How to Increase Your Average Order Value


Fri Nov 25 2022

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Eleven easy ways to increase AOV and make greater profits from your retail business

Bringing new customers into your store is not the only way to increase your monthly sales. By increasing your average order value, you can make greater profits from the same amount of customers, also offering them more value for their experience. It’s a win-win situation!

When customers spend more at your store, that means that they’re finding more of what they want and that you’re providing them with great value, a thing that will likely make them return. At the same time, you can get more profit without the effort of finding new customers, but making the most of the ones you already have. If you’re wondering how to increase average order value in retail, read on, we’ve got all the answers you need.

What is average order value?

Let’s cover the basics first, since you’ve probably Googled “aov meaning” once in your life (and there’s no shame in that!).

The average order value (AOV) is the average amount of money your customers spend at your store, whether offline or online.

The AOV is important to understand your customer behavior and to improve your product offer and marketing strategy. Benefits of increasing your AOV include: 

  • Increasing your overall sales revenue

  • Recovering the cost of new customers acquisition 

  • Increasing the lifetime value of your customers 

How to calculate average order value?

Another thing you have Googled, right?

The formula to calculate the average order value is as simple as this: you need to know your total sales revenue on a specific period of time and divide it by the number of orders.

Average Order Value = Total Sales Revenue / Number of Orders

Easy ways to increase average order value in your store

Now let’s take a look at ten ways to increase AOV, easy to implement and to try in your boutique.

  • Merchandising Tip #1: Implement Upselling and Cross-selling

Your store merchandising is one of the most powerful tools you have to increase AOV: you can display your products with thoughtful strategies in order to convince your customers to buy more and buy better.

Two of the most efficient strategies to reach this goal are upselling and cross-selling. Upselling means convincing a customer to upgrade the product they had originally chosen with a more expensive and better version, by displaying them next to each other or by having one of your sales assistants showing them the alternative. Cross-selling means convincing a customer to buy an additional product that is related to the one they have chosen and that can be used together. This is also done by displaying related products next to each other or by having a salesperson assisting customers and suggesting them possible product matches, such as with hair accessories and jewelry. Read our article What is Cross Merchandising to deep dive into this topic.

  • Merchandising Tip #2: Rely on Impulse Buys

Another great way to use retail merchandising to your favor is to display some smaller items near the counter to push impulse buying. It’s a good old classic, but very effective. Choose your lowest price point items, and arrange them in an attractive way. From hosiery to home textiles and travel accessories, the options are many.

If you’re interested in knowing more about product merchandising, check out our recent article  How to Display Your Store Products in the Best Way.

  • Offer Bundle Deals and Bulk Options

Create bundles of products that are normally used together, offering your clients some useful kits that have a lower price point than if they were buying the different products separately. This will create in them the need for the whole bundle and secure you a higher order.

Offering bulk options is also an effective idea, especially on essential items such as intimates and t-shirts. Create specific offers to push your customers to stock up on certain categories saving money over a longer period.

  • Label Your Best Sellers and Display Them Efficiently

Your best-selling items are powerful sales drivers and you should use them to their fullest potential. Label them as best sellers to immediately spark the curiosity of everyone that enters your store and display them where they can be seen properly. Knowing that other people love a product will make that product immediately more interesting for your clients.

  • Set Order Minimums for Free Shipping

If you have an online store and are wondering how to increase average order value for e-commerce, consider setting an order minimum for free shipping. This will easily encourage your customers to shop more and increase their AOV in order to be eligible for free shipping and save money on that.

  • Offer Discounts and Gifts Above a Certain Spend

Another way to use purchase thresholds to your favor is to offer discounts or small gifts after a certain spent amount. You can give customers 10% OFF on their next purchase when they spend $200 for example, or gift them a small key chain or other small leather goods when they reach the same amount. Consider what could work for your business strategy and test your best options.

  • Start a Loyalty Program

If you haven’t got a loyalty program in place yet, consider starting one, as it can benefit both your sales and your customer retention. Set different goals for different tiers, so that your customers will have a clear pathway to follow and an incentive to achieve their highest tier. The more they keep spending in your store, the more rewards they’ll get. 

  • Give your Customers Customized Experiences

Through data, you can study your customers’ behavior in order to offer them personalized and targeted experiences: launch specific marketing campaigns to target specific audiences and offer personalized shopping experiences that will make them spend larger amounts. It can be the personalization of a product, a discount on a category they already bought into, or an incentive to buy your best-selling crossbody bags.

  • Have a Flexible Return Policy

Your return policy makes a big difference when it comes to increasing AOV: your customers will be keener on buying more if they know that they can return items with not much stress. A flexible return policy will likely ease any hesitancies that customers may have about making a purchase. Once you have established it, make it clear to your customers so that they’re aware of their options.

  • Have Limited-Time Offers Available

Another smart answer to the question of how to increase AOV in retail, is having some limited-time offers available. Just like impulse buys, temporary promos turn on an emotional urge in customers, who will not want to miss the chance to get something more for less.

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