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5 Time-Tested Tactics for Shopify Stores To Increase Average Order Value

Iyabo Oyawale May 29, 2022 5 minutes read

Do you know that it costs five times as much to attract a new customer than to keep an existing one?

Do you also know that the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%?

Do you know that existing customers are 50% more likely to try new products and spend 31% more, when compared to new customers?

These are findings from a study on Customer Acquisition Vs. Retention Costs by Invesp, a customer rate optimization (CRO) company.

So, what is the way out for eCommerce merchants? How do you increase revenue without costs? 

Your best bet to increase revenue as an eCommerce brand is to sell more to existing customers. And, that is where AOV comes in.

What is AOV in eCommerce?

AOV stands for average order value and it’s a metric for measuring the average total of every order placed with an ecommerce merchant over a defined period of time. AOV is one of the most important metrics for online stores that want to grow. 

It’s a vital measurement tool for eCommerce merchants who’re interested in making informed business decisions around store layout, marketing/pricing strategies, and advertising budget.

How to Calculate AOV

To calculate your company's average order value, simply divide total revenue by the number of orders. For instance, let's say that in the month of January, your web store's sales were $41,000 and you had a total of 1,000 orders. $41,000 divided by 1,000 = $41, so January's monthly AOV was $41.

AOV is calculated using sales per order, not sales per customer. Even if a customer comes back multiple times to make a purchase, each order would be factored into AOV separately.

The higher your AOV, the more you are getting out of every customer — and as a result, out of every dollar spent to acquire those customers.

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Why is Average Order Value Important?

1. It Provides an Increase in Income and Profit

A rise in your average order value leads to an increase in income and profit. The more you earn per order, the more your business makes altogether. If you can see a positive change in average order value, you’ll be able to reinvest more money into your business and keep part of the profit. 

2. It Provides a Cost-Effective Marketing ROI

A rise in your average order value leads to an effective marketing spend. If you spend $30 on acquiring a customer and the average order value is only $60, you haven’t earned much after you take care of product costs and taxes. But, as you effect strategies for a positive change in average order value, your marketing spend becomes more effective. 

3. It Enables You Sell More Inventory

The more products you sell per order, the more inventory you sell, whether you carry stock for a brick and mortar store or even an online store. By making changes to see a boost in AOV, you’ll be able to sell more of the products in stock.

So, How Do You Increase Average Order Value on Your Shopify Store?

1. Cross- Selling

Cross-selling is an effective way to ramp up your AOV. It enables you to make more money from your online store.  It enables you to retain customers and deepen their loyalty.

What is Cross-Selling?

Cross-selling is “the action or practice of selling an additional product or service to an existing customer. The objective of cross-selling can be either to increase the income derived from the client or to protect the relationship with the client or clients” (according to Wikipedia).

Zoorix is one of the apps you can use to increase AOV. It offers a slider widget which you can use to cross-sell. The slider can be shown on the product page, and/or on the cart page. See the slider widget in action below:

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2. Offer Product Bundles

Bundles are used to upsell products.

The Dos and Don’ts of Product Bundling

* Don't pair inexpensive items with premium products or services.

* Emphasize the savings shoppers stand to make.

* Bundle items commonly purchased together.

* Recommend products to your customers.

To make this easy, Zoorix offers a bundle widget. You can define a group of products that are shown together in the bundle widget. If the buyer buys them all together using the "Add Bundle" button, he/she will get a discount.

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3. Provide Volume Discounts

Providing volume discounts puts shoppers in the mood to buy. You can offer a discount or free gift. “Spend $70 and get 10% off”, “Only $20 more to save 15%”. Pop-up or promotion bars are needed to tell visitors about this promo. This is where the Zoorix app comes in.

The Volume Discounts enable merchants to offer a dynamic discount according to the quantity of items purchased, e.g. 10% discount for 10+, 20% for 20+ and 30% for 30+ items. The Volume Discounts offer can be configured to have a discount table on the top and also supports adding multiple variants.

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4. Offer a Warranty

Shoppers feel better protected when they’re offered warranties. eCommerce brands can also increase their AOV by integrating warranties into the customer purchase path, thus increasing their bottom line revenue and resulting in customer lifetime value (CLTV) uplift.

Overall, there is a vast benefit to offering your customers a form of warranty at checkout, given shoppers’ propensity to opt for protection. 

Zoorix’s warranty widget is an innovative upsell option. The buyer can add the warranty item to his cart, and get a warranty on his product. You decide the terms of the warranty (1-year, lifetime, whatever you wish). Zoorix will then send an email to the buyer with the redemption link if they break it, and you have a moderation portal in which you can see the image uploaded by the user and approve or reject the warranty request. 

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5. Provide Free Shipping

Set a minimum order value that qualifies for free shipping. Once the threshold is met, the order ships for free and as expected; the online merchant makes more sales. The key challenge is obviously how to entice consumers to add more products to the cart so that the cart meets the qualification criteria, while at the same time, minimizing the risk of cart abandonment, which could be the outcome if the process is perceived as too laborious. One tool for this is Zoorix’s Cart-Drawer.

The Cart-Drawer is a pop-up cart that can contain the slider widget with suggested products for the purpose of cross-selling. It also has a feature of free shipping or free discount if the buyer gets to a certain spent money threshold.

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Zoorix ‑ Upsell & Cross Sell
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