3 Effective Ways to Boost AOV & UPT for E-commerce Stores
TL;DR — We have three excellent recommendations for you to get the most out of your online sales — bundle & save promotions, strategic cross-selling and up-selling, and discount threshold indicators.
As a digital agency that partners primarily with online businesses, we’re often tasked with driving initiatives that will contribute to optimizing a handful of key e-commerce metrics. Now, of course, there are merchants who might engage us to embark on a creative journey to overhaul the user experience and visual design of their online stores, but even these types of clients have their eyes set on the ultimate prize — sales. And rightfully so. You can have the most beautiful website in the world, but if you’re not hitting your business targets then you’ll be out in the cold before you know it.
With the number of times we’ve gone through optimization exercises with our own clients, we wanted to share some of our learnings with the e-commerce community. Hopefully you’ll be able to find some success of your own using the tips from this post.
So when it comes to optimizing an e-commerce website for sales, we’ve found that most of our clients typically focus on key performance indicators (KPIs) like units per transaction (UPT), and average order value (AOV) to help gauge the health of their online business. And for most merchants, particularly those with more than a single SKU in the product catalog and willing to offer promotional discounts, you’ll be able to use the following tried and true methods to boost UPT and AOV.
Bundle & Save promotions: These types of offers typically work in the following way: you offer a group of your products together as a ‘bundle’ at a lower cumulative price than purchasing each of the items individually. This type of merchandising usually work best when: the products in the bundle are naturally complementary — think sheets + pillow + comforter, for example; you’re able to offer a compelling discount — think ‘grab the bedding set and save 20% today’, for example; and when presented on key product-focused pages and/or downstream in the conversion funnel — think product listing pages (PLPs), product detail pages (PDPs), and the shopping bag, for example.
One thing to keep in mind though when presenting these types of offers (or offers in general) in the shopping bag is to keep the bundle relatively simple such that it doesn’t require users to leave the funnel to investigate and gather information about the products. Moreover, if you have the technical capability to do so, it’s best to incorporate logic into these specially merchandised offers that determine when and what to show based on items the customer has actively shown interest in purchasing.
Strategic cross-sells and up-sells: Similar in concept to bundle promotions, strategic cross-selling and up-selling is based on the idea that by presenting your would-be customers with well-timed offers as they’re browsing or attempting to purchase your products, you can potentially see a lift in UPT and/or AOV. Before we dive in here, it’d be helpful to first clarify the difference between the two types of offers as they are often (and incorrectly) used interchangeably. Cross-sells refers to merchandising items that are complementary to the item in question — think sneakers and sneaker cleaner, for example. Up-selling on the other hand refers to merchandising items that are typically substitutes for the item in question — think 40 inch tv and 50 inch tv, for example.
In our experience, we’ve seen merchants implement up-sells most successfully on PDPs where the customer is in a specific part of the shopping journey where s/he has expressed interest in a particular type of item, but is likely still open to considering alternatives as s/he investigates the options. Similarly, cross-selling can also do well on PDPs, but usually perform better when presented after the customer has expressed even stronger purchase intent in an item, like after adding an item to cart (via an add to cart notification or similar), in the shopping cart, or even as far downstream as checkout! With up-selling you could theoretically present a customer with a bundle option as a substitute, thereby increasing both AOV and UPT, but in most instances merchants are simply increasing AOV here and keeping UPT constant. Cross-selling almost always results in a lift in both AOV and UPT, because the customer is purchasing the original item s/he was interested and then some.
The last point to make here is that the word ‘strategic’ is key. Given how easy it is to roll out some form of product recommendations on a typical e-commerce site nowadays, most users will be unmoved at best, and unnerved at worst if the recommendations are neither relevant nor compelling. Keep in mind that providing your users with a good user experience should always take precedence over trying to squeeze out every last dollar into your AOV and UPT buckets. A happy (and unbothered) customer will more likely provide higher lifetime value (LTV) to your business than one constantly feeling like they’re being hit over the head with irrelevant advertisements and promotions when shopping on your site.
Discount threshold indicators: This tactic requires a bit more technical involvement, but can be extremely powerful in motivating your customers to add more items (and value) to their shopping carts if you can pull off the execution. The premise is rather simple: encourage customers to buy more in order to receive special offers, most commonly discounts, that are based on spending thresholds. For example, spend $50 get 10% off, spend $100 get 20% off, and so on. That more or less covers the basic rules that govern the promotion.
Now, in order to make it more compelling, we’ve found that merchants who are able to translate the promotion into a visual component, say a progress bar, tend to do even better in nudging customers into action. You can think about this in terms of gamifying your shopping experience and allow customers to achieve different ‘levels’ of discounts. Gamification works surprisingly well in a variety of contexts, and spending money turns out to be no different.
As mentioned earlier though, this type of initiative usually requires some technical intervention to properly execute. The other two recommendations can be pulled off in some format with the majority of most mainstream e-commerce platforms using out-of-box features or with simple extensions/applications.
And there you have it — an introduction to three relatively straightforward tactics that will very likely help move the needle on your e-commerce store’s UPT and AOV. There’s much more to say about each of these suggestions, so if you’re interested in chatting about how to optimize your e-commerce store feel free to drop us a line!
And if you’re a Shopify Plus merchant, one last shameless plug before you go — be sure to check out our app Order Bump which will jumpstart your ability to boost AOV and UPT with a simple checkout promotion 😉
