your Shopify store. It uses targeted advertising campaigns to reach previous customers with personalized messages, offers, and promotions designed for them.

This static enables you to further exploit your existing customer data and drive more sales by convincing them to buy more items or valuable products the next time they shop at your store. You can use popular channels for remarketing, such as email campaigns, display ads, and social media ads.

For instance, you are running a furniture store on Shopify and have a certain number of customers. By categorizing customers based on previous purchase value, you can create highly personalized emails to recommend relevant products and discounts. This increases the likelihood of buyers turning around to buy more products.

If you’re unsure how to start this tactic, consider initiating email campaigns targeting previous customers and offering promotions that can be applied to their next purchase. This will help you increase the average order value of your Shopify store significantly.

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Conclusion

In a nutshell, the average order value is an important metric for your Shopify business; understanding the ways to enhance it is necessary. There are many ways to increase the average order value of your Shopify store, such as by offering promotions and discounts or supporting customers carefully. All for the purpose of creating a smooth checkout process, resulting in a significant increase in your profits and AOV.

In this article, we have listed the main ways to help you improve this metric effectively. By applying these tactics to your e-commerce store, you will reap the best results.