You want your shoppers to buy often and quickly, but above all you want them to buy a lot. Easier said than done, right?
As with pretty much everything else in marketing, increasing Average Order Value just requires some analysis, a good understanding of the available tools and some solid strategy planning.
In this article, you will learn a number of advanced tactics to increase the AOV of your Shopify fashion shop, plus some apps that can automate the processes for you. But first things first.
What is the Average Order Value?
The Average Basket Value (ABV) or Average Order Value (AOV) is the average amount a customer spends for each order. The formula is the total revenue divided by the number of orders. The AOV tells you how much your customers spend each time they place an order.
This metric can vary depending on seasonality and promotional calendar, and is usually calculated on a monthly basis in order to track monthly variations.
Why is Average Order Value important?
Among the other things, because it impacts Customer Lifetime Value and CLV in turn supports your Cost per Acquired Customer. As a rule of thumb, you should aim at a 1:3 ratio between CAC:CLV. The higher the CLV, the more you can afford to spend to acquire a new customer. The more you can afford to spend, the more you can edge out competitors when bidding for traffic. And the fewer competitors advertising on the same space, the more market share for you. Happy times!
Average Order Value on Shopify
Shopify itself provides the AOV for all your shops, so you don’t have to search the data required for the calculation. All you have to do is log into your Shopify admin panel and access the “Analytics” section. The AOV will be listed in the “Overview” dashboard.
Let’s now get into some strategies to increase your Average Order Value on Shopify.
1. Free Shipping after reaching a Minimum Order Value
We all love avoiding the shipping costs, and it’s a great way to incentivize customers to buy more items from your store. For this reason, offering free shipping – over a certain minimum order value – is a simple and effective way to increase AOV.
On top of advertising the offer on the website itself, a few applications such as Ultimate Free Shipping Bars allow you to show the message on a persistent bar across all of your pages, and to display the cart goal within the purchase page. We especially like the fact that the messaging and threshold can be personalized at the country/language level, a quite useful feature for multi-region shops.
2. Offer instant credit as a payment method on your Shopify store
It is becoming more common to give customers the option to finance their purchases and split the payment over several months.
Offering this type of payment method in your store will help you increase the average order value, as shoppers will be more likely to increase their spending by not having to pay for all of it upfront but over a certain number of months.
Klarna is probably one of the most popular Shopify Apps to offer payment in installments to customers.
3. Product bundles
This is an old strategy coming straight from the beauty industry (Do you like this soap? Get yourself 3!), but can be adapted also for some apparel garments. Perfect examples are basic wardrobe items, such as a black turtleneck or white tank top.
Of course, you need to do some research and check which items of your fashion shop are more frequently bought in bundles anyway.
To do so, enter Google Analytics, and go to the Conversions>Ecommerce>Product Performance tab.
From this report, you can see the average quantity (Avg QTY) sold for each product, meaning the items which are more likely to be purchased in bundles. This will help you define which products can be bundled, and always remember to A/B test the new version versus the original one.
4. Buy the look!
Setting a ‘full look’ bundle allows users to easily match items and purchase multiple products at once. This means offering a primary product with its accessories, or multiple products used for creating a specific look.
On the customer side, this technique represents a considerable economic advantage, since two or more products are usually purchased together at a special price compared to the full price of each individual item. Not to mention avoiding the hassle of having to find matching items for themselves.
Remember also the basics of merchandising: product appeal is not a fixed quality – it can actually change depending on the context in which a product appears. Showing an item within a complete look has a completely different effect from the same item being displayed by itself.
From the merchant side, the benefit is obvious: you will sell more items, increase AOV and personalize the customer shopping experience. To set up a full look bundle easily, we recommend Shop The Look, which includes robust reporting options to evaluate the effectiveness of the bundles.
5. Let them pick delivery date and time
Deliveries are not a problem for the few of us who work from home, but what about the others? Speed is definitely a way of being efficient in logistics and transportation, but it does not guarantee that we will be available to receive the product when it arrives at home.
Offering scheduled deliveries and pick up in a nearby store is seen as a great plus by the customer. Allowing them to pick a location, date and time for receiving the parcel turns your shop into a reliable, efficient and competitive platform. Since it is such a relevant factor for the online buyer, this kind of service guarantees the success in terms of conversions and AOV in the medium and long term.
This also means it is important to plan for the resources that allows you to schedule shipments to meet customer needs. You can easily implement this in your shop with an app like Delivery Date and Store Pick up. As a bonus point, you can even charge the user slightly more for a scheduled delivery, another uptick in your AOV.
6. Capture browsing interest
If your users are anything like me, they will spend hours browsing through hundreds of items, forget to save anything in the Wishlist, then get bored and leave the website altogether.
To make sure that the second visit is more effective, show them their recently viewed products, so they can skip another long browsing session and go straight to the purchase page.
How do you do this? It depends on your technical skills. If you have a developer at hand and prefer to avoid sharing user data with third parties, we recommend this way.
If you are a non-tech e-commerce manager and don’t mind a small monthly fee, try a Shopify app like Recently Viewed Items.
7. Downselling is a thing
The user abandoned the shopping cart with an item inside? Show an exit-intent pop-up with a similar item, but with a lower price.
8. Customer support can sell!
Especially when it comes to sizing, customers tend to have plenty of hesitation and might want to get help by getting in touch with a Customer Support Agent.
On top of the ubiquitous chats, try a call widget like EasyCall by Stylo Apps– your shoppers will be able to have an actual chat with your agents at no cost!
9. Implement a sizing solution
And since we are talking about sizing issues, it’s worth mentioning that a comprehensive sizing solution is probably your best bet when it comes to increasing average order value, especially with new users not familiar with the fit of your clothes yet. For a quick set up at zero cost, try Sizefox, and let us know how it goes!
10. Get a tip
Yes, tips are not only used in restaurants!
To enable this option, go to your Shopify Admin panel>Setting>Checkout and check the tipping section. It will allow you to get a percentage of the total value of the cart and to personalize your message. Easy to set up and definitely worth trying.
11. The art of Upselling
With an app like Order Bump you can upsell both at checkout and after the user has completed the purchase (i.e. in an interstitial showing right before the Thank-you page).
Remember that products to upsell must be a no-brainer, at this stage you want to offer something simple that does not cost much and does not require much thinking.
This is a technique we all have experience with in supermarkets. When you get to the checkout, you see some products displayed in pocket-size, such as chewing gum or bulk snacks. Why this? Because these are products that a customer tends to add to the cart at the last moment, without thinking.
In the case of a fashion and apparel shop, some examples would be a basic shirt, a pair of nice socks, the evergreen black tank top and so on.
Our last piece of advice for increasing your average order value is to be proactive. Try to anticipate the needs of your customers and the changes of the market. In order to do this, base your decisions on data and make sure you always run accurate tests. Don’t be discouraged by failures, as they are useful to understand what your customers do not like and give you indications on how to meet their expectations the second time around.