Duologi

Login

Duologi

  • Sectors
    • All
    • Retail
    • Legal
    • Bespoke
    • Education
    • Healthcare
  • How it Works
  • Switching Finance Provider
  • New to Finance?
  • About Us
  • Retail Finance Blog
  • Get in Touch

retail
finance
ideas

  • Ideas for you
  • News
  • Case studies
https://duologi.com/wp-content/uploads/2020/08/woman-online-retail-order.jpg

10 Ways to Increase Average Order Value

Thursday August 13th, 2020

What is ‘average order value’?

In retail – and particularly online retail – your average order value is the amount of income you bring in per transaction, averaged out across all the orders customers successfully complete at your store.

It’s easy to calculate your average order value using the formula ‘total revenue / number of transactions’. Knowing your average order value – and devising a plan to increase it – is a crucial part of any successful retail strategy for several key reasons, which we’ll outline briefly below.

Why is it important to increase average order value?

Simply put, if you can increase average order value across your store or online retail site, you’ll quickly start to notice various important benefits:

Revenue and profits both increase, as customers are spending more in a single transaction
Inventory turnover rates improve, meaning you can clear stock or bring in new items sooner
Marketing becomes more cost-effective, showing as increased ROI for your outreach spend

The latter is an especially important factor to bear in mind when developing strategies to increase average order value. In short, it’s typically much easier (and cheaper!) to retain existing customers while increasing their average spend than it is to attract brand new clients who aren’t already buying from you.

How to increase average order value for your store and customers

Offer finance options

Offering customer finance options is a great way to quickly increase average order value (AOV) for your store. Popular finance solutions and packages – such as 0% interest or finance-bearing options – are a proven way to eliminate many of the perceived hurdles that can deter customers from purchasing higher value items or bundles. Financing options are also highly effective at reducing rates of basket abandonment, whether at onlines point of sale or in a physical retail space.

Free shipping above [x] transaction value

We’ve all been in situations where we’ve been happy to spend a little more in order to benefit from free shipping, especially when it would’ve cost us almost the same either way. Most customers will happily add extra items to their basket in this scenario, as the perceived value of physical goods they receive is generally higher than that of intangibles like postage.

Create bundle deals

Another compelling way to increase AOV is to offer reductions on one or more products when bought together with another full-priced item. This is a particularly effective strategy if you’re able to bundle together items that have an obvious thematic link, or that ‘work together’ in some direct and practical way.

% off over a certain spend

A basic but fairly potent approach is to simply provide a money off coupon for spends above a certain threshold. In most cases, customers will be driven to add additional items to their order if their basket is already close to this threshold; again, it’s about perceived value, rather than just the raw transaction cost.

Cross-sell your stock

This tactic is extremely commonplace in online retail – it’s the little box or product ticker that shows up when browsing a particular item, often with a heading such as ‘other customers who bought this also liked…’ or similar. For customers already actively using your store, it’s a good way to encourage wider browsing.

Remind customers of previous interests

This one is very closely related to the above cross-selling technique – and again, it’s very widely seen in online retail. Be sure to keep your potential shoppers just a click or two away from the product pages for any items they’ve looked at previously.

Reward buyers with gift cards or vouchers

The gift card approach can be effective on two levels: by offering a voucher redeemable against future purchases, you’ll encourage customers to return and shop with you again. Moreover, by providing that voucher as a reward for spending above a certain amount in a single transaction, you’re directly incentivising a higher AOV.

First-time shopper discounts

This is a very common strategy for newer stores, where – by definition – a much higher percentage of your customers will be buying from you for the first time. It can have a considerable impact on early engagement figures, especially if you’re directly competing against similar retailers who also sell a specific product, brand or range.

Loyalty programmes

Similar to the basic concept with gift cards and vouchers – implementing some sort of transaction-based points system (as is often seen in supermarkets, for instance) is a great way to improve customer retention rates and keep buyers coming back in future.

Highlight total savings in baskets and trolleys

This one sounds like common sense, but a lot of retailers don’t leverage it as effectively as they might. By ensuring your customers’ basket shows a total savings amount for all the items in their trolley prior to purchase, you can dramatically reduce levels of guilt-related item abandonment when it comes to checkout time.

Share this idea

Share on Facebook Share on Twitter Share on Linkedin Share by Email

More ideas for you

Dog lying on artificial grass

8 Most Common Questions about Pet Finance

Learn more ›

New Year, New Decor: Finance for Home Improvement in 2021

Learn more ›
Money saving tips for Christmas

Duologi’s Top 10 Money-Saving Tips for Christmas

Learn more ›

Black Friday during a pandemic

Learn more ›
Consumer using laptop

The Secrets Behind Running an Ecommerce Business

Learn more ›

How We Offer Customer Finance

Learn more ›

The Facts About Customer Financing

Learn more ›

Why Offer Credit Facilities to Your Customers?

Learn more ›

How to Start Offering Finance to Your Customers

Learn more ›

Coping with change

Learn more ›

The Benefits Of Offering Dental Finance

Learn more ›

The Value Of Offering Payment Plans For UK Customers

Learn more ›

Why Responsible Lending Matters

Learn more ›
Shop assistant offering finance using a tablet

How to Offer Customer Financing in Your Business

Learn more ›
Businesswoman in showroom

What is Retail Finance & How Does it Work for Businesses?

Learn more ›
Patient getting dental treatment

The Benefits Of Offering Patient Finance

Learn more ›
Patients in waiting room

5 Tips to Attract More Patients to Your Practice

Learn more ›
PDS2 graphic

What is PSD2 And What Does It Mean For Online Retailers?

PSD2 is the Revised Payment Services Directive issued by the European Commission for innovation, improvement and internet payment safety. The first payment services directive, PSD1, was adopted in 2007, to establish the same set of rules on electronic and non-cash payments across the European Economic Area. The revised directive was adopted in 2015, and became applicable in January 2018.

Learn more ›
Abandoned cart

Refer rates and basket abandonments: how do yours stack up?

Basket abandonment. It’s a headache for online retailers and top of the to-do list for many digital marketers

Learn more ›
Security

Online fraud and how to fight it

Online fraud and how to fight it Trust is the foundation of any relationship – and the one between business and customer is no different. The customer must trust that the business is selling what it says it is – and the business must trust that the customer is who they say they are.

Learn more ›
Legal Sector

CCLs: The lowdown

If you’re offering credit to your customers via point of sale (POS) finance, then they’re something you need to think about. CCLs are issued by the Financial Conduct Authority (FCA) and are a crucial element in your overall business compliance. They also help to highlight your proactive and customer-centric approach

Learn more ›
GDPR represented by padlock

What actually is GDPR

The General Data Protection Regulation (GDPR) came into effect in the UK on 25th May 2018. It’s an acronym that has been covered widely in the media and discussed at length in company boardrooms and it has a major impact on the retail sector – but making sense of GDPR can be complicated. What actually is the ruling and what does it mean for your business?

Learn more ›
Consumer using laptop

Multi-channel retail: What do your customers expect?

Multi-channel is the new normal for retailers.

Learn more ›
Stick with me lights

How to keep your customers coming back

Building customer loyalty is a key challenge for any retailer. Whilst targeting new customers is important to broaden your target market and increase conversion rates, rewarding current customers is essential to enhance customer experience and customer satisfaction. This is to ensure the come back to you in the future and not to your competitors. The question is – how?

Learn more ›
Handshake

How to sell finance

So you’ve decided to offer point of sale (POS) finance solutions to your customers. Great!

Learn more ›
Man and 0

The myths and opportunities of 0% finance

The appeal of 0% finance offers to end users is clear – it’s free. It offers a quick and easy way for them to purchase the high-value goods or services they want, without a hefty upfront cost.

Learn more ›
Coins in jar

Acceptance rates vs subsidy rates

Thinking of introducing point of sale (POS) finance? You’re probably interested in how much it is going to cost.

Learn more ›

grow and
succeed

Time to talk about you

  • Home
  • About Us
  • Get in Touch
  • How Financing Works
  • Retail Finance Blog
  • Thinking of switching
  • New to Finance?
  • Jobs
  • Faqs
  • Resources
  • Complaints
  • Privacy Policy
  • Terms of services
  • Oaktree Capital
  • FCA
  • Get in touch
  • Call icon0345 521 1881
  • Mail icon sales@duologi.com

Connect with Linkedin


Duologi


Duologi is a trading name of Specialist Lending Ltd which is a limited company registered in the UK under number 10664999 at the registered address 10 Bressenden Place, London, SW1E 5DH, United Kingdom. Authorised and regulated by the Financial Conduct Authority. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

© Copyright 2021 · All Rights Reserved

Site by duologi Websites

We have placed cookies on your device to support a better browsing experience for you. By proceeding to use this website, you consent to the use of such cookies. You can find out further information about the Cookies used and what they are used for here Information and Settings.