eCommerce is the buzzword of today’s internet market. It has revolutionized the shopping trend for all the shopaholics giving them a changed and revised alternative for fulfilling their burning desire to shop. Well, the shoppers are grateful to the invention of eCommerce technology, as they can now select from the huge range of variety of products, compare their prices, and find the best option prior to make up their mind to buy desired products.
Now, here comes the decisive role of eCommerce website owners, as they are the ones who create and implement marketing strategies considering eCommerce trends. Not necessarily every implemented strategies offer desired results. There might be several elements that get affected due to the ups and downs of the eCommerce website. Average order value is one of such elements that get affected as it is directly proportional to the sales and marketing strategy implemented in the eCommerce website.
What is AOV or Average Order Value?
Average Order Value is the metric that can be calculated using elements like revenue generated within a fixed duration and the number of products present in the website. Investigating AOV will help your online store to boost the sales ratio and define the path to the distinct opportunities. Using AOV metrics, you can also analyze the buyers’ persona and build an effective marketing strategy accordingly. It can be a vital factor useful to increase conversion rates.
Will you like visitors visiting your eCommerce website and leaving because they didn’t get they came looking for like no discounts, no exciting offers etc.? AOV is the key that upholds the popularity of your online store and improve revenue generation practices. Calculate AOV and build impactful strategies to convert your visitors into regular customers.
AOV Formula
AOV = Revenue generated / Number of orders received
The AOV calculation is very simple yet effective. Once you get the numbered answer, you can subtract the invested cost of your business to get the clear amount of average order value.
Guidelines to Increase Average Order Value
To improve the average order value, you can try out the methods listed below. Again, taking your eCommerce solution in the correct direction will help you receive desired ROI. Build eCommerce website solution containing various features that pushes the average order value to its boundary. Build up a strategy containing methods to implement and increase AOV of your eCommerce website.
Offer Free Shipping
This might not be the super hit formula for eCommerce websites but it is definitely the effective formula that works in every situation and delights every type of user. It’s true that offering free shipping to your customers will cost you more. Managing the shipping process of thousands of products requires more time and money. You can select its alternatives if your eCommerce website cannot really provide it, like special offers, combos, discount on shipping rates, free returns etc. Allowing them to select the type of products delivery they want and charging accordingly might be the best alternative. Try any of them in case you cannot offer free shipping to your loyal customers and increase AOV.
Start Recommending
Upselling and cross-selling are processes you should start doing in your eCommerce website. Recommend the related products to your customers to increase the sales ratio, which will ultimately increase the average order value. Cross-selling technique is widely used in eCommerce websites while up-selling is generally used for companies selling software solutions and related services.
Avoid making silly mistakes like recommending computer hardware products to the person searching or buying apparels. You must recommend related products to get the desired outcomes. Suppose, they have playstation gaming console in their shopping cart, then offer them games game CDs, headphones etc.
Offer Rewards Points on Buying
Giving reward points to customers on shopping products worth some specific figure is the latest trend. Reward them with point for anything they buy, as it really works. Allow them to redeem the reward points on their next purchase. Decide the creative and interesting method of redemption of the points collected by your customers, which will tempt them to return to your website and make their next purchase in order to redeem their points. This will help them stay tuned with your store.
Provide Discounts on Minimum Purchase
This is another successful method to increase the average order value. Put a banner on your eCommerce website informing your customers about the discount they can leverage on minimum purchase. For instance, “get flat 20% off on the purchase of Rs. 2000 and more”. Lower down the profit margin and offer discount on the outdated stock will help you make space for new products and get rid of the old ones.
These are the tips that you can apply if you own an eCommerce store that is performing less as compared to earlier. It will not only boost the performance of your eCommerce website but it’ll also improve the revenue generation by enhancing the average order value of the products of your online store.
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