Average Order Value for eCommerce Stores: Stats and Facts
- 5 months
There are many ways to grow an eCommerce business. You can find more customers, expand to new regions, invest in ads, and do much more.
But finding more customers isn’t the only solution for growing your store revenue and sales. One of the best and easiest ways to bring in more sales is to invest in increasing your Average Order Value. It is as simple as it sounds. If you can compel customers to spend more on each order, you will make more money, no?
Well, there is more to it, and we will discuss everything in this article, along with some stats and facts on why we should consider AOV as one of the important eCommerce Metrics.
So, let’s get started.
What is the Average Order Value in eCommerce?
The AOV is the average amount of money consumers spend per order while shopping in your eCommerce store. For eCommerce businesses, it is a very important benchmark for understanding your customers and growing sales.
By understanding your Average Order Value and which products are bought more frequently, you can recommend the same set of products to others, and it would boost your revenue by many folds. Some of the other benefits of increasing Average Order Value are:
- More revenue in less time
- Increased overall sales
- No need to spend on acquiring more customers
- Increased customer lifetime value
The formula to calculate AOV is:
5 Stats & Facts About Average Order Value that You Can’t Ignore
Here are five statistics that prove why you can not ignore focusing on the AOV if you want your eCommerce store management game all set for success:
1. Orders Placed from a Desktop Had an AOV of $120.51 (Highest) in Q3 2020
That must be shocking for many, but it is true. As compared to mobile and tablets, desktops have a higher average order value. Even though mobile devices contribute to more than half of the total organic traffic, they lag behind desktop sales, as per Statista.
Moreover, when we plan to purchase a product that is expensive, it is human nature to purchase it on a bigger screen for more clarity. A big screen provides more convenience, helps us conduct research clearly, and provides us an overall bigger picture of the item we are purchasing.
But, that doesn’t mean you should ignore optimizing experiences on mobile. While desktop drives conversions, mobile drives traffic.
2. Loyalty programs can increase Average Order Value by nearly 14% on average
If you are planning to increase your brand loyalty or average order value, it is a great idea to invest in loyalty programs. More loyalty means more AOV, resulting in increased sales.
According to stats, customer loyalty programs or campaigns can increase AOV by up to 14 percent on an average while also improving customer retention rate.
Your buyers are more likely to visit your store more often if you reward them for it in one way or the other. This tactic demands some investment but is worth trying for eCommerce store owners.
3. New customer acquisition costs have increased by 50% in the past five years
Basically, customer acquisition is the process of acquiring new customers for your business. However, in the last five years, customer acquisition costs have risen by over 50% due to increased competition in the market.
Then, how do you create a sustainable strategy to grow your brand? The answer is simple. By focusing on customer retention, you can easily cut down CAC while at the same time increasing your profits. If customers start shopping more often in your store, you will need to spend less on acquiring new customers, and your AOV will automatically go up.
4. Product recommendations have a proven direct impact on AOV
Providing customers with personalized product recommendations is a great way to increase your average order value. It not only helps eCommerce retailers increase the AOV but also brings customers back after the current session.
According to research, return visits to products that are recommended have around 40% higher average order value than return visits for non-recommended products. In addition, personalized product recommendations can increase purchase rates by 70% and AOR by 33% – which is incredible for retailers.
5. A loyal customer’s AOV is around 5% higher than a new buyer’s
Your most valuable customers are your brand advocates. These people might be posting about your business on different sites or prescribing your products to their friends. This behavior not just helps you improve your online visibility but also increases your AOV.
Loyal customers are extremely important for your business. Their typical order value and size are around 5% higher than a first-time purchaser. They also engage more with your online store (up to 85% more) than the people who are new to the store. Catering to these customers can help you grow faster by increasing their customer lifetime value and improving sales.
So, these were the important stats and facts that every eCommerce retailer must know about average order value – an important eCommerce metric. If you plan to grow your business to new heights, it is crucial that you pay attention to improving your order value and size. But, it is not as easy as it sounds. You need proper planning and strategy to compel your users to buy extra items to benefit your business. If you need help of eCommerce marketing experts to achieve this level of power, contact our team now!