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Growth

Complete Guide to Increasing Your Average Order Value (AOV) on Shopify

Skai Lama
March 18, 2024
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15 Minutes

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In the competitive world of eCommerce, increasing your Average Order Value (AOV) is crucial for driving profitability and growth. AOV measures the average amount customers spend per order on your Shopify store. 

But that’s easier said than done! How do you go about increasing AOV after all?

We, at Skai Lama, have dedicatedly worked towards improving AOV and retention for thousands of Shopify merchants around the globe. Skai Lama's suite of Shopify apps can help you achieve higher AOV, and 5x ROI, and take your Shopify store to new heights.

In this blog, we will provide you with a complete guide on how to boost your AOV and maximize your revenue. Let's dive in and discover strategies for increasing your AOV on Shopify.

Understanding Average Order Value (AOV) on Shopify

Average Order Value (AOV) is a metric that measures the average amount spent by a customer per order on an e-commerce store. Calculating AOV helps businesses understand the purchasing behavior of their customers and make informed decisions to improve profitability. 

The benefits of having a high AOV are massive -

  • Increased Profitability: A high AOV indicates that customers are spending more money per order, resulting in increased revenue for the business. With higher revenue per sale, profitability can improve as the store earns more from each transaction. This allows the business to cover costs and invest in growth opportunities.
  • Higher ROI: Return on investment (ROI) is a critical metric for measuring the effectiveness of marketing and advertising campaigns. A high AOV means that the store is generating more revenue for each customer acquired. Since the cost of customer acquisition remains constant, a higher AOV boosts the ROI of marketing efforts and increases the overall return on investment.
  • Improved Customer Lifetime Value: Did you know a loyal customer’s AOV is around 5% higher than a new buyer’s? A high AOV indicates that customers are making larger purchases, which can lead to increased customer lifetime value. Customer lifetime value is the total revenue generated from a customer throughout their entire relationship with the business. 
  • Improved Customer Engagement: Encouraging higher AOV can drive better customer engagement. By offering personalized recommendations, bundles, or discounts for reaching a certain spending threshold, businesses can encourage customers to increase their order value. This personalized approach fosters a positive customer experience and builds loyalty.
  • Reduced Reliance on Constant Customer Acquisition: Increasing AOV reduces the dependence on constantly acquiring new customers to drive revenue growth. With a higher AOV, businesses can generate more revenue from existing customers, reducing the need for acquiring new customers continuously. This can lead to improved customer retention and long-term sustainability.

6 Tried-and-Tested Strategies to Increase AOV 

There are several ways to go about increasing your Shopify Average Order Value (AOV). Here are a few strategies that we have seen brands get crazy results with every single time!

1. Sell more items with build-your-own discounted product bundles 

Set up discounted bundles that encourage shoppers to add more items to their cart to avail quantity or amount-based discounts. 

Offer a ‘build your own bundle’ functionality that offers a seamless multi-step approach differentiating between collections and categories to make it easier to add more items to the cart. 

You can easily do this using Skai Lama’s Easy Bundles app. Check it out here.

2. Nudge shoppers to spend more with gift cards and cashback 

Bring back repeat, loyal, and VIP customers for another purchase with pre-loaded gift cards. Using a gift card often makes you spend more than expected — even more than the gift card was originally for. 

At the same time, remember to also offer cashback to all other customers based on their cart total. Run bulk email marketing campaigns through the app to get your offers noticed! 

You can easily do this using Skai Lama’s GiftKart app. Check it out here.

3. Use cart commitment to upsell at checkout 

Personalize upsell and cross-sell product recommendations to sell complementary products or refills for what they are buying. Remember to highlight the benefits or the overall value to justify the increase in items! 

Include service offers like priority shipping, insurance, and subscription deals at checkout or a free shipping bar to bump up order value ‘reasonably’. 

You can easily do this using Skai Lama’s Checkout Wiz app. Check it out here.

4. Incentivise spending more with free gifts on orders 

Encourage online shoppers to add more items to their cart in order to unlock a free gift or offer on an exclusive collection. 

Remember to set a minimum cart value and gamify the benefits you offer for more participation. 

You can easily do this using Skai Lama’s Kite app. Check it out here.

5. Offer volume discounts for more number of items purchased 

Incentivize online shoppers to add more items to the cart in order to unlock volume-based discounts, thereby also increasing your overall cart value. 

Create tier-based volume discounts and offer a one-click functionality to add items to the cart. 

You can easily do this using Skai Lama’s Easy Bundles app. Check it out here.

6. Create new revenue opportunities with gifting experiences 

Give customers the ability to gift wrap their orders, send greeting cards, schedule delivery, or complete a gift set at an additional cost. 

Open a whole new channel to generate more revenue per order. 

You can easily do this using Skai Lama’s Gift Labs app. Check it out here.

Success Stories: Brands that Used these Strategies to Boost their AOV

Let’s see how the above-mentioned strategies performed in action.

1. Mellow Fellow Made an Extra $1500 By Upselling on Checkout

Mellow Fellow is a renowned cannabis brand.

They faced challenges in upselling their products, and hence they were unable to increase their AOV. So, they turned to Checkout Wiz, the ultimate tool to enhance the Shopify checkout experience.

Here’s what we did to help them -

  • Implemented rule-based upsells and introduced a systematic approach to upselling. For instance, pairing edibles with vapes based on their respective collections.
  • Conducted A/B testing to determine the effectiveness of upsell offers on the post-purchase page versus the checkout page.
  • Based on the A/B test results, we shifted the same upsell offer to one of the checkouts using Checkout Wiz, as it was working better.

And the results were crazy!

Mellow Fellow initially had 546 views on their upsell block, resulting in a conversion rate of only 3.66% and 20 orders, generating a mere revenue of $160.

After implementing Checkout Wiz, the results significantly improved. They received 2925 views on their upsell block, which led to 288 orders i.e. 10% conversion, showing a 6% increase in conversion rate.

As a result, Mellow Fellow generated total revenue of $1.5k from upsells, showcasing the effectiveness of upsell offers.

Read more about this case study here.

2. A Beauty Brand Increased Its Average Order Value by 36% Using a Gift Card Rewards Program

In the competitive beauty sector, customer retention and engagement are as vital as attracting new customers, especially now in a time of economic downturn drying up ad budgets and diminishing ROI. 

To address this challenge, the beauty brand turned to GiftKart, a versatile tool that facilitated the seamless setup and management of a reward program. 

Here's how the brand orchestrated a successful campaign -

  • Using the GiftKart app, the brand set up a reward program that automatically added a $25 gift card to the cart for eligible orders, followed by an email notification containing the gift card details. 
  • To foster a sense of urgency and encourage quick repeat purchases, the issued reward cards had a one-month expiry date. 
  • The brand integrated GiftKart with Klaviyo to design a series of email flows. These emails not only notified customers about the reward but also sent reminder emails coupled with product recommendations, creating a personalized and engaging customer experience.

The results?

The beauty brand witnessed a significant 36% increase in the average order value to $155.68 after implementing the Gift Card Rewards program!

From only 175 reward card codes and 1332 gift cards issued, the brand enjoyed a $21.5k upsell revenue and total revenue of  $26.15k, making the campaign a resounding success.

Read more about this case study here.

Wrapping up!

Increasing your Average Order Value (AOV) is a key factor in driving profitability and growth for your Shopify store. 

Skai Lama, with its unique advantages, can play a vital role in enhancing your AOV and taking your online business to the next level. With Skai Lama's custom integrations, migration support, and dedicated customer success teams, you can optimize your store's performance and effectively boost your AOV. 

To learn more about how Skai Lama can help you unlock the full potential of your Shopify store and increase your AOV, click here

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In the competitive world of eCommerce, increasing your Average Order Value (AOV) is crucial for driving profitability and growth. AOV measures the average amount customers spend per order on your Shopify store. 

But that’s easier said than done! How do you go about increasing AOV after all?

We, at Skai Lama, have dedicatedly worked towards improving AOV and retention for thousands of Shopify merchants around the globe. Skai Lama's suite of Shopify apps can help you achieve higher AOV, and 5x ROI, and take your Shopify store to new heights.

In this blog, we will provide you with a complete guide on how to boost your AOV and maximize your revenue. Let's dive in and discover strategies for increasing your AOV on Shopify.

Understanding Average Order Value (AOV) on Shopify

Average Order Value (AOV) is a metric that measures the average amount spent by a customer per order on an e-commerce store. Calculating AOV helps businesses understand the purchasing behavior of their customers and make informed decisions to improve profitability. 

The benefits of having a high AOV are massive -

  • Increased Profitability: A high AOV indicates that customers are spending more money per order, resulting in increased revenue for the business. With higher revenue per sale, profitability can improve as the store earns more from each transaction. This allows the business to cover costs and invest in growth opportunities.
  • Higher ROI: Return on investment (ROI) is a critical metric for measuring the effectiveness of marketing and advertising campaigns. A high AOV means that the store is generating more revenue for each customer acquired. Since the cost of customer acquisition remains constant, a higher AOV boosts the ROI of marketing efforts and increases the overall return on investment.
  • Improved Customer Lifetime Value: Did you know a loyal customer’s AOV is around 5% higher than a new buyer’s? A high AOV indicates that customers are making larger purchases, which can lead to increased customer lifetime value. Customer lifetime value is the total revenue generated from a customer throughout their entire relationship with the business. 
  • Improved Customer Engagement: Encouraging higher AOV can drive better customer engagement. By offering personalized recommendations, bundles, or discounts for reaching a certain spending threshold, businesses can encourage customers to increase their order value. This personalized approach fosters a positive customer experience and builds loyalty.
  • Reduced Reliance on Constant Customer Acquisition: Increasing AOV reduces the dependence on constantly acquiring new customers to drive revenue growth. With a higher AOV, businesses can generate more revenue from existing customers, reducing the need for acquiring new customers continuously. This can lead to improved customer retention and long-term sustainability.

6 Tried-and-Tested Strategies to Increase AOV 

There are several ways to go about increasing your Shopify Average Order Value (AOV). Here are a few strategies that we have seen brands get crazy results with every single time!

1. Sell more items with build-your-own discounted product bundles 

Set up discounted bundles that encourage shoppers to add more items to their cart to avail quantity or amount-based discounts. 

Offer a ‘build your own bundle’ functionality that offers a seamless multi-step approach differentiating between collections and categories to make it easier to add more items to the cart. 

You can easily do this using Skai Lama’s Easy Bundles app. Check it out here.

2. Nudge shoppers to spend more with gift cards and cashback 

Bring back repeat, loyal, and VIP customers for another purchase with pre-loaded gift cards. Using a gift card often makes you spend more than expected — even more than the gift card was originally for. 

At the same time, remember to also offer cashback to all other customers based on their cart total. Run bulk email marketing campaigns through the app to get your offers noticed! 

You can easily do this using Skai Lama’s GiftKart app. Check it out here.

3. Use cart commitment to upsell at checkout 

Personalize upsell and cross-sell product recommendations to sell complementary products or refills for what they are buying. Remember to highlight the benefits or the overall value to justify the increase in items! 

Include service offers like priority shipping, insurance, and subscription deals at checkout or a free shipping bar to bump up order value ‘reasonably’. 

You can easily do this using Skai Lama’s Checkout Wiz app. Check it out here.

4. Incentivise spending more with free gifts on orders 

Encourage online shoppers to add more items to their cart in order to unlock a free gift or offer on an exclusive collection. 

Remember to set a minimum cart value and gamify the benefits you offer for more participation. 

You can easily do this using Skai Lama’s Kite app. Check it out here.

5. Offer volume discounts for more number of items purchased 

Incentivize online shoppers to add more items to the cart in order to unlock volume-based discounts, thereby also increasing your overall cart value. 

Create tier-based volume discounts and offer a one-click functionality to add items to the cart. 

You can easily do this using Skai Lama’s Easy Bundles app. Check it out here.

6. Create new revenue opportunities with gifting experiences 

Give customers the ability to gift wrap their orders, send greeting cards, schedule delivery, or complete a gift set at an additional cost. 

Open a whole new channel to generate more revenue per order. 

You can easily do this using Skai Lama’s Gift Labs app. Check it out here.

Success Stories: Brands that Used these Strategies to Boost their AOV

Let’s see how the above-mentioned strategies performed in action.

1. Mellow Fellow Made an Extra $1500 By Upselling on Checkout

Mellow Fellow is a renowned cannabis brand.

They faced challenges in upselling their products, and hence they were unable to increase their AOV. So, they turned to Checkout Wiz, the ultimate tool to enhance the Shopify checkout experience.

Here’s what we did to help them -

  • Implemented rule-based upsells and introduced a systematic approach to upselling. For instance, pairing edibles with vapes based on their respective collections.
  • Conducted A/B testing to determine the effectiveness of upsell offers on the post-purchase page versus the checkout page.
  • Based on the A/B test results, we shifted the same upsell offer to one of the checkouts using Checkout Wiz, as it was working better.

And the results were crazy!

Mellow Fellow initially had 546 views on their upsell block, resulting in a conversion rate of only 3.66% and 20 orders, generating a mere revenue of $160.

After implementing Checkout Wiz, the results significantly improved. They received 2925 views on their upsell block, which led to 288 orders i.e. 10% conversion, showing a 6% increase in conversion rate.

As a result, Mellow Fellow generated total revenue of $1.5k from upsells, showcasing the effectiveness of upsell offers.

Read more about this case study here.

2. A Beauty Brand Increased Its Average Order Value by 36% Using a Gift Card Rewards Program

In the competitive beauty sector, customer retention and engagement are as vital as attracting new customers, especially now in a time of economic downturn drying up ad budgets and diminishing ROI. 

To address this challenge, the beauty brand turned to GiftKart, a versatile tool that facilitated the seamless setup and management of a reward program. 

Here's how the brand orchestrated a successful campaign -

  • Using the GiftKart app, the brand set up a reward program that automatically added a $25 gift card to the cart for eligible orders, followed by an email notification containing the gift card details. 
  • To foster a sense of urgency and encourage quick repeat purchases, the issued reward cards had a one-month expiry date. 
  • The brand integrated GiftKart with Klaviyo to design a series of email flows. These emails not only notified customers about the reward but also sent reminder emails coupled with product recommendations, creating a personalized and engaging customer experience.

The results?

The beauty brand witnessed a significant 36% increase in the average order value to $155.68 after implementing the Gift Card Rewards program!

From only 175 reward card codes and 1332 gift cards issued, the brand enjoyed a $21.5k upsell revenue and total revenue of  $26.15k, making the campaign a resounding success.

Read more about this case study here.

Wrapping up!

Increasing your Average Order Value (AOV) is a key factor in driving profitability and growth for your Shopify store. 

Skai Lama, with its unique advantages, can play a vital role in enhancing your AOV and taking your online business to the next level. With Skai Lama's custom integrations, migration support, and dedicated customer success teams, you can optimize your store's performance and effectively boost your AOV. 

To learn more about how Skai Lama can help you unlock the full potential of your Shopify store and increase your AOV, click here

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