Supercharge Your Sales: Proven Strategies to increase average order value (AOV)

Attracting new customers to your online store is one of the most expensive processes for your business. Increasing the value of each order can be an effective way to increase profit per order.

What is average order value (AOV)?

AOV stands for average order value and refers to the total amount spent by a customer in a single order. To calculate it, just divide revenue for the period, by the orders received in the same time frame. This is often done on a monthly basis to see if there is any fluctuation with seasonality or marketing efforts. For example, if in September you made £5,708 in revenue and received 200 orders, your AOV would be 5708/200= £28.54

Why should you focus on increasing average order value?

Its well known that attracting new customers cost up to 25x the amount as retaining an existing one, but that doesn’t mean you stop trying to grow your customer base. One way to increase return on new and existing customers is to implement basket optimisation strategies to increase average order value and ensure each order you secure, is bringing the maximum amount of return for your efforts. These are some of the other benefits:

⇒ Increase revenue: Even a small increase per order will have an impact in your total revenue, helping your business thrive and grow.

⇒ Increase return on investment: Generating orders generally requires marketing spend. Google and social media adverts, in and out of home advertising and developing assets for this all requires time and resources that eat into your profit margin. Maximising the return on these efforts with a larger order can make a huge impact on cashflow and profitability. 

⇒ Increase customer loyalty: Getting customers to try more of your products or upgrade to a premium option is likely to give them the best introduction to your offering, helping them discover the products that they would choose above your competitors.

Which sales platform has the highest AOV?

eCommerce platforms such as Shopify and BigCommerce often have the highest AOV compared to marketplaces such as Amazon and eBay, as shoppers are unlikely to purchase multiple items from a single seller on a marketplace. Our data suggests that the average Shopify order in 2023 (excluding peak season) had 2.3 items in it compared to just 1.7 on marketplaces, however as shoppers are often on marketplaces to compare different items, it may be possible to upsell to more premium items on these platforms.

How to
maximise average order value:

Upselling

By using comparison tools, featured product blocks and reviews you can encourage customers to purchase a premium version of the product in their order by highlighting the additional features and benefits that justify the higher price point and entice customers to spend more money on the same number of items.

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Cross-selling

Implementing product recommendations throughout the buying journey, from the product page with “buy the look” and “often bought together” suggestions,  to in-cart product recommendations to replicate point-of-sale, impulse purchases, can help customers to discover complimentary items and spend more in the same order by adding additional items.

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Targetted Promotions

Offering promotions based on customers previous buying or browsing history can entice them to re-buy items they loved before or are running out of. Cutting through the noise and suggesting items they already showed an interest in, which may be harder to say no to, especially with a discount.

Multi-buy or staggered promotions are also a great way to convince shoppers to add additional items to their basket. These could be 25% discount when you buy 2 items, 40% if you buy 3,  £50 off when you spend £200 or more.

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Product Bundling

From starter sets or gift packs to collections, bundles can be a great way to entice customers to order multiple items. These items are also beneficial for increasing conversion rate as there is a much simpler decision making process, knowing the sets are make up of best sellers, or has everything they need to experience the maximum impact from your products. This is a great option for products like drinks, bath products, kids items, technology and gaming.

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Free Shipping Thresholds

Consumer research suggests that 78% of people will spend more to get free shipping, this is particularly effective if you offer product recommendations within the cart so customers can add products without returning to the browsing stage of their journey.

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Loyalty Programs

Offering customers to collect points on their spend in return for vouchers can encourage them to spend more in order to reach the next threshold. This technique is often used by supermarkets where customers shop little and often, or apparel brands where the first reward can be reached within one purchase i.e. spend £25 to get 10% off your first order.

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Impact of higher order value on order fulfilment:

Many of these strategies will result in more items needing to be picked per order and depending on your products, you may also need to increase your parcel size to accommodate the larger orders. At Huboo, we use a unique micro-hub model to ensure all of a sellers stock is kept in close proximity to reduce time walking between pick locations, increasing efficiency, and ensuring we are able to dispatch as many orders per day as possible, even during peak times. We can also arrange the stock so that products regularly purchased together are stored close by or bundled in advance for “fast-line picking”. To find out more about how fulfilment with Huboo works click here

What Huboo provides is a foundational layer of support for my business that can be scaled as I ship to more locations and across multiple channels. For example, I’m exploring things like TikTok Shop and other social commerce tools, but I’m also thinking about how to get Kikakinis into traditional retail outlets. I can think big because I know that Huboo will be by my side, regardless of where the growth journey takes me next.
Kate Shillitoe Founder
Huboo has been a breath of fresh air for us, it has allowed us to reach the global market as well as maintain our hold on the UK market. I don’t have to worry at all about the service that Huboo offers, which, as a business owner, is the ideal scenario. Before Huboo, we were incredibly reliant on Amazon FBA and fulfilling orders ourselves which used to take up all of our time and didn’t allow us to focus on growing our business.
Tom Doherty Founder

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