As we have seen, sales can be a useful tool during the slower seasons. But at what cost? Yes, you may be bringing extra traffic to your store and getting rid of excess stock but there is no ignoring the fact that discounts for the buyer means less profit for you. With many merchants feeling the pinch of lower margins during this period, it is important to balance this- specifically, by increasing average order value.
Shoppers may know what they have in mind but that doesn’t mean that you shouldn’t always be suggesting other relevant pieces from your store. Recommendations tailored to an individual’s likes and dislikes (as documented by their behavior on your site) are going to be more appealing - in fact, 54% of retailers that use automated product recommendations increased their average order value year on year.
But a spray and pray approach is only going to take you so far, if you are looking to achieve a certain objective, such as increase average order value, then your approach should be strategic. For this metric consider the following...
Boomerang use 1:1 product recommendations on their homepage in the form of a “recommended for you” section, as well as curating best selling items in the “most popular lists”.
- UPSELL - Upselling involves persuading a shopper to spend a little more than they had planned, and, according to Econsultancy, can drive over 4% of revenue. To do it, keep in mind what they were originally wanting to buy while suggesting items that give you more of a financial return - items from the same category that are either more expensive or have a higher profit margin. So, for example, if a person is looking at computer in your mid-range, suggest that they buy the same model but with higher specs, costing a little bit more.
Top Office successfully uses a “Similiar Products” recommendation section to show more expensive alternative items.
- CROSS-SELL - Cross-selling boosts the average order value of a customer by recommending complementary products to those a shopper is already considering purchasing. It drives less revenue than upsell at 0.2%, but when automated it is such a simple thing to do that it would be silly not to. Generally the suggestions will be smaller ticket items as people are more likely to make impromptu purchases if the cost is negligible compared to what they were already buying (think about how often you pick up a pack of gum or a chocolate bar at the checkout of the supermarket). For these reasons, accessories are a very popular choice - if someone is buying electrical goods, suggest batteries, if they are buying a shirt, recommend cufflinks or a tie.
- BROWSING HISTORY - Browsing history recommendations remind customers what they have engaged with but not put in their cart. By adding this functionality to your site you make it more difficult for customers to forget or leave behind items that they were insterested in. This naturally increases their chances of spending more (as well as improving their user experience).
54% of retailers that use automated product recommendations increased their average order value year on year.
Eton successfully use the cross-selling technique by offering ties to accompany the shirt being viewed.
Consider where you place these recommendations on your site- a product page is the obvious choice but so too is the cart page very effective. Keep in mind that you do not want to disrupt the journey to checkout or have them leave the cart page however, so make it as easy as possible to add the extra items to their order on the same page. One way in which to do this is to have an “add to cart” button attached to the product recommendation, this will put the item into the cart without taking them through to the product page.
And while we’re at it, don’t just think where these recommendations are but experiment with innovative ways to present them- for example, when a person adds an item to their basket why not use a pop-up to suggest further products?
Oka use pop-up technology to recommend items relevant to the piece which has been added to the cart.
When recommending products on your website consider filtering them so that those which will earn you the most money are pushed to the forefront. This can be done in the previously covered up-selling, cross-selling, as well as browsing history related recommendations and ‘Best Seller’ lists.
Alternatively filter recommendations, particularly on the cart page, to show smaller-ticket items that are more likely to be purchased by impulse.
We have already mentioned bundling as a method of getting rid of excess stock but it is also an effective technique for increasing average order value. People are more like to buy and spend more if they will get a discount for doing so. Nintendo is an example of a company that has used this to great effect - when offering a bundle option of console and game, they’ve had 100,000 more hardware sales, and a million more video games sold.
People are more like to buy and spend more if they will get a discount for doing so.
Offer rewards for orders that reach a minimum value - this could be a discount, a small gift or free shipping: 83% of consumers say free shipping is the number one thing that would get them to shop online more. If you are using recommendations this a good place for them - show not only how much there is left to spend before they reach the threshold but also the pieces that would get them there. And if you have excess stock then consider killing two birds with one stone by using those pieces as the free gift.
Junique use space on the cart page to suggest items that will help a customer’s eligibility for free shipping, therefore encouraging them to spend a little bit more.
83% of consumers say free shipping is the number one thing that would get them to shop online more.
For more tips to help you prepare for Q1 come back next week when I will be giving tips on how to increase conversion by creating a sense of urgency in your store (or in case you missed it, check out my last piece which looked at tactics for excess stock)!
Alternatively, you can download our handy Q1 checklist for all the tips in one go...