Bonus Material AOV industry benchmark Report Average Order Value is a standard eCommerce measure of the total sales a given item has for the same period a customer has.
Unlike other metrics like revenue per visitor (RPV), average orders are measured independently. Often eCommerce teams emphasize the importance of conversion rates and ignore the AOV.
If you’re looking to find out more about how to effectively sell software online and quickly increase your conversion and retention rates, turn your attention toward trustworthy eCommerce solutions. These systems will equip your business with innovative tools to keep those metrics up.
What is a good average order value?
An eCommerce retailer such as Amazon typically has more orders per order. The beauty industry is worth $60, whereas the health and fitness industries are worth $75, and fashion is worth
$97, retail is about $97, and the home garden is $383.90. Anything less than $75 represents the most common market value. But as with shipping prices, transaction volume, and profit margin are essential factors. Track your data with automatic reports.
How can I calculate the average order value?
AOV is calculated per sale, not sales per customer. If customers make several purchases, each order is recorded separately. Although this does not directly affect the Gross Profit margin, this average order value demonstrates how these numbers are calculated.
Average Order Value Formula
Revenues represent the total orders, Average Order Value. In the last month, you sold 31,000 products on your website. The monthly value is calculated if we divide $3000 by 1000 monthly.
Online shopping provides customers with various online shops and products. An eCommerce retailer such as Amazon typically has more orders per order. The beauty industry is worth $60, whereas the health and fitness industries are worth $75, fashion is worth $97, retail is about $97, and the home garden is $383.90. Anything less than $75 represents the most common market value. But as with all things, shipping prices, transaction volume, and profit margin are essential factors. Track your data with automatic reports.
Increase AOV through your promotion strategy
A good marketing plan will not just increase order volume; it can drive conversions and enhance customer retention. Your sales strategy is ideally positioned as your first step toward improving AOV. This strategy is easily implementable and will take off within one hour and provide quick results. These are the three best AV boosters for your AV.
1. Implement a Minimum Shipping Threshold & Improve Margins
In 2021, free shipment can be ordered by mail. Many customers need to understand that shipping fees explain the decline in shopping carts.
However, the cost of shipping may reduce the profitability of your online stores, particularly if they require shipping on low-priced items. The new strategy to increase order volume doubles the effect of improved margins and AOVs. Install minimum cart value for free shipping.
2. Incentivize AOV to Customers with High Purchase Intent
The above promotional messages will fail, despite customer segmenting on site and offsite behavior and purchasing intentions, and the repercussions will be significant for the company. If your customers don’t understand your product or services, it can negatively impact your business value perception.
So it is crucial to display AOV promotional items only when people want to take advantage. Then, you will find a casual browser whose consumption is minimal and low on purchases will no longer receive advertisements to hurt their impression and increase their sensitivity to price if you retarget.
3. Incentivize AOV to Customers with High Purchase Intent
The above promotional messages will fail, despite customer segmenting on site and offsite behavior and purchasing intentions, and the repercussions will be significant for the company. If your customers don’t understand your product or services, it can negatively impact your business value perception.
So it is crucial to display AOV promotional items only when people want to take advantage. Then, you will find a casual browser whose consumption is minimal and low on purchases will no longer receive advertisements to hurt their impression and increase their sensitivity to price if you retarget.
4. Offer a gift card & guarantee repeat purchases
Some promotions are very well-planned, and they can take on double or triple duty, not only to increase CR and AOV but also to drive repeat purchases simultaneously.
These are some of the strategies. Instead of offering discount coupons for new products and holidays, offer free coupons for purchase incentives. The Ancient Nutrition Program offers gift cards to anyone who buys a $75 item. Not only does it improve cart value, but increases sales for the company as well.
Increase AOV through product offerings
1. Personalize Product Selections to Increase Cart Quantity
Pack products provide simplicity on logistical levels. You could create printed inserts to explain the various products and their uses, and they can also be used to prepare the bundles for extensive sales periods such as BFCM and Christmas.
However, when a package is needed to maximize the value, personal product kit options adapted to customers’ preferences may help you take the process to another level. If you add DSC products into the cart yourself, the total cart price will be relatively low.
2. Encourage higher cart value & repurchases with free samples
Sample products. How can a business develop out of this simple concept? In 2018, the largest e-commerce company backed by a free sample announced its products are priced from $1.28 to $3.50 billion compared to $1.1 billion in the same quarter of 2016.
Samplers allow eCommerce businesses to introduce their clients to new products and increase sales by increasing the average value.
3. Bundle Complementary Products to Improve AOV
Certain things can be combined with others or complement one another in some fields. These are industries that can leverage magic product bundles. It was a personal matter to me that we launched a bundle of products for another client that helped increase average carts by 35%.
Throughout my years of experience as an eCommerce marketer, I believe product bundles drive value for customers.
Bundle deals are ideal for enhancing customer AOV because this makes the customer realize the potential to make a lot less money by bringing a second product to order. If you sell a bundle deal with multiple products, you are not required to offer discounts, but you could encourage customers to buy the item attractively.
4. Gift cards
Gift cards are excellent in several ways. It is also good at encouraging people to order expensive items and also good for them to come back to the store in the future. Alternatively, if someone buys for $200, they can buy them $40 gift cards instead. It’s essential to find a sound gift card amount. It should also not be too expensive for the customers, but the high price will mean you lose money. Around 20% would be optimum for this strategy in general.
5. Discounts over spending thresholds
A third threshold could increase AOV by giving the consumer an advantage when buying bulk or ordering more than one quantity. If you’re using the Free Shipping Limit, you should set a discount threshold much higher than your Average Value for the offer and make sure that the offer reduces the cost of shipping.
Conclusion
You can increase your business with a higher average order value. AOV provides an opportunity for companies to improve margins and grow their business. Use the guide provided and look into what drove changes in AOV for other businesses. Which method would you like to try first?
