3 minute read
Three ways for wineries to increase average order value
By Brandon Harvie
We know growing your direct-to-consumer sales is essential. You may be working to increase the number of sales; however, it would help if you also focused on increasing your average order value. In this article, we share some simple ways for your winery to increase average order value. WineDirect’s industry-leading features allow you to optimize your winery for DTC sales and grow your average order value with ease.
WHAT IS AVERAGE ORDER VALUE (AOV)?
AOV is a key metric that all wineries should consider using. It measures the average dollar amount for every order placed with your winery within a specific period. HOW TO CALCULATE AVERAGE ORDER VALUE To calculate AOV, simply take total revenue and divide it by the total number of orders. Make sure both are over the same period, such as one month or one year.
For example, let’s say your January online DTC sales were $20,000 and you had a total of 250 orders. $20,000 divided by 250 = $80, so January’s monthly AOV was $80. You now know that orders made through your website were $80 each for January on average.
WHY IS AVERAGE ORDER VALUE IMPORTANT? AOV is often overlooked, but it is a fundamental metric for ecommerce success and something you as a winery should pay close attention to. It provides a window into
your customer’s purchasing behavior, and you can use this data to improve the effectiveness of your marketing efforts and pricing strategy.
WAYS TO INCREASE AVERAGE ORDER VALUE
PROVIDE PRODUCT BUNDLES An excellent way to encourage customers to purchase more items is to create product bundles, which is when you group multiple products into one product. Grouping products that go well together or commonly sell together as bundles will encourage customers that were only looking to purchase one bottle, to purchase the complete set, increasing your average order value. Another way to increase average order value is to use carrots, which is a tool that allows you to create messaging to entice customers to purchase more.
START A LOYALTY PROGRAM Loyalty programs are a powerful way to build up your brand and help forge relationships with your customers, leading to increasing customer lifetime value. A study by Smile.io found that loyalty programs increase average order value by nearly 14 per cent. Customers appreciate a personalized experience where they can earn rewards such as points, freebies, and more. You can build that group of highly engaged customers who love your brand and continue to come back.
OPTIMIZE SHIPPING STRATEGIES Shipping cost is one of the top reasons that lead to shopping cart abandonment and offering discounted or flat rate shipping can incentivize customers to continue shopping and reach that threshold. For example, you could offer flat $5 shipping for all orders of at least six bottles. Offering free/discounted shipping at a certain point is a fantastic way to get customers to increase their average order value. It is crucial to show this threshold throughout your website so customers can shop with it in mind. We recommend using carrots throughout your modal cart to entice customers to achieve the minimum spend to quality for a shipping discount.
As you can see, there are numerous ways in which wineries can test and increase their average order value. We recommend trying one method at a time to find out what works best for your winery - and then sticking to it for some time.
Learn more about product bundles, loyalty points, shipping strategies, and more at the WineDirect Academy or by visiting winedirect.com. o
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