7 ways to boost e-commerce revenue and drive higher AOV
When building your ecommerce presence online, it can be tempting to continually focus on developing new customer acquisition strategies as a primary growth driver. As important as this may be, it shouldn’t come at the expense of maximizing the value existing customers can recognize in your shop. This can be facilitated through various initiatives that we will outline below that will help align your product offerings with specific customer needs. To make this better, this can often help to increase your overall AOV!
- Cross-sell opportunities
Whilst seemingly a simple concept, cross-selling is often executed poorly. The most effective way to cross-sell successfully is by offering items that will add value to the customer’s experience, rather than displaying a range of unrelated products. Customers need to view cross-sell promoted products as a personalised shopping experience. Executing well will build trust with your customers, another important element which we discuss below.
- Up-sell opportunities
Data provided by Shopify shows that first-time customers are 27% likely to return, but after their second or third purchase, the probability of return grows to 54%. As you learn more about your repeat customers you can surface higher-value products as part of their purchasing journey; or in marketing emails. The brand loyalty you’ve built up with these customers will improve the effectiveness of this strategy, thereby boosting AOV, and there is less risk of putting these customers off with higher price-tags for premium products.
It’s not all about up-sells! High value purchase decisions are typically very involved. However, once the purchase decision has been made, surfacing related and lower value products on late check-out pages can be a particularly effective way to increase basket-size with low effort. Top tip: leverage the data you have from previous sales to ensure you are presenting relevant products to your customers.
- Minimums for free shipping
Offering free shipping can immediately improve checkout conversion. Research carried out by Canada Post shows that 70% of shoppers say they’d shop more often with a merchant if they were offered free shipping with a minimum purchase. By setting a minimum threshold, customers are encouraged to spend more in order to qualify. Top tip: make it very clear throughout the shopping experience how much more the customer will need to spend before they qualify for free delivery.
- Minimums for discounts
Similar to offering free delivery, offering a discount to customers when they spend over a certain threshold can quickly boost your AOV. Put simply, customers are happiest when they feel like they are getting a good value for their money. Discounts can come in a variety of shapes and sizes. Without getting into the deep psychology of discounts (..phew!), showing customers a clear money saving opportunity and a defined goal to achieve it is proven to positively impact shopping behavior.
- Display bestsellers
Use your own data and experience to display current top-selling items to customers. Leverage on-trend styles or products to improve customer conversion and shift your sales mix toward higher demand (and higher price!) items.
- Bundle products and offer discounts
Incentivizing customers to save money by buying more is a proven sales tactic for increasing basket size. However, when using this technique you need to be mindful of the type of products you are offering as part of the deal. Essentials are a good product to employ this sales strategy since frequency of purchase is high and customers will respond favorably to buying in bulk. Getting this right will help to build trust with your customers which will lead to more repeat purchases and the propensity to spend on higher value items.
- Use web design wisely
With all of the strategies highlighted in this list, one of the most important things is to make sure customers are easily able to identify the value proposition. If it’s free shipping, do your best to make it abundantly clear throughout the shopping experience that they need to spend $X more to qualify for free shipping. If you’re trying to encourage a bundle purchase, clearly display how much the customer will save by purchasing the bundle vs the individual items. By making it plainly obvious to the customer you will give yourself the best chance of turning strategies into proven levers for driving additional revenue.
- Flexible payment options
(Watch out for the plug..!)
Finally, give customers the choice. Paying in bulk doesn’t suit everyone. By offering customers a choice of flexible payment options you’ll cater to the broadest number of customers.