Nov 12 2008

Tips for Boosting Average Order Size

In today’s tough economy, no business is immune to the nationwide belt-tightening efforts. Penny-pinching consumers are spending less and saving more, resulting in sagging sales for eCommerce stores, especially those that peddle non-essential goods and services.

Until things improve on the financial horizon, online sellers may need to shift their marketing focus. While it may not be the ideal time to attract new prospects, you can help to recoup revenue losses by working at boosting the average size of the orders that are still coming in. This retention strategy leverages the loyalty of your existing customers to pad their shopping carts—and your bottom line.

Boosting average order size is easier than you might think. Below are some simple strategies you can start using today:

Profitable packaging

A bottle of perfume is a nice enough token for a birthday or anniversary, but when it’s combined with scented lotion, shower gel, and an exfoliator—all packaged neatly in an elegant presentation case—you’ve got a gift set that’s sure to impress. The benefit for you? When offering a pre-packaged collection of related items, the $50 perfume suddenly becomes an $85 deluxe gift set. Perfect for new moms, Bellacroft.com offers a deluxe Special Delivery System that makes a much bigger impact than the individual products would on their own.  From coffee to toiletries to Tupperware, the opportunities for product gift sets are virtually limitless.

Clever Cross-selling

Make the most of your active customers by cross-selling companion products whenever and wherever possible. This is a time-tested method for capturing impulse sales. Ideally, cross-sells and up-sells should be positioned on all product pages, as well as on the shopping cart and at various points throughout checkout. Consistency is key—if you place up-sells on one product page, for instance, they should appear on all other product pages. As a general rule, don’t place more than three or four on a page—any more will run the risk of overwhelming the customer.

Also, make sure the cross-merchandising suggestions are logical complements to the product being sold or purchased: if the customer has just added a baby crib to their cart, for example, crib sheets and mobiles are great up-sell choices. Alternate cribs—or completely unrelated items—won’t be as effective. If your budget allows, you may consider using a relational database to help you suggest dynamic cross-sells based on consumers’ shopping behaviors, a strategy flawlessly achieved by Amazon.com. In the absence of this sort of technology, you can manually select top-selling items, brand-new products, or gift cards as enticing suggestions.

Another way to implement cross-sells is to present a list of “expert recommended” items, or suggestions of products that other customers are buying. Don’t underestimate the power of influence—despite a strong desire for uniqueness, shoppers continue to be easily swayed by the opinions and preferences of others, especially if the referrals are from respected names in the industry. For example, someone shopping for decking materials from HomeDepot.com may be impressed by a list of items Bob Vila claims are essential for successful deck-building.

Cross-sell and up-sell products should span low to moderate price points and/or valuable discounts, as customers are more likely to splurge on last-minute purchases if they feel like they’re getting a deal.

Follow up with up-selling emails

It’s become the industry standard to send a thank-you email after every online order, confirming the purchase was completed, listing the items in the order, and verifying pricing and shipping information. This email provides eCommerce merchants with a perfect opportunity to work in some subtle cross-selling.

In most cases, the customer will receive the order confirmation email just minutes after they’ve placed an order with you, so you’re likely to catch them when they’re still in buying mode. You’ve obviously already earned enough of their trust to garner one sale, which increases the chances that they may click on an up-sell in the email and convert again—especially if the merchandised item is a logical complement to what they’ve just purchased. Other strategies for turning these emails into revenue boosters include adding free shipping offers (which the Gap does, for orders over $100), special limited-time discounts, and lists of best-sellers.

As always, it’s important to include quick links back to each of your site’s main categories from the confirmation email.

“Get this look”

One of the latest trends with online apparel manufacturers, such as OldNavy.com and Gap.com, is to offer “shop by outfit” packages, where all of the individual components are bundled together to create a cohesive ensemble. This strategy has expanded to other product categories as well—this past summer, Frontgate.com offered a “buy this look” functionality for outdoor furniture, allowing consumers to purchase an entire patio set, complete with furniture and accessories, with just one click.

Bundled purchasing gives the consumer the confidence they need to achieve a designer look without hunting down coordinating items. Today’s busy shoppers simply don’t have the time to do that, and many feel like they don’t have the design savvy to mix and match different items to achieve the desired effect. When you present them with a pre-packaged outfit, room, or scene, you’re providing them with a time-saving service while also significantly boosting order size.

Play up discounts

In these tight times, it’s much easier for customers to justify a purchase if they feel like they’re saving. Whether you’re offering free shipping, was/now pricing, or a site-wide percentage discount, be sure to give prominent placement to all promotional offers. Increase the sense of urgency by assigning offers an expiration date and labeling them as “limited-time” events. Volume discounts (“buy two or more solar lights, save 20%”) are another great way to encourage the purchase of multiple units and boost order value.

Get savvy about service

Racking up add-to-carts isn’t the only way to boost average order size. For certain products, such as computers, appliances, and other major purchases, offering an extended warranty can be a highly profitable up-sell—and an easy one, at that. Other ideas for fee-based services include in-home delivery, installation, or a technical support plan.

Test, test, and test some more

As with any online marketing strategy, experimentation is key. One of the beauties of eCommerce is the ease of changing content and testing varying applications. Different strategies can work for different product categories and at different times of year. When implementing any of the recommended tactics above, experiment with different price points, designs, and promotions until you find the right combination that succeeds in netting you meatier order totals.

Blue Acorn

For all your ecommerce needs, Blue Acorn provides an integrated team of designers, developers and strategists who work together to deliver engaging shopping experiences for your customers and efficient processes for you. Whether you’re looking for a fundamental or incremental change, the team at Blue Acorn will adopt your ecommerce KPIs as our own and deliver the results that matter most to your organization. For brands like The Real Real, Peter Thomas Roth, and Too Faced Cosmetics, we provide services such as ecommerce design, systems integration, A/B testing, new feature development, and personalization.

5 Comments

George Wynn
Nov 14 2008

Great article! A personalized e-mail is one that I came automatically with OSCommerce, but I will personalize it a little more because of your writing.

Thanks.

Reply
Khalid Saleh
Nov 18 2008

Excellent list of tips. We continue to experiment with Cross-selling and up-selling. What works with one client, doesn’t always work with another. So, in the sense, your last comment about testing gives a very nice conclusion to the post.

Reply

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