In the wild west of ecommerce, understanding user behavior across different devices and order value segments is critical for optimizing conversions. By understanding different ecommerce business models, such as dropshipping and direct-to-consumer strategies, businesses can better analyze metrics like “Add to Cart” rates, “Checkout” rates, and “Order” rates across Average Order Value (AOV) segments to identify key areas for growth and optimization.
In this article, we take a deep dive into Shopify conversion data segmented by AOV and device type to help businesses make data-driven decisions that can drive growth.
The Importance of Average Order Value
What is Average Order Value (AOV)?
Average Order Value (AOV) is a crucial metric for any ecommerce business, as it measures the average amount spent by customers in a single transaction. Understanding AOV helps businesses gauge their revenue and profitability, providing insights into customer behavior and purchasing patterns.
To calculate AOV, divide the total revenue by the number of orders. For instance, if your ecommerce store generates $10,000 from 100 orders, your AOV would be $100. A higher AOV indicates that customers are either buying more items or opting for higher-priced products, which can significantly boost your revenue.
Several factors can influence AOV, including product pricing, promotional strategies, and customer loyalty programs. By analyzing these elements, businesses can identify opportunities to increase AOV, thereby enhancing their overall profitability.
Average Order Value’s Effect on Your Ecommerce Business
The Average Order Value (AOV) is a vital metric for any online store, as it directly influences the lifetime value of your customers. But not all AOV segments behave the same. While you’d think a higher AOV on an ecommerce site would mean more total online sales, the reality is more complicated.
Here’s a look directly from StubGroup data at how users in different AOV ranges interact with a Shopify store, and what it means for your business.
| AOV Range | % Added to Cart | % Added to Cart – Desktop | % Added to Cart – Mobile | % Added to Cart to Reached Checkout | % Reached Checkout – Desktop | % Reached Checkout – Mobile | % Add to Cart to Order | % Order Rate – Desktop | % Order Rate – Mobile | % Placed Order | % Placed Order – Desktop | % Placed Order – Mobile |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| High AOV (over $500) | 1.86% | 1.79% | 54.99% | 54.99 | 60.92% | 51.52% | 30.23% | 31.79% | 28.10% | 0.33% | 0.37% | 0.30% |
| Mid AOV ($100-$200) | 3.36% | 3.19% | 75.36% | 75.36% | 79.89% | 73.91% | 35.27 | 39.43% | 42.75% | 1.53% | 2.11% | 1.37% |
| Low AOV (under $100) | 5.64% | 5.44% | 76.98% | 76.98% | 77.53% | 77.94% | 40.50% | 39.98% | 42.75% | 2.32% | 2.66% | 2.25% |
Stubgroup’s Insights:
Low AOV Segments: For small businesses selling online lower-cost items, the numbers are encouraging. The Low AOV segment sees a much higher Add to Cart percentage (5.45%) compared to higher-priced items. This suggests that users are more willing to experiment with lower-value purchases, perhaps due to the lower perceived risk.
But the big challenge here is turning these cart additions into actual purchases, as the final conversion rates (Order %) remain modest. To close the deal, businesses might consider offering incentives like free shipping or limited-time discounts to push users through to the final sale.
Mid AOV Segments: The Mid AOV range presents an interesting opportunity for growth. With a strong 75% of carts reaching the checkout page, customers are clearly showing interest and intent to purchase. This segment could benefit from efforts to increase trust, such as showcasing customer reviews or offering easy return policies.
These strategies could push more people to complete their orders, raising the overall order rate and driving more revenue.
High AOV Segments: High AOV items naturally face a greater challenge in conversions, and the data reflects this. With only 1.86% of sessions leading to an Add to Cart event, it’s clear that customers are more hesitant when faced with a higher price tag. This is where personalized marketing, such as email follow-ups or abandoned cart reminders, could prove highly effective.
Additionally, providing detailed product descriptions, high-quality images, and customer testimonials could reduce hesitation and encourage more people to take the plunge on big-ticket items.
Mobile vs Desktop Comparison
With the rapid rise of mobile commerce, understanding how users conduct online transactions across different devices is critical. For ecommerce businesses where budgets may limit the ability to offer highly customized experiences for both desktop and mobile, it’s important to recognize how each platform is performing.
The table below shows the average performance metrics for both mobile and desktop users across all AOV segments.
| Metric | Desktop | Mobile |
|---|---|---|
| Percent Added to Cart | 3.84% | 3.51% |
| Percent Reached Checkout | 72.78% | 67.69% |
| Order to Add to Cart Rate | 37.07% | 34.44% |
| Order Rate | 1.71% | 1.31% |
Stubgroup’s Insights:
Add to Cart Behavior: Desktop users are slightly more likely to add items to their cart (3.84%) compared to mobile users (3.51%). This difference might not seem large, but for small businesses, every percentage point counts. A possible reason for the desktop advantage could be that the larger screen size allows users to browse and evaluate products more easily.
To close the gap, consider optimizing mobile product pages to load faster, display product images clearly, and reduce the number of steps required to add an item to the cart.
Checkout and Order Rates: Desktop users also show higher conversion rates when it comes to completing the checkout process (72.78% vs. 67.69%). This could be due to the convenience and perceived security of making purchases on a larger device.
However, mobile is still an important platform, especially considering the growing trend of “mobile-first” shoppers. Businesses should focus on streamlining their mobile checkout process by offering guest checkouts, mobile payment options like Apple Pay, and ensuring that the website is fully responsive and user-friendly.
Impact of Device on Orders: While the gap between mobile and desktop orders exists, it’s narrowing. As mobile technology improves, businesses should expect this trend to continue. For small businesses, this means investing in a mobile-friendly experience is no longer optional—it’s a necessity.
Why These Insights Matter for Your Ecommerce Businesses
For small and medium-sized ecommerce businesses, every customer interaction and sale can significantly impact overall revenue. So understanding how different AOV segments and device types perform allows you to prioritize resources and strategies where they’ll have the most impact.
- Lower AOV Customers: You may want to offer more frequent promotions, since customers are more likely to add low-value items to their cart. These customers might also respond well to upselling or cross-selling strategies that increase their order value.
- Higher AOV Customers: This segment requires more nurturing. Personalization is key—customers spending large amounts need to feel confident in their purchase. Consider adding features like live chat or a FAQ section to address concerns about expensive purchases.
- Mobile Optimization: As mobile commerce continues to grow, making your mobile experience seamless could help you win customers over competitors who haven’t made that investment yet. A smooth, user-friendly mobile checkout process can make the difference between an abandoned cart and a completed purchase.
By diving into the details of your data and applying these insights, you can make the most of your limited marketing dollars, improve conversion rates, and, ultimately, grow your bottom line.
Factors Affecting Average Order Value
Product Pricing Strategies
Effective product pricing strategies are key to increasing AOV. Here are some tactics that ecommerce businesses can employ:
- Bundling: Offer multiple products together at a discounted price. This encourages customers to buy more items, thereby increasing the total order value.
- Upselling: Suggest higher-priced products or upgrades to customers. For example, if a customer is looking at a basic model, recommend a premium version with additional features.
- Cross-selling: Promote complementary products that enhance the main purchase. If a customer buys a camera, suggest accessories like lenses or tripods.
- Price Anchoring: Display high-priced items alongside lower-priced ones to make the latter appear more affordable. This can nudge customers towards making a purchase.
- Discounts: Offer discounts on bulk purchases or through loyalty programs. This not only increases AOV but also encourages repeat business.
By leveraging data analytics, businesses can gain insights into customer behavior and purchasing patterns. This information can be used to fine-tune pricing strategies, ensuring they are aligned with customer preferences and market trends. Ultimately, optimizing product pricing can lead to higher AOV and greater revenue for your ecommerce store.
Tips for Utilizing this Data For Your Ecommerce Business
1. Tailor Your Marketing to Your AOV Segment
Low AOV (under $100): Customers in this segment are more likely to add items to their cart but less likely to complete purchases. For businesses selling online, tailoring marketing strategies to different AOV segments can be crucial. To push them through the funnel:
- Offer limited-time discounts: This creates urgency and can convince users to finalize purchases.
- Incentivize with free shipping or perks for small orders: Small incentives can reduce hesitation.
- Use retargeting ads: If customers abandon carts, remind them of the items they left behind with retargeting ads and potentially offer a discount or free shipping.
Mid AOV ($100–$500): This segment has strong buyer intent, with many users reaching the checkout stage. To convert them more effectively:
- Showcase product reviews and social proof: Customers in this range are likely comparing options. Display customer reviews and ratings prominently to build trust.
- Offer installment payment options: Services like Afterpay or Klarna allow customers to pay in installments, making higher-priced items more accessible.
- Highlight return policies: Mid-range buyers need assurance that they can return items easily if they change their minds.
High AOV (over $500): Customers in this segment tend to be more cautious, but they also represent the highest revenue potential. To reduce friction:
- Provide detailed product descriptions and high-quality images: Ensure that every aspect of the product is clear, from materials to dimensions.
- Utilize personalized marketing: Send follow-up emails for abandoned carts, offering additional product information or assistance.
- Consider offering live chat or phone support: Higher-priced items often raise more questions. Having real-time support can reduce hesitation.
2. Optimize Mobile Online Shopping Experience
Simplify the Mobile Checkout Process: On an ecommerce website, simplifying the mobile checkout process can significantly increase conversions. Mobile users show lower checkout rates, so reducing the number of steps can help increase conversions. Ensure:
- A one-click checkout option or mobile payment methods like Apple Pay or Google Pay.
- Guest checkout for users who don’t want to create an account.
- Autofill features for faster data entry.
Speed Up Mobile Site Load Times: Slow load times are a common reason users abandon mobile purchases. Test your site’s speed and optimize images, scripts, and other elements to ensure fast loading on all devices.
Improve Mobile Navigation: Ensure that product pages are easy to browse on smaller screens, with clear calls to action, easy-to-read text, and large buttons for adding items to the cart.
3. Leverage Desktop Strengths
Optimize for Desktop Users: While mobile is growing, desktop still converts better. Optimizing for business to business transactions can leverage desktop strengths. For these users:
- Create a comprehensive browsing experience: Use larger images, detailed descriptions, and compare options so that users can evaluate products fully.
- Utilize pop-up offers on exit intent: If a desktop user tries to leave the site, offer them a discount or free shipping to encourage them to complete the purchase.
- Show complementary products: Upsell related products with recommendations based on the customer’s cart or browsing history.
4. Retarget Abandoned Carts
Across all AOV segments and devices, many users add items to their cart but do not complete the checkout process. Implement automated abandoned cart emails or SMS reminders to re-engage customers and provide incentives like discounts or free shipping to entice them back to complete their purchase.
5. Use Analytics to Track Customer Behavior and Adjust Strategies
Regularly review your analytics, particularly in terms of how each AOV segment and device is performing. For example, monitor your mobile vs. desktop conversion rates and track the impact of any mobile optimization efforts.
Track the effectiveness of discounts or promotions by segment to ensure you’re not offering unnecessary incentives, especially for Mid and High AOV segments.
6. Invest in Trust Signals
Customers in all segments need to trust your store. Strengthen trust by displaying:
- Third-party certifications (e.g., secure checkout badges).
- Customer reviews and testimonials: Social proof is highly effective, especially in convincing hesitant buyers.
- Clear return and shipping policies: Make sure users know they can easily return items if needed.
7. Personalize the Experience
Use dynamic content: Show personalized product recommendations based on past purchases or browsing history to increase engagement and conversions.
Email Marketing: Segment your email lists by AOV categories and tailor messages accordingly. For example, send personalized promotions for higher-priced items to High AOV shoppers and highlight deals on lower-priced items for Low AOV buyers.
8. Test Payment Flexibility
Offering multiple payment methods can help convert more shoppers, particularly in the High AOV segment. Consider implementing:
- Buy Now, Pay Later (BNPL) options like Klarna, Afterpay, or PayPal Credit.
- Multiple credit card options to cater to different customer preferences.
9. Improve Retention with Loyalty Programs
Encourage repeat business by creating a loyalty or rewards program, especially targeted at Low and Mid AOV segments, where customers are more likely to make frequent, smaller purchases. This can increase lifetime value (LTV) and promote brand loyalty.
10. Test and Refine
Constantly run A/B tests to see what works best for your audience. Whether it’s testing different call-to-action buttons on mobile or experimenting with various discount offers for different AOV segments, testing is key to optimizing conversions.
By taking data driven action you can increase conversions, drive more revenue and deliver a seamless shopping experience that keeps customers coming back.
Need help implementing these strategies or need support with your ecommerce performance? StubGroup can assist. Our team specializes in bespoke marketing solutions to help you grow your business.
Get in touch with us today to find out how we can help you turn insights into action and boost your sales.