If you have high conversion rates, it might seem like you’re doing everything right in Google Shopping. After all, you want consumers to follow the path from your Shopping ads all the way through to a successful checkout. However, if you find yourself with the low average order value (AOV) blues despite high conversion rates, don’t fret.
Low average order value can affect a variety of business types. Beauty brands, pet suppliers, and discount clothing outfitters are a few examples of retailers, among many others, that may seek strategies that drive higher average order value.
We’ve assembled a playbook to guide you on your quest to increase average order value from your unique position as a brand with low AOV and high conversion rates.
1. Upselling and Cross-Selling
It’s important to consider basket size, the number of items sold per purchase, when thinking about average order value. Even if the average price point across your catalog is $30, the AOV might be $100, depending on how many items shoppers typically purchase in an order.
When you understand how basket size affects average order value, you can learn where to encourage upsells and cross-sells on the site and increase your AOV in the process.
One strategy to help achieve upsells and cross-sells is to implement a recommended products feature on your site. This encourages customers to add complementary or accessory products to their carts. Evidence from BigCommerce shows you can increase your average order value by 50% by implementing this strategy.
2. Take Advantage of Merchant Promotions
Another tactic is using Google Merchant Promotions in Google Shopping. You can offer free shipping or a free gift on orders greater than your average order value to increase revenue.
This approach can help boost average order value by incentivizing shoppers to add more products to their baskets. Additionally, by showing these offers right in the Google Shopping ad, your products are more likely to get shoppers’ attention.
A great example of the effectiveness of this strategy comes from a University of Florida study published in The Journal of Retailing. The research revealed that the average order value for a store offering “free shipping for orders over $75” was $64.68 compared to an average order of $46.04 when the same store offered “free shipping for everyone.”
3. Setting the Right Bid for Every Product
Even with a smaller catalog, it’s impossible to evaluate the data required and take the time to bid each of your products individually. But, there are tactics you can deploy to get a leg up on your competition and find the right bid easily and efficiently.
One great place to start is the Dimensions tab in AdWords (shown below). It enables you to adjust bids to reduce spend on clicks that are too costly or unprofitable, and increase spend on those that are driving revenue. You can find step by step instructions on how to use the Dimensions tab, as well as key metrics to watch, in our E-Commerce Marketing Minutes video.
Another often underrated strategy is bidding by margin. This approach involves grouping your products into campaigns based on margin and assigning each campaign a ROAS target that aligns with margin and business goals. Because margins can vary greatly, a margin-based bidding strategy provides the retailer with scale, automation, and optimization.
Check out this blog post for more details on the specifics of margin-based bidding and how wehkamp, a Netherlands’ online retailer, found success following this approach for its Google Shopping campaigns.
4. Understanding the Purchase Consideration Process
It’s important for any retailer to understand the consumer’s purchase consideration process. Consumers embark on different purchase journeys for different products. It’s important to know how the path of those varied touchpoints affects your brand as someone moves towards becoming a customer or repeat customer.
Consider the differences when shopping for a living room suite versus accent pillows. You likely conduct more research when shopping for a living room suite and may visit the site multiple times before purchase. These steps indicate a higher level of purchase consideration.
The path is different, however, when shopping for something like accent pillows. The lower priced pillows often require less research and may even be an impulse buy. Less consideration from the shopper typically equals a shorter purchase cycle.
When you understand what those steps are for your product catalog, you are able to tailor your marketing efforts to help accelerate and ensure your customer’s path to purchase.
Use performance data to understand how and when customers are ready to purchase. Depending on your business, metrics that provide the best indicators will differ, but some data points you can begin to analyze are:
- Common search queries
- Purchase day and time
- Length of time between inquiry and purchase
- Total touchpoints along the purchase journey
- Household income, geographic region, and other demographic data
- Device-level data
This data is especially important for retailers with a lower average order value because they often encounter customers making an impulse purchase. This means you need to learn the most optimal time to appear in the auction because the purchase consideration timeline is so short.
Taking Home the Trophy
It’s important to tie new strategies for any channel back to your top goals. As a business with low average order values and high conversion rates, target Google Shopping strategies that will help improve efficiency and increase your AOV. Use this playbook as your cheat sheet of new strategies to put in place, then carefully watch the results to see what’s working.
As you test these new strategies, track results and evaluate if your tests are having an impact. If you see an increase in your average order value, look at the effective strategies with these questions in mind:
- Which strategy were you testing when you saw an increase?
- Can you expand on that strategy to improve your average order value even more?
Every retailer is different and it’s important to give each strategy some time to produce results to learn what works best for you. By using these data-driven plays to optimize your performance, you should see increased efficiency and higher average order values — all while keeping your conversion rates high.