You've done it — traffic is pouring into your ecommerce website and you're actually converting a good percentage of them into customers. 

But upon looking at your KPIs, you come across a new problem:

Purchases are up, but profit is flat.

That's when you realize that you should've paid attention to your Average Order Value (AOV) metric.

In simple terms, AOV is the average amount your customers spend per transaction. This can be calculated by dividing your total revenue by the total number of orders within a specific period.

Read on to learn expert strategies that will help maximize your AOV. We'll cover actionable tactics, tools, and real-world examples to help guide your efforts. 

Let's get started.

Why AOV Matters for Ecommerce Brands

AOV ensures you squeeze the most revenue out of every customer. 

Remember, you're already paying to get visitors to your ecommerce store and achieving a good conversion rate. Optimizing these aspects further — particularly traffic generation — will have diminishing returns in terms of profitability. 

Focusing on AOV, on the other hand, offers an opportunity to increase your revenue without bloating your Customer Acquisition Costs (CAC). 

The higher your AOV, the bigger your ROI from your advertising, marketing, and Conversion Rate Optimization (CRO) efforts. It also has a ripple effect that amplifies your Customer Lifetime Value (CLV), which is crucial for sustainable ecommerce growth. 

TL;DR:

• Higher AOV increases ROI from your advertising and marketing spend.
• Optimizing AOV can increase revenue without requiring additional CAC.
• AOV works hand in hand with CLV to ensure long-term success.

What exactly does a good AOV look like? 

Looking at the broader ecommerce industry, the average AOV sits at $124.76 in 2024 — marking a 4.9% decrease from last year.

Diving into specific industries, here are the AOV benchmarks you should pay attention to:

• Beauty and Personal Care — $73
• Consumer Goods — $218
• Fashion — $120
• Food & Beverage — $110
• Home — $351
• Multi-Brand Retail — $90
• Luxury & Jewelry — $391
• Pets — $80

Without further ado, here are six proven strategies that will help you improve your AOV and maximize your ecommerce revenue.

1. Upselling and Cross-Selling Techniques

Upselling and cross-selling are the bread and butter of optimizing AOV.

In simple terms, upselling is the practice of encouraging customers to buy a more expensive version of a product — thus, increasing the cost of their order. This can pertain to premium add-ons or a higher-end model of the product altogether.

For example, big-name companies like Apple have been upselling customers to their "Pro" lineup for their MacBooks, iPhones, iPads, and AirPods. Their go-to strategy is to highlight incremental price differences in exchange for significant feature improvements.

While upselling involves promoting more expensive products, cross-selling is all about getting customers to add more items to their cart. This strategy typically highlights add-ons or complementary products, like cooling stands and desk mats to a laptop purchase. 

Amazon does this well with its "frequently bought together" product page section:

You can use tools like SellUp for Shopify to unlock a variety of upselling and cross-selling opportunities. This includes a "frequently bought together" section, add-on windows, limited-time offer popups, and more.

A more elaborate strategy is to use an AI-powered ecommerce personalization platform like Rebuy. This works by dynamically presenting product recommendations based on historical customer data, helping you reap the full benefits of upselling and cross-selling for AOV.

Check out these tips to boost your results with upselling and cross-selling:

• Clearly and concisely highlight the benefits of your top-shelf products.
• Visually show side-by-side product comparisons. 
• Naturally, weave in upgrades or add-on offers to prevent online shopping fatigue.

2. Implementing Product Bundles and Kits

Speaking of cross-selling, one specific strategy you can try is to sell products as bundles — preferably at a slightly discounted price. 

This makes it easier and more enticing for customers to buy a set of products in one checkout. 

For one, product bundles trigger a cognitive bias in which customers think they're getting a huge discount. But in most cases, the savings or discount per item is actually minimal. 

To better understand this, take a look at how beauty, skincare, and grooming brands frame their bundle discounts — like Dollar Shave Club's Member Favorites Kit. 

Bundles also allow you to hammer down on the benefits of purchasing complementary products. 

For example, brands sometimes offer bundles with a value proposition akin to "unlocking the product's full potential" or "getting the whole experience." 

Neat, right? 

The downside is, implementing product bundles from scratch might take hours of mind-numbing work. This includes planning bundle combinations, creating new pages, and setting discount rates. 

Luckily, you can streamline the entire process with tools like Bold Bundles for Shopify or Product Bundles for WooCommerce. 

Here are a few additional tips to remember:

• Leverage the anchoring effect by showing a high-priced item first, then presenting the bundle with a slightly higher price tag (making it seem like a much better deal). 
• Clearly highlight the customer's savings for buying the bundle.
• Make sure to bundle items that complement each other.

3. Tiered Discounts and Volume Pricing

Another way to raise your AOV is to offer tiered discounts and volume-based offers, which essentially incentivize customers to spend more.

Tiered discounts work by offering bigger savings for higher transaction values. 

For example, customers who spend $50 on a transaction can get 10% off, whereas those who spend $100 will get 25% off. 

Or, it can also be a single discount offer that can be unlocked if the customer reaches a minimum order value. A good example would be Lane Bryant's 20MORE promo, which incentivizes purchases above the $125 threshold.

Volume pricing, on the other hand, rewards customers who buy in bulk. This can be in the form of discounts or other perks, like "buy three, get one free" or higher discount rates based on quantity. 

Here's an example from The Yorkshire Bedding Company:

To implement this strategy, you can use the tiered discount scripts found here. Or, simplify the process with the help of a third-party app like Discounty.

Make the most out of your tiered discount strategy with the following tips:

• Promote volume-based offers through shareable coupon codes.
• Instill a sense of urgency by setting expiration dates for offers.
• Track and display the remaining amount customers need to spend to get a discount.

4. Leverage Free Shipping Thresholds

You can spice up your tiered discount or volume pricing strategy by offering free shipping. This is a huge deal for long-distance customers who might be considering a closer retailer to avoid high shipping fees.

Just remember the golden rule of creating free shipping offers: don't lose money doing it. 

Calculate a reasonable threshold that's well above your AOV. For example, if your AOV is $65, you should offer free shipping for orders above $80. 

Also, consider adding more safeguards to ensure you don't bleed money from this offer. For example, KIM+ONO only has a free shipping threshold for orders made in the U.S.

Below are three additional tips you should remember:

• Consider different free shipping thresholds for different countries.
• Be sure to show clear free shipping guidelines to avoid making customers feel misdirected.
• Choose an affordable but reliable shipping service. 
• Show a tracker or progress bar to help customers know how close they are to the free shipping threshold.

5. Using Personalization to Boost AOV

We briefly touched on personalization earlier with the Rebuy platform, specifically in the context of upselling and cross-selling.

That's just the tip of the iceberg. 

Shopping personalization goes well beyond in-store product recommendations. You can also send curated product bundles, kits, tiered discounts, and other offers through other channels like email and SMS. 

The trick is to ensure your messaging is tailored to your customer's previous store interactions and purchase history. 

This is where intelligent customer experience platforms like Klaviyo and Nosto come in. 

With these platforms, you can utilize a variety of personalized shopping experiences — from dynamic product bundles to personalized search results — without relying on heavy coding.

Keep in mind that personalized experiences are a massive win for customer loyalty. 

Statistics show that 65% of customers expect companies to provide experiences tailored to their preferences and needs, especially considering the amount of data that retail brands collect.

Just remember that even personalized experiences can be overwhelming to customers. That said, here are some ideas to make sure personalized offers don't rub customers the wrong way:

• Consider delaying tailored recommendations via email. 
• Monitor AI recommendations to make sure they show relevant offers to the right customer.
• Just like upselling and cross-selling offers, avoid intrusive personalized promotions (i.e., full-screen popups).

6. Improving Website Performance

Last but not least, you need to zoom out and look at other aspects of the user experience that influence customer behavior. 

Your ecommerce website's loading speed, in particular, affects virtually every stage of the customer journey. 

For instance, upon arriving at your website, a big chunk of your customers expect the page to load in less than three seconds — that, or they're gone. 

This brings us to a question by growth and marketing expert, Ari Gayer, in our sit-down on real marketing fundamentals every business should learn:

"If you have someone's attention for three seconds, how can you maximize that opportunity?" 

The answer, of course, is to make sure your page content is fully available before three seconds are up.

"The more information they have about the site, the more pages they explore, the more likely you are to convert them, as opposed to them spending those entire three seconds loading just the first page," says Ari Gayer.

Now, improving your website's performance requires a multifaceted approach. Some of the strategies you need are:

• Compressing assets like images, JavaScript, and videos. 
• Reordering the priority of resources like background videos and widgets to reduce initial load time.
• Utilizing caching to improve the loading time of repeat visits.

If you're looking for a quick fix, consider turnkey solutions like Nostra AI's Edge Delivery Engine. This connects your ecommerce website to within 50 milliseconds to the vast majority of internet users — anywhere in the world.

This is possible through Nostra AI's network of edge delivery servers, which are strategically distributed across the globe.

Got your attention?

If you're interested in the edge delivery advantage, see it in action by booking a demo here.

Real-World Examples

Ready to start pulling more money from your customers' pockets? 

For your inspiration, let's take a glance at real-world examples of brands boosting their AOV through strategies you can replicate.

First up, MìLà is a modern Chinese food brand that managed to increase its revenue per customer by a sizeable 4.65% with just one strategy: deploy their website through Nostra AI's Edge Delivery Engine.

After improving MìLà's loading time by 240 milliseconds, the company was able to increase sitewide performance by up to 25%. This resulted in a 4.65% lift in their revenue per user metric.

Take note that the 4.65% increase is the result of just one move, which is to utilize edge delivery. 

This next example focuses on Planet Beauty, a skincare and cosmetic brand that achieved a 12.37% AOV increase using multiple strategies. 

More specifically, Planet Beauty rolled out the following changes to its site:

• Offering dynamic bundles that align with customer behavior
• Highlighting complementary product suggestions on product pages and carts
• Upselling customers to a subscription option

How to Measure and Track AOV Effectively

Lastly, remember that it's impossible to improve something you don't measure.

That said, let's wrap up this post by going through the essential tips for tracking and improving your AOV:

Use the Right Tools

There are several tools capable of tracking AOV trends over time. 

Some, like Shopify Analytics, are built into the core ecommerce platform. Others, like Google Analytics 4, involve more setup steps but are ultimately more flexible.

Analyzing AOV changes over time lets you determine whether your strategies are working or not. Just remember that some tools may track AOV differently, like how Google Analytics measures multiple "average revenue per user" metrics with slight differences.

Here are other tools you can use to track AOV:

• WooCommerce Analytics
• Klaviyo
• Adobe Commerce
• Stripe (and similar payment processors)

Identify Priority KPIs

Aside from the actual AOV metric, you should also define other KPIs related to your objectives. 

Here are some examples:

• Cart Abandonment Rate — This KPI can potentially skew your AOV readings, especially if customers leave your website after abandoning high-priced carts. Diagnosing the causes of cart abandonment also leads you to improvement opportunities that can increase your AOV.  
• Traffic by Source — Not all traffic is made equal. Traffic from remarketing ads, for example, may be more likely to purchase expensive products than organic traffic.
• Bundle Page Conversion Rate — The better you optimize your bundle pages, the more you can sell. This, in turn, can give your AOV a boost.

Tip: Don't forget to check industry benchmarks to help you set realistic goals with these KPIs.

Iterative Testing

With all the necessary data pinned down, your strategy will now revolve around two things: iterate and test.

Experiment with small changes to the shopping experience, be it the size of your popups or the words in your product descriptions. Track the data, compare the results, and decide which changes are worth keeping.

To get faster results, use split testing and evaluate multiple page variations at the same time. This allows you to collect more data in less time, which will speed up your iterative testing efforts.

Conclusion

AOV is a crucial ecommerce metric that plenty of brands tend to overlook.

Remember, AOV isn't just about maximizing short-term revenue. Done right, it can lead to lasting revenue growth by encouraging future customers to spend more. 

Now, the ball is on your court. 

Which strategy (or strategies) above do you think will have the biggest impact on your bottom line? 

Start with strategies that match your ecommerce business's niche, customer base, and revenue goals. From there, feel free to start branching out to other strategies that you have the tools and knowledge for.

Good luck!