This blog is the second entry in a series on product recommendations best practices. Catch up on the other instalments here:
- Part one: Building a 360 degree strategy
- Part three: Driving more conversions
- Part four: Tips and tricks
Ecommerce personalization is what we like to call the ultimate win/win. For shoppers, personalization means a shorter time to value - the easier it is for a customer to find what they're looking for, the happier they'll be. For ecommerce retailers, happier customers means more sales.
We're not just talking about more conversions either. Personalization, when executed effectively, has a real impact on cart values, driving higher average order value (AOV) for brands. Take these stats for example:
- 98% of retailers with personalization see an increase of AOV and 97% see an increase in revenue per user
- 3 in 5 retailers are seeing an AOV jump by 10% or more post-personalization
- 9 out of 10 marketers report returns of at least $1-2 for every dollar spent on personalization, with 43% receiving at least $6 in return per dollar spent
- Brands who adopt advanced personalization techniques realize 17% more revenue
If you want to learn more about the real ways personalization and AOV go hand-in-hand, check out our in-depth stats roundup here.
Ready to start boosting basket sizes? Keep reading to learn some essential product recommendation strategies that will drive higher average order values for your business.
Cross-sells to boost average order value
One of the primary strategies that will drive higher order values for your business involves cross-selling. First, a quick overview of the difference between cross-sells and upsells (which we'll get to later in this post). A cross-sell involves selling an item that goes with the item a customer is interested in purchasing. For example, a waiter might cross-sell a glass of wine with a pasta dish a patron has ordered.
An upsell, in contrast, involves getting a customer to spend more on something they're interested in purchasing. For example, a waiter might offer to add on chicken or shrimp to a pasta dish for an additional charge.
But back to cross-sells. The most important consideration is that cross-sells are most effective when selling a product that complements what a shopper is interested in. Hence, personalization is key. To use a really basic example: Cross-selling a phone case that doesn't match the exact phone a customer is looking at isn't going to get you anywhere. A well-merchandized site would not only offer the right phone case, but might show phone cases that align with the inferred behavior of a customer (e.g. promoting a glittery case to someone that shows interest in a pink phone).
Let's dive into a few tactics to drive more money from cross-sells on your site.
Cross-sell matching sets by variant
Many brands offer items that belong to a matching set. To name just a few examples:
- Art prints
- Winter accessories
The simple truth is you can't bank on a customer making the effort to find the matching pieces in a collection. Highlighting items that are available in the same variant is a surefire way to take what might have been a single-item purchase and grow it into a multi-item transaction.
To really step this strategy up, consider having your product recommendations change in real-time based on what swatch a customer is viewing. Want to see this tactic in action? Watch our short video below.
Use bundles to sell matching items
Bundles are a popular strategy for boosting average order value for a reason. Instead of leaving a shopper to guess what products they should buy to round out their purchase, you're presenting them with a clear assortment they can easily add to cart. Bundles can also be an effective way to clear out overstock or promote high-margin items.
A couple of tips and tricks when it comes to bundles:
- Let customers choose any variants required (e.g. size, color, etc.) from the bundle itself as opposed to navigating to a new product detail page (PDP).
- Allow customers to select whether they want to add every product in the bundle to the cart, or just some items.
- Consider having fallback items appear if a bundle product goes out of stock. Or use evergreen products that you always have in stock to round out bundles.
There are a few ways to think of setting up bundles. One of the most popular strategies for fashion brands is to 'Complete the Look'. This involves taking the main lifestyle image on a product page and curating which items go with it - a process that can be done manually or through AI.
Another bundle approach is to cross-sell matching accessories for an item, like a teapot and tea bags for looseleaf tea, or a lens and tripod for a camera. Check out a real-life example of bundles in action with this short video.
In-cart and checkout cross-sells
It is possible for a customer to overlook the work put in to personalize a product detail page. Smart ecommerce marketers know that it's just as important to offer cross-sells in other locations, including the cart and checkout.
If you have an AJAX slideout cart, cross-selling can be extra effective as a customer has to physically interact with the cart in most cases, putting your cross-sell offer right in front of them.
Even if a customer skips a cart offer, brands using ecommerce platforms like Shopify Plus and BigCommerce can place offers at checkout for one last way to drive up order sizes.
A few ideas for your in-cart and checkout cross-sells:
- Present recommendations in a carousel layout to offer multiple cross-sells
- Use the item(s) a customer has in their cart to automatically generate relevant AI-based recommendations
- Consider promoting a special offer, like a value set, or other discount to drive conversions
- Mention how popular the cross-sell item is, particularly if it's a smaller add-on accessory (e.g. shoe protectant spray) or if it's a bestseller
Check out how an in-cart cross-sell can work by watching our short video.
Promote free shipping thresholds
One final cross-sell strategy that works really well is promoting your free shipping threshold (e.g. 'Free shipping when you spend $50 or more!') Many brands will highlight their free shipping threshold in the cart with a progress bar that indicates how much more you have to spend to save on shipping costs. But truly savvy brands will offer up cross-sell products at the same time that will help get shoppers across that free shipping line.
In a way, this strategy is an extension of cross-selling in the cart, but a key difference is optimizing your cross-sells to relate to the shipping threshold. For example, if a customer is just $10 away from hitting free shipping from a beauty brand, cross-selling an $80 palette is likely to make your cross-sell feel like a cash grab. But cross-selling lower-cost add-ons like a lip gloss, makeup brush, or cleanser will make 'Add to Cart' feel like a no-brainer, giving the customer the free shipping they want while making your shipping promotion pay off. Try calculating the item's value and shipping threshold gap in combination to pull up more appropriate items for every customer.
Upsells to boost average order value
The other major way to grow average order value through personalization comes from upsells. Recognize there are many different forms an upsell can take. The main difference though, is instead of encouraging a customer to buy more items, you're asking them to spend more on a single item. Using our restaurant example above, you can't just place an order for 'add on shrimp' without ordering the pasta dish first.
If you're ever wondering whether you're running an upsell or cross-sell, just ask yourself whether a customer could purchase the item you're promoting without the other thing they first showed interest in.
Here's a few examples of common upsells:
- Buying a premium version of a product (e.g. a newer model, better quality, more features, etc. - Think of a car manufacturer having multiple vehicle classes)
- Buying a larger volume of a product (e.g. a 'value size' where cost per use or serving is lower)
- Adding on customizations (e.g. sewing on a monogram, or a premium fabric choice for a sofa)
- Adding on services (e.g. an extended warranty)
- Adding on accessories that typically aren't sold separately (e.g. adding on collar stays for a dress shirt)
In all of these basic upsell scenarios, a shopper could still be checking out with a single item. But ideally, they're checking out with a single item that has additional costs associated with it to boost average order values.
Let's take a closer look at a few unique upsell applications.
Upsell a subscription
Subscriptions have taken off like a rocket over the last few years, because they make good business sense. Recurring revenue provides a solid financial foundation for any business, helping stores earn money on autopilot while customers receive the products they want on autopilot.
Instead of selling more products (cross-sells) or a more premium / bigger volume product (upsells), another type of upsell is to generate more frequent purchases of a single product, in the form of a subscription.
The trick to upselling subscriptions is to promote the additional value a customer will receive by subscribing. For example, you might highlight how subscribing unlocks some of the following benefits:
- Free shipping on all subscription orders
- Ability to add on ancillary products before subscriptions go out with no additional shipping
- Term savings (e.g. get a 12-month supply for the price of 10 months)
- Free gift for subscribers
- Bonus loyalty program points
- Free samples in subscription orders
- Special perks and promotions for subscribers (e.g. early sale access, special promo codes, birthday gift promotions, etc.)
Try promoting your subscription on the product page, in pop-ups, and in the cart to give shoppers multiple chances to sign on for the long term.
Another way to boost average order value through upsells involves adding on services. Again, these services are not something someone could buy without purchasing whatever item they're interested in from your brand, but they are things you can sell as separate 'add-ons'.
There are a wide range of services you could offer, but some common ones include:
- Extended warranty and protection plans
- White glove delivery
- Setup or installation
- Enhanced customer support
The best upsells are ones where the customer feels like they're getting more out of their purchase and not being simply being made to spend more. Upsells like these should be positioned as conveniences, not cash grabs, to make customers feels confident in their purchases and enjoy long-term satisfaction.
Learn more about upselling and cross-selling
There are a lot of other ways personalized upsells and cross-sells can help boost your average order value. So much so, we've actually written an entire ebook about it. Download a copy of the Ultimate Playbook for Upsells and Cross-Sells to Boost AOV here.
LimeSpot can help power your upsells and cross-sells with minimal effort. Get started in minutes with a free trial today.