It’s almost holiday season, and we’re all looking to hit our targets for this year.
The most important target for all Shopify stores always has to do with revenue.
So, what metrics should you focus on to hit your revenue goals?
Average Order Value (AOV) is definitely one of the essential ones. Increasing your AOV means that you provided more value to your customers and they found more products they like in your store.
In this article, we’ll take a look at what AOV is and then show you six proven tactics to increase the AOV of your Shopify store.
What is AOV?
AOV, or Average Order Value, is a metric used by ecommerce businesses to track the average amount spent per transaction. AOV is typically calculated by dividing the total sales for a period of time by the number of orders placed during that same period. For example, if a Shopify store had $10,000 in sales and 200 orders in a month, their AOV would be $50 ($10,000 in sales / 200 orders).
Your AOV is a key indicator of the health of your business; after all, the higher your AOV, the more money you're making per customer.
However, it’s also important to remember that it can be affected by a number of factors, such as changes in product mix or promotions. As such, it's best used as part of a broader analysis of your business rather than relying on it as a standalone metric.
6 tactics that will increase your Shopify store AOV
1. Create a sense of urgency
One effective way to increase your AOV is to create a sense of urgency. You can do this by running time-limited promotions or by using scarcity techniques, such as showing only a few items remaining in stock. When customers feel like they need to act fast, they're more likely to add more items to their cart.
However, there are also some out-of-the-box ways to do this. A visual countdown timer is one of them.
The inclusion of a countdown timer boosted conversions compared to not using one, according to an A/B test conducted by De Nieuwe Zaak, a full-service ecommerce business in the Netherlands. The presence of the countdown timer increased conversions by 8.6%.
60seconds’ visual countdown timer holds an offer for only a minute, which boosts the sense of urgency and drives action.
Here’s how it works:
- A customer accesses a product page on your Shopify store.
- They see the product but are still hesitant to purchase it. Suddenly, they are given a chance to request a 20% discount.
- They have 60 seconds to accept the offer and add the item to their basket at the discounted price after you authorize the deal.
This can help you convert hesitant visitors and encourage customers to add more items to their shopping cart.
2. Bundle products
When customers purchase multiple products together, they often receive a discount that encourages them to spend more. Additionally, bundling products together can make it easier for customers to find everything they need in one place. For example, if you sell ties and pocket squares, you could create a bundle that includes one of each. By offering bundles, you can make it easier for customers to find everything they need while also increasing your AOV.
Here’s an example from Sephora:
3. Upsell at checkout
One way to increase your AOV is to add an upsell at checkout. An upsell is an additional product or service that you offer to customers who are already buying from you. For example, if someone is buying a pair of shoes from your Shopify store, you could offer them a discounted pair of socks.
Upselling can be a great way to increase your AOV and boost your profits. Just be sure to offer products or services that are relevant to your customer's needs and that provide good value.
Here’s an example from Harry’s:
4. Offer product recommendations
Product recommendations can help guide customers to items they may be interested in, and they can also help boost sales of complementary products. Adding product recommendations is a relatively simple process, and it can have a big impact on your bottom line. Plus, customers appreciate being able to see personalized recommendations, so it's a win-win situation.
5. Post-purchase timed discount
Sending a timed discount code to customers after they've made a purchase is a great way to encourage them to come back and shop with you again. It's also an effective way to increase your AOV. After all, who doesn't love getting money off their next purchase?
6. Set a minimum order value to get free shipping
Last but not least, one of the easiest ways to increase your AOV is by establishing a minimum order value for free shipping or discounts. This encourages customers to add more items to their cart so that they can reach the minimum spend and take advantage of the free shipping or discount code. Plus, it's an effective way to get rid of slow-moving inventory!
This is how Harry’s does it:
Shopify AOV FAQs
How do I increase my AOV on Shopify?
Here are some proven ways to increase your Shopify AOV:
- Create a sense of urgency
- Bundle products
- Upsell at checkout
- Offer product recommendations
- Post-purchase timed discounts
- Set a minimum order value to get free shipping
What is a good Average Order Value for Shopify?
If your store's conversion rate is more than 3.2%, you have an excellent Shopify conversion rate. You will rank among the top 20% of Shopify stores if your conversion rate is over 3.2%, and the top 10% if it is over 4.7%.