The average order value is a critical subject for any e-merchant, as it has a significant influence on the turnover. However, it is also one of the most difficult metrics to improve as it is fully dependent a) on the range of products and b) the structure of the catalogue, but above all by c) the needs of the visitor. It is not a simple task to encourage someone to purchase something they were not originally intending to buy. Below, you will uncover 4 essential techniques to encourage your visitors to buy more, and increase your average order value.
Increase the minimum threshold for free delivery
Adjusting the threshold at which visitors qualify for free delivery will encourage them to put more in their shopping basket.
No e-merchant rejoices at awarding free delivery to their customers, yet it is one of the most efficient means of boosting the conversion rate and increasing the average order value. The key is to set the free delivery threshold at a certain level: superior to the average basket amount and enough to encourage customers to make the effort necessary to qualify, without being so close as to make delivery costs free too often.
Adjusting this threshold requires you to analyse your order history by segmenting orders into increments of £10, for example, for average order values of below £100, in order to view the "purchase profile" of your visitors.
In the example below, delivery is offered from an order totalling £80 worth of goods.
|Segment||Threshold inclusive of VAT||Numbers of orders||Percentage|
|1||Up to £29.99||241||13%|
|2||From £30 to £39.99||255||14%|
|3||From £40 to £49.99||185||10%|
|4||From £50 to £59.99||211||11%|
|5||From £60 to £69.99||243||13%|
|6||From £70 to £79.99||82||4%|
We can see that segment 6, below the £80 level, represents only 4% of orders, while segment 5 represents 13% of orders. Segment 5 corresponds to the group of customers who have not made the effort to buy between £10 and £20 of additional products to gain free delivery, the threshold being too far from their initial budget or their product requirements.
In this case, it would be interesting to set the new delivery threshold at £69 to stimulate segment 5 (and 4 to a lesser degree), since obtaining the free postage fees will require overstepping the budget by a more acceptable amount than before. To test this hypothesis, carry out a trial over a month by announcing the reduction in delivery fees on your e-Commerce site and in your newsletter. If the average order value increases, you can implement the practice on a permanent basis and reward your loyal customers.
Suggest several upsell and cross-sell products on your basket page
Another tried-and-tested technique is to offer additional products on the shopping basket page, making sure that you offer products complementary to those already in the basket, whose price is low enough for the customer to allow themselves the added spend without breaking their planned budget.
Bear in mind the example of a shoe store: when you go to the checkout, you are offered the appropriate polish, a waterproofing product, more comfortable soles, or a pair of extra laces. These are only small additional expenses but multiplied by a few hundred customers, this can add up to a significant gain.
For further information,
Part 2 will arrive soon...Stay tuned!