Black Friday Promotions to Increase AOV
Black Friday Promotions to Increase AOV
Two words that bring excitement to any shopper’s mind in search of the unicorn of all deals. On the retailer side, Black Friday is a revenue jackpot if planned and executed with the shopper’s interest in mind, and a specific Black Friday marketing strategy.
One of the ways retailers build revenue is through increasing Average Order Value or AOV. The definition of AOV is: an e-commerce metric that tracks the average dollar amount spent whenever a customer places an order on a website or application. AOV is considered one of the most important metrics in the e-commerce industry. The formula for AOV is determined by revenue / number of orders.
Besides revenue building, why should AOV matter to you? AOV gives you insight into shopping patterns: how much to the dollar amount are they spending per trip? How often? What categories? Secondly, AOV gives you insight into crafting pricing and marketing strategies based on these patterns to again drive revenue. Thirdly, you’re building brand equity by knowing (and caring about) your customers, and marketing to them in meaningful ways to keep them in the buying cycle.
Here are a few retail promotion strategies to increase AOV, especially relevant to the holiday Black Friday shopping season:
1. Add-On Discounted Subscriptions
Consider how easy it is to market subscriptions at discounted rates once you see what categories your shoppers regularly shop in. Are they pet owners? Regular, weekly grocery shoppers? Might they be interested in a regularly scheduled beauty/health box? Coffee drinkers? Maybe your customer would be interested in gifting a subscription for the person who has everything on their list. While subscriptions are often associated most with Customer Lifetime Value (LTV), in this tactic they are used in a discounted function to boost AOV.
You take great care in collecting data and personalizing the offer to your shoppers. Upsells are seen as meeting a customer expectation, not pushy or crossing the line into overly personal territory. For example, if you’re a home goods store, consider personalized emails about new dining sets or home furnishing accessories that best complement a recent purchase. For home appliances, consider a cadence of personalized emails for a newer model or for an appliance not yet purchased.
Upsell items can be featured at checkout, but what really becomes meaningful to a customer are personalized add-ons. For bigger ticket items maybe a warranty/service package, or for clothing items perhaps it’s an accessory most purchased with the item that also happens to be a bestseller. A meaningful upsell for a tool set could be a tool box or pre-built garage setup for tool storage. Consider the power of FOMO (Fear of Missing Out) when it comes to holiday gifting; whether it’s the fear of missing the deal, or fear of missing the perfect gift.
FOMO is fast becoming a criteria for retailers to take note of and use to their advantage, especially around Black Friday shopping. Today’s shoppers increasingly refuse to miss a particularly deep deal, or a trending item they may not have discovered yet that becomes a must have.
3. Black Friday Gift Ideas/Guide
Customers want ideas! Sometimes the holiday gifting season can be stressful - what do you get for teachers, in-laws, or daycare providers? Putting together a guide of bestsellers or what’s new in a certain category can solve a gifting conundrum - and increase the cart size for a weary shopper who may want to get the shopping done in one fell swoop if the pricing is right.
4. Customer Loyalty Program Specific Offers
As we know it’s more expensive to land a new customer versus keeping an existing one, so why not capitalize on the strength of a lifetime customer to increase the cart? We’ll cover Free Shipping in the next point, but consider offering valued, high-spend customers a gift card or free gift when they hit a particular threshold. Consider how this action is a two-fold win; the AOV increases and retention increases by offering what a loyal customer sees as an exclusive deal.
5. Free Shipping or Free Shipping with Minimum Purchase
Offering free shipping or free shipping at a particular spend threshold has been known to increase AOV. Bear in mind the complexity of AOV when it comes to this tactic.
Let’s say your average order size is $50, but the mode (the most common dollar amount of orders) is $35. You may offer free shipping at $55-60 to increase the average spend, however you risk cart abandonment because that value is considered too high for a shopper. Consider a percentage increase from the most common dollar amount of orders (mode). Try setting the threshold at free shipping at $40 and over in merchandise for better results.
6. Live Chat
A live chat feature can mirror a personal shopper. If an item isn’t in stock, live chat helps the customer find alternate items, but when referencing AOV, a chat bot is a real-time conduit for upsell for the original item.
Holiday gift sets with a single price point increase AOV yet also solve customer demands of finding just the right items. Bundling can be used for just about any category: health and beauty, gaming, men’s health, teacher appreciation, food and wine, stocking stuffers, etc.
Additionally from this tactic, bundling can also be a way to launch new products and increase brand awareness.
8. Impulse Buys
Think of the checkout lanes in-store at the holidays: filled with stocking stuffers, small toys, stationery, wrapping paper, candy; any assortment of lower priced items that come in handy during the holidays for gifting. Why not recreate that same experience at site checkout with a last minute offering: Hey shopper, do you need a gift bag set? Tape? Did you forget gift tags? Gift cards? A gift item warranty? Even if you raise the AOV by $2, you’re still moving the needle.
At such a profitable time of year, you’ll want to take advantage of all the tools available for connecting with shoppers and turning that connection into conversion. For more ideas this holiday season, read our Black Friday Checklist: How to Prep your eCommerce Store.