How to Increase Average Order Value

Average order value, often abbreviated AOV, is an ecommerce metric that measures the average amount of money a customer spends per online order. It’s essential to track your AOV closely, like performing a weekly or monthly analysis, because of the insight it provides into customers’ spending behavior. If you notice your AOV stagnating or decreasing, it may be a sign to potentially change certain aspects of your website, mobile app, pricing, or marketing strategy.

Calculating your average order value is easy. Just follow this simple formula: 

• Total Revenue ÷ Total Number of Orders = Average Order Value 

For example, let’s say you generate $10,000 in total revenue during a certain time period. During that same period, you receive a total of 75 orders. Following the formula above, your AOV would be approximately $133 per order.

Average order value can vary dramatically. It depends on factors like your geographic location, what devices your customers typically shop on, and what types of products or services you offer. 

A recent report by Dynamic Yield reveals that the global, overall AOV is around $133, as of October 2024. However, that figure changes when you filter the data by specific industries, regions, or types of devices. For example, the current AOV for jewelry and luxury products is $265, compared to $71 for beauty products, $91 for multi-brand retail, and $194 for fashion and apparel. Mobile users have an AOV of $155, desktop users $161, and tablet users $134.

Now that we’ve defined AOV and talked about why it’s important, you’ll want to create a plan for maximizing AOV. Let’s look at 10 strategies that can help you begin answering the question of how to increase average order value, including some actions your business can start taking today.

Create a free shipping threshold

You can entice customers to purchase more items by requiring shoppers to meet a  minimum threshold before they qualify for free shipping. But where should your business set that threshold? Best practice is to aim for around 30% higher than your average order value. For example, if your current AOV is $50, the minimum order cost to unlock free shipping should be set around $65 ($50 x 0.30 = $15). 

In addition to boosting AOV, free shipping also has another benefit: reducing cart abandonment. That means a higher percentage of customers complete their orders, and your sales revenue increases.

Bundle products

Bundling products, like selling items as pairs or 5-piece kits, can help you increase your AOV. When bundled items cost less than the same items purchased separately, customers feel like they’re saving money by purchasing the entire bundle, which encourages shoppers to place larger orders. To get the most mileage out of this strategy, bundle related items into kits or sets that provide an all-in-one experience for the customer, such as haircare or cooking sets.

Find upselling and cross-selling opportunities

You can increase AOV by seizing opportunities for upselling and cross-selling. If  handled strategically, this practice can prompt customers to upgrade their service or purchase items. Here are a few examples of how to increase AOV by leveraging upselling and cross-selling opportunities: 

• Recommending products based on previously purchased items or items already in the customer’s cart 

• Suggesting low-cost items, like products in the $10 to $30 range 

• Making post-purchase offers, which apps like AfterSell and Zipify can simplify for you 

• Displaying side-by-side product specification comparisons

Create a customer loyalty program

A customer loyalty or customer rewards program can help your business boost AOV by incentivizing larger, more frequent purchases. Creating a rewards program is a great way to not only increase average order value, but also increase customer retention by making shoppers feel appreciated. Here are a few possible strategies to consider that may help to increase AOV with a loyalty program: 

• Offer points programs, where purchases earn points that customers can exchange for free products, discounts, or other perks.

• Offer value-based programs, where customers receive rewards in exchange for referrals, social shares, or other forms of engagement with your brand.

• Offer cashback programs, where customers can earn money back on all or select purchases.

Leverage social proof

Research shows that shoppers may spend up to 51% more on brands they trust. That means you can potentially increase your AOV by building trust with customers. 

One of your most powerful tools for building trust is social proof — a marketing phenomenon where customers are more likely to purchase items if they see that others have already done so. Some examples of social proof include: 

• Positive ratings and reviews

• Client testimonials 

• Awards and other recognition, like being included on “best of” lists 

• Positive news or media reports 

You can showcase social proof on your website or app, along with creating or sharing posts on social media.

Personalize the shopping experience

According to a 2024 report by Twilio, almost 90% of business leaders think personalization will be “crucial” to their brands’ success over the next three years. Meanwhile, McKinsey data shows that businesses can boost revenue by up to 40% when they adopt personalization strategies. Here are some ideas for how to increase average order value through personalization: 

• Make personalized product or service recommendations. 

• Personalize emails, text messages, responses to customer reviews, and other communications with customers.

• Use customer data analytics to gain insights into different market segments.

Provide high-quality customer service

Excellent customer service builds trust, creates an enjoyable shopping experience, and instills confidence in your brand. It also helps increase the average order value, with businesses that prioritize a great customer experience boosting revenue up to 80%. 

Providing great customer service is not only one of the most effective ways to increase AOV, it’s also essential to customer retention. Based on a report by SalesForce, 88% of shoppers say they’re more likely to return to businesses that provide quality service, which is key for optimizing customer lifetime value (CLTV). An additional 73% of customers say they would switch brands after just one negative experience.

Leverage time sensitive offers

One of the simplest yet most effective ways to increase AOV is to apply time pressure using countdowns or limited-time promotions. This strategy is effective because it creates a sense of urgency for shoppers, who don’t want to feel like they’re missing out on hot deals or exclusive offers. 

In addition to using tactics like countdowns and flash sales to create immediate time pressure, you can also employ a long-term strategy by limiting the seasonal availability of items. For example, the McDonald’s Shamrock Shake is only available around the St. Patrick’s Day holiday.

Offer discounts and promotions

Offering sales and promotions can increase your AOV by enticing shoppers to spend more on discounted products. However, to ensure that discounts boost your profits instead of denting them, it’s important to be strategic about how and where you leverage promotions. 

For example, Nordstrom, Sephora, and numerous other brands thank customers with free gifts after they spend a certain amount. Another strategy is to reward customers who meet a certain order minimum, like offering free shipping or 10% discounts on orders of at least $100. Product bundles and “buy one get one” (BOGO) offers can also incentivize customers to order larger quantities or additional items.

Optimize your product pages

Optimizing your product pages is an essential step to increasing AOV. When product pages load quickly, display high-quality images, and provide detailed product information, customers gain confidence in your brand and have a better shopping experience. That means they spend more time browsing your website or app, which creates more opportunities for purchases. 

In addition to improving AOV, optimizing your website can also help you rank higher in online searches, which makes it even more crucial to ensure product pages look polished and function smoothly.

When trying out new ways to increase AOV, it’s important for your business to follow some best practices. Here are (three) strategies that will help you hit your AOV targets while remaining cost-efficient: 

• A/B test different solutions. Compare the success rates of different approaches using A/B testing, like analyzing data to see which version of a product landing page results in a higher conversion rate. 

• Identify opportunities for upselling and cross-selling. For example, you can display additional product offers on your checkout page and “thank you” page after customers complete checkout. 

• Use discounts strategically. Pairing discounts with social proof, like positive reviews or “best-seller” product tags, inspires confidence and encourages purchases. 

While AOV is an important numerical value, it isn’t the only metric your business needs to monitor. Other metrics and key performance indicators (KPIs) that are equally important to weigh include: 

• Average basket size 

• Cart abandonment rate 

• Conversion rates 

• Cost per conversion

• Customer acquisition cost (CAC) 

• Customer lifetime value (CLTV) 

For example, CLTV reflects the amount of revenue generated from a single customer over the lifetime of their relationship with your business. Conversion rates measure how many website visitors or app users click an ad, make a purchase, or take other desired actions.

Increase your AOV with Zip, the free mobile app that boosts your customers’ purchasing power. How it works is simple: 

1. Zip customers shop at your store, app, or website. 

2. Shoppers make frictionless payments using Zip at checkout. 

3. Your business receives the full payment immediately, just like a regular transaction. 

4. The customer repays Zip in a series of installments. 

Zip gives shoppers more freedom to manage their online¹ and in-store¹ purchases, from holiday shopping and everyday items to unexpected bills and subscriptions. And since they can pay securely with just a single tap or click, checkout with Zip is fast and frictionless. That’s why businesses who partner with Zip boost AOV by 46% on average.

What factors affect average order value?

Many different factors can impact a business’ average order value. These factors include where the business is located, what types of devices customers usually shop with, and what type of product or service the business sells. For example, research by Dynamic Yield shows that desktop users have a slightly higher AOV than mobile users.

What is average order size?

Average order size (AOS), or average basket size, measures the average quantity of products a customer purchases from your business per order. While the terms are sometimes used interchangeably, AOS is different from average order value (AOV), which measures the average amount a customer spends per order. Businesses that sell luxury items, such as high-end jewelry or apparel, often have a high AOV despite having a low AOS.

Why does average order value decrease?

Average order value (AOV) decreases when customers shift away from making high-value purchases and move toward purchasing lower priced items. AOV can also decrease during off-season periods when customers are less likely to purchase seasonal products, like bathing suits or holiday decorations. Removing incentives or discounts can also lead to lower AOV, since customers are less likely to make large purchases if they don’t receive any savings or rewards in exchange.

How does average order value impact profitability?

Average order value (AOV) is a reflection of how much customers spend per transaction on average. That means increasing your AOV can also increase your revenue — without the need to spend time or money acquiring new customers. On the other hand, a declining AOV can threaten your profitability, since it means you need more customers to generate the same amount of revenue.