How to Increase Your Average Order Value – eCommerce Strategies

Holiday Shopping

For eCommerce store owners and marketing agencies, the end of the summer means nothing more than a reminder to start planning about the Holiday Season right away if you want to stay ahead of the game.  What used to be Thanksgiving, Black Friday and Christmas shopping, has now expanded into a long holiday shopping season that starts around Halloween time and goes on until the end of the year including relatively new arrivals such as Small Business Saturday, Cyber Monday, Green Monday, Boxing Day and every shopping day in between.

If you own an online eCommerce business, (or a physical retail store for that matter) you already know that this is the time of the year that can determine whether you end up your fiscal year successfully or not.

While these wider variety of retail days have effectively spread the holiday rush across a wider range, they’ve also made planning ahead for your holiday campaign a more complicated affair.

However, the more complex things get, the more opportunity you have to jump ahead of your competitors.  Below are twenty critical facts and figures that will help you focus your ecommerce efforts in those areas that you feel apply more for your particular store.

Each merchant has their own set of worries and concerns as the fourth quarter of the year starts showing up on our calendars. However, according to a recent Shopify study, there are some concerns that are very common across the board.

Top five concerns for holiday eCommerce

  1. Rising ad spend: 80.4%
  2. Customer service needs: 74.5%
  3. Inventory: 72.5%
  4. Shipping and fulfillment: 64.7%
  5. Returns: 56.9%

Rising ad spend is an even greater concern when you consider average order value (AOV) doesn’t generally rise commensurately. Flat holiday AOV is likely the result of:

  • Increased competition for holiday shoppers
  • Bargain hunters taking advantage of deep discounts.

To boost AOV (without necessarily increasing your rates/prices) consider these three holiday marketing strategies:

#1: New customer acquisition

Begin paid advertising to build your audience before costs soar (i.e., a delayed-attribution model and heavy emphasis on retargeting).

#2: Engagement with existing customers

Use behavioral data like past-purchases and real-time personalization to segment your users for email marketing before and during Black Friday Cyber Monday.

#3: Offers and deal structures

Experiment with product bundlingtiered discounts, and shipping based on spending thresholds.

New customer acquisition

You already have something in common with top-performing brands; you’re likely targeting the same channels to acquire new holiday customers. Over time, the quality of all click-throughs will deteriorate and your marketing performance will suffer.

Top five channels for new customers

  1. Facebook paid: 72.5%
  2. Instagram paid: 58.8%
  3. Search paid: 56.9%
  4. Instagram organic: 41.2%
  5. Search organic (SEO): 35.3%

But it’s the unique ways top brands use these channels that differentiates their results. Other brands are targeting the same consumers on the same channels. It’s crucial that your approach to these consumers and channels be different. Remember, ad spend increases during the holidays while AOV holds steady. To combat this margin crimping phenomena, high-growth brands execute differently in several key ways:

A) Buy traffic early to build social audiences

Run engagement ads during the weeks leading up to Black Friday to create product-aware audiences that are primed for your holiday ecommerce campaigns. You can also do this by running click-through ads to build retargeting audiences.

The objective is to generate interest early so new customers return and purchase from you during the holiday. Get soon-to-be customers excited with online gift guides that preview your offer. Remain top-of-mind by remarketing routinely.

Investing in PPC several weeks prior to the holidays will negatively impact your return on ad spend (ROAS) initially as you’re spending more money earlier. But starting earlier, when paired with an offer that lifts your AOV, can lift conversion rates and maximize paid traffic profitability.

For example, by using tiered discounts, you can directly increase your AOV.  The tried and true “the more you buy, the more you save” strategy has proven to be very effective as the discounts increase as shoppers add more to their carts:

  • Buy 1, get 30% off
  • Buy 2, get 40% off
  • Buy 3, get 50% off

The more a customer purchases the more they save. The resulting increase in AOV usually means an even greater ROAS since a single ad or ad group will suffice to promote the offer.

B) Focus on high-intent keywords

Narrow your Google Ads to phrases that indicate intent to purchase like:

  • “buy [blank product]”
  • “best deal on [blank product]”
  • detailed product queries: branded terms for you and your competitors
  • product-specific searches (e.g., women’s red canvas flats)

C) Customize your holiday offer

Offer customers a holiday deal they can’t get any other time of year. Uniquely bundle products and highlight the the package with custom Black Friday branding. This can increase several key performance metrics (such as AOV, ROAS and Conversion Rate) even if the products you offer aren’t necessarily in-season.

In a future article, I will focus on techniques to engage with your current customers and how to create offers and deal packages that will increase your AOV.

In the meantime, if you would like to receive eCommerce and Amazon sales techniques on a regular basis, Subscribe to The Edge Digest and receive weekly news directly in your INBOX.

Thank you for reading.  Until next time, this is Manuel Gil del Real (MGR)

Sources: Shopify, Amazon, Google Ads, Facebook Marketing

Photo by Irina Iriser on Unsplash

2019-09-23T15:26:20-07:00

About the Author:

Manuel Gil Del Real is the owner of MGR Consulting Group, an Interactive Marketing Agency providing marketing solutions to companies worldwide. He’s also an auto racing enthusiast and a blog author who enjoys sharing his thoughts and ideas on eCommerce, SEO, Social Media, Website Design, Video Marketing Internet Marketing, entrepreneurial advice, lifestyle and travel experiences among many others.