What is AOV in Shopify?
As a Shopify merchant, you know that one of the key metrics for your business success is the Average Order Value (AOV). AOV represents the average amount of money a customer spends on each order. By increasing your AOV, you can improve your revenue and profitability. In this article, we will discuss six strategies (plus one bonus strategy) that can help you improve your AOV in Shopify, with a recommended app for each strategy.
Is Your Shopify AOV Good Enough?
To calculate your AOV, you can divide your total revenue by the number of orders. For example, if your total revenue for a month was $10,000, and you had 100 orders, your AOV would be $100.
= Total revenue / number of orders
1. Upsell and Cross-sell
Upselling and cross-selling are two effective techniques to increase your Shopify AOV. Upselling refers to offering customers a higher-end product or service than the one they were initially interested in, while cross-selling refers to offering complementary products or services to what they are already buying.
To upsell or cross-sell, you can use various methods, including:
- Product recommendations based on their purchase history or browsing behavior
- Product bundles with a discount for purchasing multiple items
- Add-ons or upgrades at the checkout page
It is also worth mentioning that this technique can be effective in boosting your Shopify conversion rate.
2. Offer Free Shipping Thresholds
Free shipping is a popular incentive for customers to make a purchase. However, offering free shipping for all orders can hurt your profit margin. A good compromise is to offer free shipping when customers spend a certain amount.
Setting a free shipping threshold encourages customers to add more items to their cart to reach the threshold, thereby increasing your Shopify AOV.
While it seems straightforward to implement a shipping threshold it’s important to do it if not it can do more harm than good leading to people giving up on the purchase because they didn’t find enough products ( cart value ) to be offered the free shipping.
So let’s approach what are the best techniques to ensure you implement the correct values on your shipping thresholds.
Your Free Shipping Threshold is Set Too Low
When your threshold is too low, customers easily get free shipping, and it feels a bit less valuable to most people. To tell if your free threshold is set too low, look for the following patterns in your data.
- The threshold for free shipping falls below your median order value.
- An inordinately large number of orders are shipping free.
- You do not see many add-on sales because customers easily reach the free shipping threshold and are not motivated to buy more.
You Have Your Free Shipping Threshold Set Too High
The trend you will see when looking at your company’s numbers will essentially be the opposite of the threshold that is set too low. In this case, you will see the following:
- You see very few customers attain free shipping.
- There is an increase in abandoned shopping carts.
- The distance between what customers spend and how much is necessary to get free shipping is too daunting. Your customers feel no need to add on items to reach the free shipping threshold because it seems unreachable.
To fix this situation, you will need to focus on lowering your free shipping threshold. Your customers will like this move, so be sure you point out the new policy.
The Free Shipping Threshold is Set Correctly
When you align the threshold properly, there will still be some minor outliers. However, the bulk of your orders will be in the acceptable range.
3. Create Bundles and Kits
To maximize sales and provide a seamless shopping experience, consider creating product bundles and kits. These strategies can enhance the value perception of your products and entice customers to purchase more.
Product bundles involve grouping complementary items or offering different variations of a product in a single package. Kits, on the other hand, provide a curated selection of products commonly bought together.
Implementing bundles and kits can increase your Shopify Average Order Value (AOV), but it's essential to note that not all stores will benefit equally. The suitability depends on the nature of your products and customer preferences.
Here are some crucial tips to consider when implementing these strategies:
- Timing: Present the bundles and kits to customers at the right moment during their shopping journey. This could be on the product page, during checkout, or through personalized recommendations.
- Presentation: Clearly showcase the value and benefits of the bundles or kits. Highlight how purchasing the package offers convenience, savings, or a comprehensive solution.
- Customization: Provide options for customers to customize bundles or kits according to their preferences. This empowers them to personalize their purchase while still benefiting from the bundled offer.
- Pricing: Offer a discounted price compared to buying each item individually. Ensure that the bundled price feels like a great deal, encouraging customers to make the purchase.
- Communication: Clearly communicate the existence and benefits of the bundles or kits through various channels. This includes your website, social media, email marketing, and even packaging inserts.
Remember, the success of implementing product bundles and kits depends on understanding your customers' needs and preferences. By providing attractive options and effectively communicating the value, you can boost sales and create a satisfying shopping experience for your Shopify store.
Don’t forget this is also a great way to increase your Shopify conversion rate.
4. Implement Quantity Discounts
Looking for a powerful strategy to increase your Shopify store's Average Order Value (AOV) and optimize your inventory turnover? Consider implementing quantity discounts to incentivize customers to purchase more of the same product.
Here's how quantity discounts can benefit your business:
Encourage Bulk Purchases
By offering discounts for customers who buy multiple units of the same product, you motivate them to increase their order quantity. For example, you can provide a special price for purchasing three or more items. This strategy entices customers to buy in bulk, resulting in higher AOV per transaction.
Drive Revenue Growth
With quantity discounts, you can generate additional revenue by selling larger quantities of products. By encouraging customers to purchase more, you not only boost your AOV but also increase the overall sales volume. This strategy contributes to the growth and profitability of your Shopify store.
Optimize Inventory Turnover
Implementing quantity discounts helps accelerate inventory turnover. By enticing customers to buy more of a particular product, you can reduce the time products spend in stock. This ensures a faster rotation of inventory and minimizes the risk of products becoming obsolete or outdated.
To unlock the full potential of quantity discounts, consider the following best practices:
- Set attractive discount tiers based on the number of items purchased.
- Clearly communicate the quantity discount offer on product pages and during the checkout process.
- Highlight the potential savings and benefits of buying in bulk to encourage customer participation.
By leveraging quantity discounts effectively, you can increase your Shopify AOV, drive revenue growth, and optimize your inventory turnover rate.
5. Offer Loyalty Rewards
Encouraging repeat purchases and boosting your Shopify Average Order Value (AOV) can be achieved by offering enticing loyalty rewards to your customers. These rewards can take various forms, such as points, discounts, or exclusive perks, creating a loyal customer base over time.
This is an advanced step in building customer loyalty. If you are still starting out, consider implementing reviews in your Shopify store first. We have an article dedicated to helping you find the Best Review App for your Shopify Store.
Here's how loyalty rewards can benefit your Shopify store:
Points Accumulation
Implement a points-based system where customers earn points with each purchase. These points can be redeemed for discounts or free products, incentivizing customers to make repeat purchases.
Exclusive Discounts
Offer exclusive discounts to your loyal customers as a token of appreciation. This makes them feel valued and encourages them to continue shopping with your brand.
Early Access to Sales
Grant loyal customers early access to sales or new product launches. This exclusive privilege fosters a sense of belonging and drives them to engage with your store regularly.
By implementing these loyalty rewards, you can foster customer loyalty and increase their Shopify AOV over time. Here are some key considerations:
Clear Communication
Clearly communicate the benefits of your loyalty program on your website, social media, and email marketing campaigns. Explain how customers can earn and redeem rewards to maximize engagement.
User-Friendly Interface
Ensure that your loyalty program is easy to understand and navigate. Provide a dedicated section on your website where customers can track their points and access reward options.
Personalization
Tailor rewards to suit the preferences and buying patterns of individual customers. This personalized approach enhances the effectiveness of the loyalty program and makes customers feel valued.
Timely Reminders
Send periodic reminders to customers about their accumulated points and available rewards. Prompting them to utilize their rewards can drive repeat purchases.
Remember, building customer loyalty takes time and consistent effort. By offering attractive loyalty rewards and effectively communicating their benefits, you can foster a loyal customer base that contributes to increased Shopify AOV and long-term success for your store.
6. Personalize Product Recommendations
Delivering personalized product recommendations to your customers can significantly boost their likelihood of making additional purchases. By analyzing customer data, you can offer tailored suggestions that align with their interests and needs.
Here's how personalized recommendations can benefit your Shopify store:
Relevance and Appeal
Analyze customer data to understand their purchase history, browsing behavior, and preferences. Use this information to suggest products that are highly relevant to each customer, increasing the chances of conversion.
Placement and Timing
Display personalized recommendations strategically on product pages, checkout pages, or through targeted email campaigns. By presenting these recommendations at the right moment, you can capture customers' attention and inspire them to explore complementary items.
Cross-selling and Upselling
Leverage personalized recommendations to suggest related or upgraded products that enhance the customer's overall shopping experience. This approach not only increases the likelihood of additional purchases but also boosts your Shopify Average Order Value (AOV).
Email Marketing
Incorporate personalized product recommendations into your email campaigns. Segment your customer base and tailor recommendations based on their previous purchases or browsing behavior. This personalized touch can drive engagement and conversions.
To implement effective personalized product recommendations, consider the following tips:
Data Analysis
Utilize tools and analytics to gather insights on customer behavior, preferences, and purchase patterns. Leverage this data to generate accurate and relevant recommendations.
User-Friendly Display
Ensure that the personalized recommendations are prominently displayed and easily accessible to customers. Optimize the design and placement to enhance visibility and encourage exploration.
Testing and Optimization
Continuously monitor and refine your personalized recommendation strategies. Experiment with different algorithms, placement options, and content variations to maximize effectiveness.
Privacy and Consent
Respect customer privacy and adhere to data protection regulations. Obtain proper consent and clearly communicate how customer data is used to provide personalized recommendations.
By offering personalized product recommendations, you can create a more satisfying and tailored shopping experience for your customers. This, in turn, increases the likelihood of additional purchases, boosts customer satisfaction, and improves your Shopify AOV.
Bonus Strategy: Napps Mobile App Builder
Looking to skyrocket your Shopify AOV and maximize your revenue potential? We have an exciting bonus strategy that can make a significant impact: the Napps Mobile App Builder.
Introducing the Napps Mobile App Builder, the ultimate tool to elevate your AOV and enhance customer engagement. With this innovative solution, you can:
Elevate Customer Experience
Provide a seamless and captivating shopping journey with a dedicated mobile app powered by Napps. Engage customers through personalized push notifications, exclusive offers, and a user-friendly interface that encourages them to spend more.
Foster Repeat Purchases
Leverage the mobile app's powerful features to drive customer loyalty and repeat purchases. Implement in-app rewards, special promotions, and convenient reordering options to entice customers to return and shop with you again and again.
Tap into Mobile Advantages
Harness the unique benefits of mobile technology by utilizing geolocation, mobile payments, and social sharing capabilities within your app. These features empower you to increase conversion rates and boost your AOV effectively.
Discover the full potential of the Napps Mobile App Builder by exploring our latest blog article, Turn Your Shopify Store into a Mobile App. Uncover how this bonus strategy can elevate your AOV and provide an unparalleled mobile shopping experience for your customers.
Conclusion
Improving your AOV is a critical component of growing your Shopify business. By implementing the strategies outlined in this article, you can increase your AOV and improve your revenue and profitability. Remember to measure your Shopify Store AOV regularly to track your progress and adjust your strategies accordingly. With the right approach, you can create a successful Shopify business and achieve your goals.
What is AOV and why is it important for my Shopify business?
AOV stands for Average Order Value, which represents the average amount of money a customer spends on each order in your Shopify store. AOV is important for your Shopify business because it is a key metric that can help you understand your customers' buying habits and identify opportunities for growth. By increasing your Shopify AOV, you can improve your revenue and profitability.
How can I calculate my AOV in Shopify?
To calculate your Shopify AOV, you can divide your total revenue by the number of orders. For example, if your total revenue for a month was $10,000 and you had 100 orders, your AOV would be $100. The formula for calculating AOV is: AOV = Total Revenue / Number of Orders
What are some common strategies for increasing AOV in Shopify?
Some common strategies for increasing your Shopify AOV include upselling and cross-selling, offering free shipping thresholds, creating bundles and kits, implementing quantity discounts, using exit-intent popups, personalizing product recommendations, and offering loyalty rewards.
Can I use multiple Shopify AOV strategies at once, or should I focus on one at a time?
While it is possible to use multiple AOV strategies at once, it may be more effective to focus on one or two strategies at a time and measure their impact on your Shopify AOV. This can help you identify which strategies are most effective for your business and make adjustments as needed.
How can I track my AOV performance over time?
You can track your Shopify AOV performance over time by using Shopify's built-in reporting features, which provide detailed data on your store's sales and revenue. You can also use third-party analytics tools to track your AOV performance and compare it to industry benchmarks.
Are there any other metrics I should be tracking alongside AOV?
In addition to Shopify AOV, there are several other metrics that can be useful for tracking your Shopify business performance, such as <a href=
