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What Is AOV for Ecommerce? And 6 Ways to Boost Average Order Value (AOV) for Your Store

As an ecommerce business, you want to maximize online revenue. When someone buys a product on your site, it’s exciting. But what if you could earn even more revenue by increasing average order value (AOV)?

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What is average order value (AOV) for ecommerce?

The average order value for ecommerce, or ecommerce AOV, is the average dollar amount customers spend when they place an order with your business.

How do you calculate ecommerce AOV?

Want to know how to calculate AOV? Follow this formula:

Total Revenue / Total Number of Orders = AOV

For example, if you earn \$9000 in revenue and received 90 orders, you could plug that into the AOV formula:

\$9000/90=\$100

In this case, the ecommerce AOV is \$100.

Why does ecommerce AOV matter?

When you hear a lot of talk about the importance of AOV for ecommerce, you may wonder why it matters. What’s so crucial about calculating AOV?

Well, the average order value for ecommerce gives your business a good indication of how much, on average, your customers spend on your products. It can help you gain insight into what they’re buying and how much they’re spending. For example, let’s say you offer five products, priced at \$10, \$20, \$30, \$50, \$100 respectively.

You find that your average order value is around \$25. This information indicates that your customers generally tend to purchase your products on the lower end of the pricing scale. In this example, knowing this information would indicate you need to revamp your marketing efforts to entice people to purchase more higher-end products. As a result, monitoring your AOV can have a significant impact in helping you increase revenue for your business.

How do I increase AOV for ecommerce?

So, how do you increase AOV for ecommerce to boost your revenue?

Check out these six tips for improving your AOV!

1. Use web design to highlight premium products

First on our list of tips for increasing ecommerce AOV is to visually highlight what you want people to buy on your site. Web design plays a critical role in helping your business earn sales — it impacts how people perceive your brand, view your products, and buy them. Your website’s design can also help improve your AOV.

You can use design to help highlight more expensive products to get people to focus on them. For example, Box, a cloud content management and file sharing service company, uses a green box labeled “Most Popular” to draw users to a more expensive plan.     You can use color differences, buttons, and more to help guide people towards purchasing higher-end products.

These subtle design choices can impact what users ultimately choose when ready to convert.

2. Try upselling to increase AOV

Another tactic to help you increase AOV for ecommerce is to upsell products. Have you ever gone shopping and had someone say, “Well, for only \$X more, you can get XYZ?” This upselling tactic is common to get people to upgrade to a more expensive product and pay more. You can use this tactic to encourage prospects to spend a little more money with your business.

For example, let’s say you sell computers. When someone intends to purchase one of your computers, you may try to upsell them with hard drive upgrades or extended warranties. In this example from Best Buy, they offer Apple Care and Microsoft Office when purchasing a MacBook — a prime example of upselling to increase order value.

By upselling, you can get these prospects to add a little more to their cart and increase the AOV for your ecommerce business.

3. Use cross-selling to sell more products

Aside from upselling, another tactic you can try to increase AOV for ecommerce is cross-selling. With cross-selling, you sell products related to the product of interest to increase sales. Here’s another example from Best Buy.

When you shop Apple AirPods on their site, they make product recommendations for related products to purchase with it. They recommend products, an AirPod case and AirPod cleaner.     Cross-selling is a great way to sell more products while increasing the amount spent by shoppers.

4. Offer free shipping for orders over a set dollar amount

Another great tactic to increase AOV for ecommerce is to offer free shipping for orders over a certain dollar amount. This strategy is excellent at getting people to add more to their cart, which increases your AOV. Chewy is a prime example of using free shipping to increase orders.

To unlock their promotion of free shipping, you must spend at least \$49.     In this case, it’s a great way to get people to buy an extra item or two to get free shipping. For example, if someone is about to spend \$45 on dog food at Chewy, they’re more likely to add a \$6 toy to their cart than to pay \$5 for shipping because they’re close to the free shipping threshold. By offering free shipping with a threshold, you can encourage more people to add items to their cart to increase your ecommerce AOV.

5. Offer bundle deals

If you want to increase AOV for retail, consider offering bundle deals. Bundle deals have a massive appeal because it enables people to get multiple products for a lower cost than if they purchased them separately. Manitobah Mukluks, for example, offers a bundle deal where if customers buy one pair of shoes, they can bundle it with another pair and save money.

To encourage bundling, you can create sections like “Frequently Bought Together” or “People Also Buy” to encourage people to add more to their carts.

6. Offer payment plans for more expensive items

If you offer more expensive items, you may want to consider offering payment plans. Many people get discouraged from purchasing because they don’t have a large sum of funds available to buy the product. They can, however, make smaller, more affordable payments.

So, instead of missing out on a bigger sale due to costs, you can encourage more people to buy through a payment plan. Best Buy is an excellent example of offering a payment plan. If we go back to the MacBook example, you can see they offer a payment plan option next to the price.

Seeing \$949 is an intimidating number for most consumers, but \$79 is much more palatable. By using a payment plan, you can secure sales on higher-priced products.