how do you increase average order value on shopify

How do you increase average order value on Shopify?

When running an ecommerce store on Shopify, we understand the skill and passion that goes behind creating and delivering products that appeal to your customer base. However, what if we told you that customers may not even know about all of them, because they weren’t presented with the right ones at the right time.
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Traditionally within ecommerce, we tend to focus on two main metrics; conversion rate, the rate of website visitors that convert into a sale, and the traffic; the amount of people who come to your store. So let’s take this back a step, you're getting customers to your website and a good percentage of them buy from your store, but what if you could get them to buy more when they do convert - say hello to the average order value. This article delves into how to increase your average order value on Shopify stores and convince your customers to spend more with each sale.

What is average order value (AOV) on Shopify?

The average order value (AOV), on Shopify, is the average amount that a customer will spend when they buy on your website. If you are new to ecommerce and are considering Shopify you can read our article all about why you should choose Shopify. The benchmarks for average order value for your business will naturally vary based on the average cost of your products i.e. if your product's average price is $2.99 then you can expect your average order value (AOV) to be lower than a Shopify merchant whose average price is $100. When trying to optimize your average order value you should ensure that you have a good conversion rate otherwise there may be some fundamental floors in this statistic and you need to consider if you are getting enough traffic to your site to have enough data to truly understand what the average person spends. We would always recommend to focus on improving the conversion rate and traffic before deep diving into improving your average order value, besides the most important factors are getting customers to buy at all.

Why is average order value important for Shopify stores?

Average order value is an incredibly important metric as it’s the sole measure of how you track the worth of each customer you receive to your store and also a way to track how your efforts to improve the amount each customer spends too. For example let’s say the average price of your products is $5.99, you get around 1,000 customers per month and 4% of those convert into a sale. On average customers buy three products which equates to an average order value of just under $20. You can expect sales of around $800 per month. You can then use the current average order value of $20 as a benchmark to start improving upon. We’d advise you to implement new changes and re-assess the average order value (AOV) again every month and keep track of it in a spreadsheet so you can clearly see what’s working and what’s not. We’d definitely advise you to see if you can find any information on what the average order value is for your industry too as they will be vastly different between business types But the big question is “how do you increase your average order value (AOV)” in the first place?

How do you increase your average order value on Shopify?

There are a number of strategies that you can use to increase your average order value and it will be up to you to think what is the most appropriate to your business and what you hypothesize will work best with your customers. Don’t be afraid to try multiple, and replace ones that haven’t made a difference. The following strategies are all centred around two core principles: A) incentivising customers to buy more whilst also delivering and informing customers of other potential purchase opportunities. Remember the average customer will spend less than a minute on your website, they may never even see the products they might have purchased. So here’s a few ideas you can try . . . let us know how you get on!

Selling product bundles on Shopify.

Product bundling is a great way to tempt your customers by buying multiple products at once. A great way of increasing average order value on Shopify as it presents an opportunity for customers to see two of your products - usually at a reduced rate. Not only does it allow you to incentivize spending more with multiple products, but sets or bundles are a great way to immerse customers in more of your product range. We often observe that many customers will miss products that they would otherwise buy - product bundling is a great way to expose more of your product range. In order to track inventory it’s important to try and keep the individual SKUs being added to the cart rather than creating a new product all together to embody both products. Product bundling can be a challenge on Shopify, however there are a number of apps that allow you to achieve this. For example ‘Shopify Product Bundler’ which displays a bundle widget on individual product pages. With some additional development, we can even show individual product pages that display just the set alone. Get in touch if you’d like to discuss rolling out stand-alone product bundle pages.

Cross-selling and upsells to increase average order value.

Cross-selling and upselling on Shopify is one of the best ways to improve average order value. Upselling involves persuading customers to upgrade to a higher priced product compared to cross-selling which involves suggesting complementary or suggested products after a customer has shown intent to buy a product already. There’s a number of ways to roll out cross-selling and upselling on your Shopify store.

Shopify includes “you may also like” suggestions in all themes which intelligently suggests products unique to the customer. The factors that Shopify’s algorithm uses does depend on the plan that you subscribe to. We recommend to show the Shopify “You May Also Like” section on product pages to allow customers to view products they have clicked on whilst being suggested other products too. You can also use this section across content driven pages too; such as your story page, blog and more - a great way to bridge your content and ecommerce funnel.

Another option you have is to utilize a pop up when a customer adds an item to the cart or when they click the checkout page. Although there are some apps on Shopify's app store, we often recommend building these out from scratch so you have full control over the user experience. It is important not to overwhelm customers with an extended checkout process otherwize you do risk increasing cart abandonment rates. We design and developed a cross-sell popup for Doisy and Dam; when the customer adds their first item to the cart, note if they are to add any more items to the cart then this pop up does not display to avoid over-bombardment.

upselling pop up

We love how Native offer an awesome upsell pop up, as soon as a customer adds an item to the cart they are shown the upgrade pop up to upgrade with a discount, this has the potential to take a $12 sales to a $30 dollar sale.

cross-selling pop up

So your customer’s placed their order and just when you think it’s all too late to increase the average order value on a Shopify order the “Upsell After Checkout” app is great tool that allows you to suggest a final cross-sell after the purchase is complete on the Shopify ‘Thank You’ page.

Finally, one of our favourite cross sell sells is ‘Frequently Bought Together’ championed by Amazon. Frequently Bought Together involves suggesting another product on an individual product page that is recommended to be purchased at the same time. The UI of this should include one single add to cart button to allow customers an easy way to add more to the cart with a single click - a great easy way to increase average order value on Shopify.

frequently bought together

Incentivize spending more with price milestones

A great way to increase average order value on Shopify is to simply offer incentives for when they do so, you don’t need to hide the fact you want them to spend more. A progress bar directly in the cart is a great way to offer incentives such as free shipping. We recently built a free shipping progress bar for Doggy Squad, a designer dog accessory brand based in London. Other incentives can include discounts, free gives or free express shipping too.

progress bar

However, it is incredibly important to try and offer a seamless UI to deliver your promotion. For other merchants we’ve added dynamic prompts below the product names that remind customers of the deal they can achieve. As a general rule, we always strive to remind customers of a promotion they can achieve when they spend more at every level of the journey to checkout.

Using Loyalty To Improve Average Order Value On Shopify

Everybody knows that delivering previous customers to your store is much more cost effective than acquiring new customers. Loyalty schemes can be an incredible way to not only improve customer retention but also increase the average order value when they do spend. In the same way that you grab that mars bar in the queue at the supermarket, spending on a store that you know you can use previously redeemed points to receive a reward maximizes the chances of a higher spend with complementary products. One of our amazing loyalty partners, LoyaltyLion, have countless case studies of how they’ve helped world-leading Shopify and Shopify Plus merchants improve average order value online. Neom Organics saw a 45% increase in average order value since rolling a loyalty scheme to their customer base with Loyalty Lion.

Using customer service to improve average order value.

Customer service can often be an incredibly time consuming requirement that is all part of running a successful Shopify or Shopify Plus store, however we need to remember it’s a huge opportunity to improve average order value. Think about it, every time a pre-sales or post-sales customer reaches out is a chance to educate them and tell them about more products. For example, providing advice on a specific product - why not recommend another to go with it alongside a unique discount code or similarly ask the customer if they wish to join your newsletter for future purchase opportunities. Gorgias is the leading customer support tool for Shopify, Marine Layer saw a 75% increase in orders following the launch of customer support powered by Gorgias. We recently wrote an article all about the power of customer support with Gorgias.

Summary: How to increase average order value on Shopify and Shopify Plus.

So that’s a wrap, we hope this article provides you some direction on how to increase average order value on your Shopify store. Do visit the Shopify App Store and search for “Upselling” or “Cross-selling” as there is a wide variety of apps that have some awesome features. Alternatively, if you already have a Shopify store then our membership offering could be great to support your business with access to our entire ecommerce team to roll out amazing features that will help you improve your average order value month after month.

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