To keep in lockstep with customer expectations, your business built a digital channel that provides a virtual “endless” aisle of items, online tools for easy ordering and transacting, and the convenience of shopping anywhere, anytime, on any device. So, how do these customer benefits translate into results for your organization? There’s only one way to find out, and that’s through website analytics.
A well-built digital branch can boost site traffic and conversions and increase your chances of repeat customers – all important factors in driving your online revenue. Tools like Google Analytics measure and monitor these and other web metrics to determine just how well your site is performing and identify where you can make improvements to positively impact revenue. We teamed up with analytics expert Chris Jones to outline the extensive features of Google’s free tool in our white paper, Google Analytics for Wholesale Distributors: from the multi-faceted dimensions it captures and measures, to the detailed reports it generates to present insights. Our guide provides distributors with viable ways to strengthen their digital footprint using data-driven strategies, including this site optimization equation to calculate online revenue:
Sessions x Conversion Rate x AOV = Revenue
Three simple variables – sessions, conversion rate, and average order value (AOV) – determine the amount of revenue a digital branch produces. More importantly, even the smallest increase in any one of these metrics will grow online revenue. In previous blog posts, we broke down the first two variables, number of sessions and conversion rate. In this final piece in our series, we are going to show you how to calculate AOV and offer five tactics you can employ to improve this metric.
The ABCs of AOV
As the name implies, average order value is the average dollar amount your customers spend per order. While the focus of this blog is AOV for online orders, it is beneficial to calculate AOV for offline or traditional orders as well; this will give you two AOV metrics to track and compare to determine which channel drives buyers to spend more money.
To get a good gauge of the average amount spent per order on your eCommerce site, divide your total online revenue for a given month by the total number of online orders (purchases) made that same month. Calculate your AOV on a monthly basis to track its progression, as shown in the example below:
Low or decreasing AOV numbers could indicate a subpar online user experience where the product search functionality is limited, transacting is difficult, or pricing and availability is not up to date. In contrast, an AOV that increases over time suggests a superior digital channel that gives customers the products, convenience, and confidence to place large orders online.
Now that you know how to calculate AOV for your digital branch, it is time to learn the digital strategies you can use to stimulate more online buying.
Five effective ways to grow AOV
Fortunately for distributors, there are a number of strategies to help drive AOV for their online channel. Employing tactics such as product suggestions, incentives, and bulk discounts benefit an organization’s bottom line and profit the customer as well, and happy customers become loyal customers. Consider adding these features into your online offering and watch your AOV grow:
- Take advantage of up-sell and cross-sell opportunities
Connect the dots for buyers by displaying alternate (up-sell) or complementary (cross-sell) items related to their product searches. This product association strategy not only simplifies the customer’s shopping experience, it also reminds them of additional products they may need and exposes them to product options they may not have considered. There’s a reason businesses integrate up-selling and cross-selling strategies into their digital branch: they work.
A buyer searching for a towel dispenser is shown related towel rolls for use with the product - Display purchases made by buyers who bought a similar product
People like to have options, which is exactly what showing comparable products others bought does for buyers. These items are typically best sellers for a given category, and usually have higher customer reviews, which is another feature people like. By having the “Customers also bought” products displayed conveniently on the product detail page, buyers have the option to click and learn more about similar products that have the same function but come in a different size, style, or material.
Products customers also bought are typically best-selling items from related categories - Run promotions that offer more bang for their buck
Buyers love getting extra perks, so try incentivizing them with promotional offers and special deals. People are more inclined to make a purchase if there is a reward or bonus attached to their buy. Find out what interests your customers and then get creative with your promotional offers. Hirsch Pipe & Supply provides buyer incentives on a regular basis – from sporting event and concert tickets to exotic trips. In addition, they build promotions around holidays and even feature a Friday Manager’s Specials page of products to attract more site traffic.
A page dedicated to specials and promotions helps drive traffic and additional sales - Advertise clearance items
Looking to clear old stock or discontinued products out of your warehouse? Create a Clearance page on your eCommerce site that draws them to the deals. Advertise your clearance items with a banner ad on your home page and a link to view the products. Since your customers are already on your site shopping for products, why not point them to additional sale items they can also throw in their shopping cart?
Display clearance items as a top product category to draw attention - Provide incentives with bulk and bundled purchases
Perhaps one of the easiest ways to fill a buyer’s shopping cart is by enticing them with discounted pricing, bundled product pricing, and free shipping with their larger purchase. A robust eCommerce platform allows you to predetermine volume discounts for your different customers which automatically display for them online. In addition, you can set automated messages to display on their shopping cart page that remind them of how much more they need to spend to receive free shipping. These “instant” price markdowns and message prompts eliminate the need for customers to contact a sales rep to negotiate better pricing and give them more reasons to buy from you again.
Hill & Markes advertises product bundle savings on their social media platforms and includes a convenient link to the bundle program website page for easy ordering
A powerful and flexible eCommerce site plays a significant role in the success of AOV marketing strategies like the ones highlighted above. Unilog’s all-in-one eCommerce platform has these capabilities, and much more, to provide B2B buyers with a superior shopping experience that stimulates more online traffic and conversions. And, unlike other digital technology providers, Unilog also provides product enrichment services that enhance your product catalog with detailed product information that builds SEO to attract buyers and helps them make purchasing decisions.
When Hirsch Pipe & Supply upgraded their digital commerce platform to Unilog’s solution, they saw a jump in nearly all their website metrics. Not only did their overall traffic volume and total revenue increase, their AOV went through the roof. Colin Harbut, Digital Marketing Manager at Hirsch, attributes their more than 100% increase in AOV to their upgraded Unilog platform and newly enriched product content. “We’re seeing more line items on online orders across all our categories than ever before. This tells me our customers are having no trouble finding what they’re looking for on our site,” adds Harbut.
Hirsch’s results are not an anomaly. Of the Unilog customers who have shared their web analytics with us, many report their online AOV is anywhere from 45% to 90% higher than their offline orders, and it continues to grow due to the features and efficiencies the platform offers. Also, customers who allow anonymous shopping have reported increased margins in the range of 60% to 70% for spot buys.
Unilog’s eCommerce solution gives B2B buyers a superior online shopping experience with advanced features such as intelligent site search capabilities, customer-specific pricing and product availability, as well as easy checkout that allows for multiple purchasing roles, different payment methods, and more. For wholesale distributors, our platform drives efficiency and profitability with its leading edge tools and capabilities, including a built-in PIM to easily manage all your product information in one central location and tight integrations with applications and ERP systems to ensure data is synced across your business enterprise. Built and housed in the cloud, the Unilog platform promises reliable, fast performance and the scalability to grow with your business.
If you want to funnel more higher-value orders through your digital branch, contact us today. We’ll help you quickly transform your digital branch into a top-performing sales channel for your business.