How To Increase Average Order Value in eCommerce?
& Why Does Understanding Customer Behaviour and Higher Average Order Value Matter?
Looking to increase average order value in eCommerce businesses in today's competitive landscape? Driving growth isn't just about acquiring new customers - it's about maximising value from every transaction.
Average order value (AOV) stands as one of the most crucial metrics for measuring your online store's financial health.
Simply put, AOV represents the average dollar amount spent per order, calculated as total revenue divided by the number of orders.
Increasing average order value in eCommerce allows businesses to generate more revenue without the high customer acquisition costs associated with finding new customers. When your existing customers spend more on each purchase, your profitability soars, creating a sustainable path to growth.
For Australian eCommerce businesses looking to boost their bottom line, implementing effective marketing and pricing strategies to increase AOV can deliver remarkable results. This comprehensive guide provides 25 practical, proven tactics to help you encourage customers to add more to their baskets and ultimately drive higher average order value across your online store.
What is Average Transaction Value, and How to Calculate Average Order Value?
Definition, Importance, and Calculation Methods
Average order value (AOV) represents the average amount customers spend per transaction on your eCommerce site. It provides vital insights into customer spending behaviour and helps measure the effectiveness of your sales and marketing strategies. A higher average order value signals that customers find value in your products and are willing to spend more money on each visit - a key indicator of business health for online businesses of all sizes.
To calculate the average order value, use this simple formula:
Average Order Value = Total Revenue ÷ Number of Orders
For example, if your online store generated $10,000 in revenue from 200 orders in a month, your AOV would be $50.
AOV is truly beneficial since acquiring a new customer typically costs 5 to 25 times more than retaining an existing one, depending on the industry. Smart marketing campaigns that focus on AOV help leading eCommerce brands achieve sustainable growth. This efficiency makes it one of the most powerful levers for boosting your eCommerce performance and accelerating growth.
Boost AOV While We Handle Your Fulfilment
Is your team spending too much time on logistics instead of optimising customer value? Our end-to-end logistics solutions free your resources to focus on implementing these AOV strategies while we handle everything from warehousing to delivery. Contact us today!
The Business Impact of Increasing AOV
How Higher Average Order Value Affects Customer Lifetime Value
Boosting your average order value delivers multiple benefits that directly impact your bottom line.
- First and foremost, increasing AOV means generating more revenue from your existing customers without raising marketing costs. When shoppers spend more per order, your profit margins improve, as fixed costs like shipping, packaging, and transaction fees are spread across larger orders.
- Higher average orders also deliver a better return on investment on your customer acquisition costs. If you've spent money to attract a visitor to your site, you'll want to maximise the value of that visit.
- Increasing AOV helps you recoup those costs faster and start generating profits sooner. How your pricing strategy affects average order value cannot be overstated - it's the foundation of your revenue model.
- Perhaps most significantly, when you consistently achieve a higher average order value, you also improve customer lifetime value - a critical metric that predicts the total revenue a customer will generate throughout their relationship with your business.
- Rewarding loyal customers with personalised offers or a free gift creates the positive customer engagement that turns first-time buyers into repeat customers. This approach doesn't just entice customers to spend more now - it builds customer satisfaction that keeps them coming back.
The most successful eCommerce stores use customer testimonials to build trust while implementing shipping strategies to cross-sell complementary products that genuinely enhance the shopping experience. The result is satisfied customers who feel valued rather than merely sold to.
How to Increase Average Order Value in eCommerce: 25 Proven Marketing Strategies
1. Set the Perfect Free Shipping Threshold
One of the most effective ways to increase average order value is by implementing a free shipping threshold. Research shows that 9 out of 10 consumers identify free shipping as the biggest incentive when shopping online. By setting a minimum purchase requirement for free shipping slightly above your current AOV, you create a powerful motivation for customers to add more items to their carts – nearly 80% of consumers will add items to meet the threshold.
For example, if your average order is $50, consider offering free shipping on orders over $65. The key is to make the threshold attainable enough that customers will add additional items rather than abandon their carts. Many Australian eCommerce stores effectively use messaging like "Add $15 more to qualify for FREE shipping" to encourage customers to reach the threshold.
2. Create Irresistible Product Bundles
Product bundling involves grouping complementary products together and offering them at a slight discount compared to purchasing each item individually. This strategy increases perceived value while encouraging customers to purchase multiple products in a single transaction.
Focus on creating logical combinations that solve customer problems or enhance the primary product's functionality. For example, a beauty retailer might bundle a face cleanser with a moisturiser and serum as a complete skincare set. The key is to ensure bundles make sense to customers and deliver genuine value.
When implementing product bundles, highlight the savings customers will enjoy compared to buying items separately. Use visually appealing presentations and clear messaging about the benefits of purchasing the complete solution rather than individual components.
3. Master Strategic Upselling Techniques
Upselling involves recommending higher-priced alternatives when customers are viewing products. Upselling and cross-selling can drive 10–30% more revenue and significantly lift AOV. The key to successful upselling is presenting compelling value propositions that clearly show why premium options offer better value, not just a higher price tag.
Implement side-by-side product comparisons highlighting additional features and benefits of upgraded products. For example, when a customer is viewing a basic coffee machine, show them how the premium model offers programmable settings, a built-in grinder, and a longer warranty, making the higher-priced product appear as the better long-term value.
Effective upselling isn't about pushing the most expensive option but rather helping customers find the product that best meets their needs, which often turns out to be a higher-priced product with more features or benefits.
4. Implement Cross-Selling to Increase Average Order Value
Cross-selling involves suggesting relevant complementary products that enhance the customer's primary purchase. The strategy works best when recommendations are genuinely relevant and add value to the original product.
Place cross-sell suggestions strategically throughout the customer journey: on product pages ("Frequently bought together"), in shopping carts ("You might also like"), and even during checkout for small, last-minute additions. The key is ensuring these suggestions feel helpful rather than pushy.
5. Boost Sales with Strategic Volume Discounts
Volume discounts incentivise customers to purchase multiple units of the same product by offering tiered pricing based on quantity. Volume discounts can boost AOV. For example, "Buy one for $20, buy two for $36, buy three for $50" creates a clear incentive to purchase more units to access better value.
When implementing volume discounts, clearly display the per-unit savings to highlight the value proposition. The discount should be significant enough to motivate additional purchases while maintaining healthy profit margins. Consider your product's usage frequency and shelf life when determining appropriate quantity breaks.
This strategy works particularly well for consumable products, seasonal items, or products customers might stock up on. By encouraging customers to buy in bulk, you not only increase average order value but also reduce the frequency of reordering and shipping costs.
6. Develop a Customer Loyalty Program That Drives Higher Order Value
A well-designed loyalty program can significantly boost customer lifetime value and average order value by incentivising larger purchases. Create a points-based reward system where customers earn benefits for larger purchases, with enhanced rewards at specific spending thresholds.
Design your program to encourage customers to add more items to reach the next reward level. For example, offering double points on orders over $100 motivates customers to increase their basket size to qualify for the bonus. Keep the program simple and easily accessible, avoiding complex rules that might confuse or frustrate members.
Australian beauty retailer Mecca's Beauty Loop program exemplifies this approach, offering tiered membership levels based on annual spending, with rewards beginning once customers spend $300 per year (Level 1 tier). This structure encourages loyal customers to consolidate their purchases with the brand and spend more to reach higher tiers.
7. Personalise Product Recommendations Based on Customer Behaviour
Leveraging customer data to provide tailored product suggestions is a powerful way to increase average order value. Personalised recommendations have significantly higher conversion rates than generic ones because they align with the individual's preferences and needs. Implement recommendation engines that analyse browsing history, past purchases, and similar customer profiles to suggest relevant products.
Even smaller eCommerce businesses can implement basic personalisation by segmenting customers and creating recommendation rules based on purchase history or product categories. As your technology capabilities grow, more sophisticated AI-driven solutions can further refine the relevance of your recommendations.
8. Create Urgency with Limited-Time Offers
Creating a sense of urgency through time-sensitive promotions encourages faster purchasing decisions and often leads to higher average order values. Use countdown timers and clear messaging about expiring offers to trigger FOMO (fear of missing out) among shoppers.
Limited-time offers like "24-hour flash sale" or "Weekend special: Buy one, get one half-price" create an immediacy that motivates customers to act quickly. When planning these promotions, ensure they align with seasonal trends relevant to Australian consumers, such as end-of-financial-year sales or summer holiday promotions.
The key to success with this strategy is genuine scarcity - avoid running "limited-time" promotions continuously, as this diminishes their effectiveness and credibility. Instead, use them strategically during key sales periods to maximise their impact on average order value.
9. Optimise Your Product Pages for Maximum Conversion
Your product pages play a critical role in driving purchase decisions and increasing average order value. Design them to highlight value and make it easy for customers to discover and add complementary items.
Include high-quality images from multiple angles, detailed descriptions addressing key benefits and features, and customer reviews to build trust. Ensure related products are clearly visible and easily added to the cart without leaving the current page.
Australian outdoor retailer Kathmandu offers a great example with product pages that include detailed specifications, size guides, customer reviews, and related product recommendations - all designed to build confidence and encourage additional purchases. Kathmandu members receive free shipping on all orders, while non-members pay $10.
10. Increase Average Order with Decoy Pricing Strategy
The decoy pricing strategy leverages consumer psychology by presenting three pricing options where the middle option offers the best value. This makes the higher-priced option appear more attractive, often leading customers to select a more expensive option than they initially intended.
This strategy works particularly well for tiered service offerings, subscription plans, or product bundles. The key is ensuring there's a clear value progression between options that makes the higher-priced selection feel like a smart choice rather than an upsell.
11. Boost Average Transaction Value with Post-Purchase Upsells
Post-purchase upselling takes advantage of the psychological moment when customers have already committed to a purchase and are more receptive to additional offers. After checkout completion, present relevant deals that enhance their original purchase, ideally with a one-click addition capability to minimise friction.
This strategy works because it separates the upsell from the original purchase decision, preventing cart abandonment while still capturing additional revenue. The offers should be closely related to the purchased items and presented with a compelling reason to add them immediately (such as a special discount only available at that moment).
For example, after a customer buys a pair of running shoes, offer a special discount on performance socks or a running belt that complements their purchase. The convenience and relevance make these offers highly effective at increasing average order value.
12. Implement Buy Now, Pay Later Options to Increase Average Order Size
Buy Now, Pay Later (BNPL) services like Afterpay, Zip, and Klarna have become extremely popular in Australia, with many Australians using BNPL in the past 6 months; Afterpay remains the most recognised provider. About 57% of Gen Z Australians have used BNPL services. These flexible payment options allow customers to spread costs over time without interest, making larger purchases more accessible.
BNPL orders typically have ~50% higher AOV than non-BNPL orders, on average. Prominently display BNPL availability throughout the shopping experience, especially on higher-priced products where financing might influence the purchase decision. Include messaging like "4 interest-free payments of $25" to help customers mentally break down the total cost into more manageable amounts.
13. Use Product Comparison Features to Drive Higher Value Purchases
Enable customers to compare similar products side-by-side, highlighting the additional benefits of premium options. This helps shoppers understand the value propositions of higher-priced items and often leads to selecting more feature-rich products.
Implement comparison tables on category pages or as pop-up features that clearly outline differences in specifications, features, and benefits. The key is making comparisons easy to understand at a glance, using visual cues like checkmarks or progress bars to highlight the advantages of higher-tier products.
This approach is particularly effective for technical products where feature differences might justify significant price variations. By helping customers make informed decisions, you not only increase average order value but also reduce return rates, as shoppers are more likely to select products that truly meet their needs.
14. Increase Average Order Value with Premium Services
Offering premium services like gift wrapping, personalised messages, or product customisation for additional fees adds value to the customer experience while increasing order totals. These high-margin services enhance the perceived value of the purchase while adding relatively little cost to your operation.
Highlight these options at relevant points in the shopping journey, particularly during gift-giving seasons. For example, offer monogramming services for towels or apparel, gift hamper creation from selected products, or premium packaging options for special occasions.
Australian retailers effectively implement this strategy by offering gift wrapping and personalised notes for an additional fee, creating a convenient solution for customers while boosting average order value.
15. Offer Tiered Shipping Options for Different Customer Needs
While free shipping thresholds are effective, some customers prioritise speed over cost and are willing to pay more for faster delivery. Offering multiple shipping options at different price points allows you to cater to various customer preferences while increasing average order value.
Present a range of shipping choices, from standard free shipping (above your threshold) to express or same-day delivery options at premium prices. Clearly communicate the benefits of each tier, such as guaranteed delivery dates or special handling.
This strategy works particularly well for last-minute purchases or high-value items where customers might prefer the security of expedited shipping. By catering to these preferences, you create additional revenue opportunities while improving the customer experience.
Fast Shipping: Your Secret AOV Weapon
Our same-day and next-day delivery services help you offer compelling shipping incentives that dramatically increase average order values.
16. Leverage Customer Behaviour with Strategic Social Proof Placement
Displaying positive customer reviews, ratings, and user-generated content near upsell and cross-sell recommendations significantly increases their effectiveness. According to research, 88% of consumers trust online reviews as much as personal recommendations, making social proof a powerful conversion tool.
Place social proof strategically throughout the shopping journey, particularly alongside higher-priced alternatives or complementary product suggestions. For example, showcase a five-star review of your premium product version when a customer is viewing the standard version.
Different product categories benefit from different types of social proof. For technical products, detailed reviews highlighting performance advantages work best. For fashion or home goods, visual user-generated content demonstrating the products in real-life settings can be more effective in driving conversion and increasing average order value.
17. Set Smart Minimum Order Requirements Without Hurting Conversion
Setting a minimum order value for checkout can effectively increase your average order value, but this approach requires careful implementation to avoid cart abandonment. The key is combining minimum requirements with compelling offers that make reaching the threshold attractive.
When implementing minimum order requirements, analyse your data to understand typical purchasing patterns and set thresholds that a reasonable percentage of your customers already meet. This ensures the policy affects only a small portion of orders while encouraging them to increase their spending.
18. Recover Lost Sales with Exit-Intent Marketing Strategies
Exit-intent pop-ups detect when visitors are about to leave your site and present special offers to recapture their attention. These last-moment interventions can recover potentially abandoned carts while simultaneously increasing order values.
Keep these interventions non-intrusive and genuinely valuable. A well-timed, relevant exit offer can transform a lost sale into an enlarged order, making this strategy particularly effective for increasing average order value from visitors who might otherwise have left without purchasing.
19. Transform Your Checkout Page into an AOV-Boosting Asset
Your checkout page represents a final opportunity to increase average order value before purchase completion. Design this critical touchpoint to include relevant upsells without creating friction that might jeopardise conversion. Present limited, highly relevant suggestions based on cart contents - these should be complementary items at a relatively low price point compared to the current order total.
Keep the checkout process streamlined while still offering these valuable additions. The suggestions should feel helpful rather than pushy, and adding them to the order should require minimal effort. This approach increases average order value while maintaining a smooth path to purchase completion.
20. Create Tiered Spending Discounts to Encourage Higher Average Orders
Implement progressive discounts that increase with order value, such as "$10 off orders over $75, $25 off orders over $100." These tiered thresholds encourage customers to add more items to reach the next discount level, effectively increasing their average order.
The key to this strategy is strategically setting the threshold points based on your current AOV. The first tier should be slightly above your average order, with subsequent tiers spaced to encourage meaningful cart additions. Clearly communicate how much more customers need to spend to reach the next discount level.
21. Use Email Marketing to Drive Larger Average Transaction Values
Email marketing allows for highly targeted communications that can effectively drive larger average order values from your existing customer base. Create campaigns featuring product bundles, exclusive offers, and complementary recommendations based on previous purchase history.
Segment your email list to ensure relevance - for example, sending accessory recommendations to customers who recently purchased main products. Include compelling visuals and clear value propositions that communicate why additional purchases make sense.
Abandoned cart emails present a particularly valuable opportunity. Rather than simply reminding customers of forgotten items, include relevant complementary products or volume discounts to encourage a larger order upon return. This approach not only recovers potentially lost sales but also increases their value.
22. Increase Average Order Size with Shoppable Collections
Create curated product collections that work well together, allowing customers to purchase complete "looks" or sets with minimal effort. This approach streamlines the shopping experience while naturally increasing the number of items per order.
For fashion retailers, this might mean creating outfit collections where customers can purchase all components with a single click. For home goods, room-based collections let shoppers coordinate their purchases with confidence. The key is creating logical groupings that solve customer needs more effectively than individual products.
23. Use Product Samples to Increase Future Customer Lifetime Value
Including small samples with orders that reach certain value thresholds serves two purposes: it incentivises larger initial purchases to qualify for the samples and introduces customers to new products they might purchase in full size later, increasing future order values.
Implement this strategy by offering samples of complementary or new products when customers reach a spending threshold. This approach is particularly effective for repeat-purchase categories like beauty, food, or wellness products, where trying new items often leads to expanded purchasing habits and increased customer lifetime value.
24. Design Referral Programs That Incentivise Higher Average Orders
Create referral programs that reward both the referrer and the new customer, with structures that encourage larger initial purchases. Referred customers have 150% higher AOV and 18% lower churn than non-referred ones. For example, "Give $20, Get $20 when your friend spends $100+" incentivises referrals to customers likely to place substantial first orders.
The dual reward structure motivates existing customers to share your brand with friends while setting expectations for order sizes from new customers. This approach not only brings in new business but ensures these new customers start with higher-than-average orders.
25. Use Data-Driven Marketing Strategies to Continuously Optimise AOV
The foundation of sustained AOV growth is continuous analysis and optimisation based on customer data. Track your average order value metrics by product category, customer segment, marketing channel, and time period to identify patterns and opportunities.
Implement A/B testing for key elements that influence average order value, such as free shipping thresholds, upsell placements, or discount structures. Use the results to refine your strategies based on actual performance data rather than assumptions.
Regularly update your approaches based on changing customer behaviour, seasonal trends, and competitive landscape. The most successful eCommerce businesses treat AOV optimisation as an ongoing process rather than a one-time initiative, constantly experimenting with new approaches to drive higher average orders.
From Strategy to Execution: Implement These AOV Tips Today
Ready to put these AOV strategies into action? Our cloud fulfilment solutions give you the flexibility to shift resources from inventory management to growth initiatives. Explore today!
Transform Your eCommerce Profitability by Increasing AOV with SKUTOPIA's Expertise
Increasing average order value represents one of the most effective ways to boost profitability without incurring the high customer acquisition costs associated with finding new customers. By implementing these 25 strategies, you can significantly grow your revenue while providing more value to your customers, creating a win-win situation that builds both sales and customer satisfaction.
Remember that the most successful approach combines multiple techniques tailored to your specific products and customer base. Free shipping thresholds might work brilliantly for one category, while product bundles deliver better results for another. The key is testing different approaches, measuring results, and refining your strategy based on data.