How to increase your order value on Shopify in 2022.
(Please note this is when using a Desktop)
The main benefit of increasing the average order value is to make more money with each transaction. The result is a more profitable store. Most customers who shop online only buy what they are looking for. Through some of the average order value strategies we'll share in this article, you'll learn how to offer more great products to your customers. In this way, you can generate more sales from every order. The purpose of this article is to explain what an average order value is and how to increase it. So let's begin...
What is an average order value?
The average value of all your orders (Not including gift vouchers) is divided by the total sum of orders that contained at least one product. Order values include shopping, taxes & discounts before returns.
This value can really benefit you as a business owner to know how much your customers tend to spend on your store and can help you with marketing benefits.
Let's talk about the benefits of increasing your average order before we begin...
1. Increase revenue and profit: As your average order value rises, your revenue and profit will increase. In general, the more you earn per order, the more your business makes. When the average order value of your business increases, you're able to reinvest more money to grow it and you'll be able to pocket more money as well.
2. Sell more inventory: Whether you run a brick-and-mortar store or an online store, you can increase sales by using an average order value strategy. With a higher AOV, you can sell more of the products you carry.
3. Cost-effective marketing return: If you spend £20 on marketing and the average order value is £50, you haven't made much money after you subtract product costs and taxes. However, your marketing spend becomes more profitable as you see an increase in average order value. Hence, the importance of having an average order value strategy in place.
Now it is time to get to what you came here for, our top three tips on how to increase your order value...
1) Offer a free shipping threshold: A free shipping threshold is a simple way to increase the average order value. For example, all orders over £50.00 qualify for free shipping. Calculate your average order value and add 30% to it. In the example above, if your average order value is £100, it becomes £130 with a 30% increase. This new number is what you’ll set your free shipping threshold at. Let us know if you choose to do this!
2) Provide bundle offers: Providing customers with bundle deals can affect your average order value. For example, 'Buy two and get one free' or 'Buy 3 and get a free sample' promotion. Regarding the 'Free sample' this will of course be different for every business depending on profit margins. If you choose to offer a buy two get one free, you need to make sure you price your products in a way that you can afford to cover the cost of the fourth while still making more profit from the bundle deal.
3) Execute first time customer offers: If you are a relatively new brand or even a brand that's well known, you are always going to have first-time visitors. Offering deals to new visitors can help increase your average order value. You can provide this particular audience with a one time offer (Top tip: Offer this discount for a set time, E.g. 12/24 hours) Depending on your business margins it is always great to offer a 10%/15% off order, don't forget to make a requirement of signing up to a newsletter to receive this discount, this will help with later email marketing.
If you have any questions regarding anything stated in our article please feel free to reach out to us on Social media.
Thank you for reading and we hope we have helped you further your knowledge on increasing your average order value.
(PLEASE NOTE ALL IMAGES USED ARE NOT AN ACTUAL STORE OR ONE OF OUR CLIENTS. THIS IS SIMPLY A STORE WE HAVE CREATED FOR THE PURPOSE OF OUR BLOGS)