Online grocery stores have the highest average order value among other eCommerce stores. And it's not surprising. Getting lots of tasty food to your doorstep sounds appealing! Whether you sell general groceries, candies, or your own branded foods, you have one thought in mind - how to sell MORE! You need to keep three metrics in mind to ensure the profitability of your online food business:
- Conversion rate,
- Returning customer rate,
- Average order value.
Today we will talk about AOV (average order value). AOV is a metric you should invest in when running an online grocery store. There is a real opportunity here. There are some obvious benefits of increasing AOV:
- You make more money,
- You lower your customer acquisition costs,
- You increase your ROAS.
What is a good AOV for an online grocery store?
According to Statista site, the average order value for online grocery in the second quarter of 2021 hit a record high of $184.44 compared to $134.84 in 2020. So this is something you should aim for with your site.
How to increase the average order value of an online grocery store?
1. Tiered discount deals.
For example, buy two chocolates for $4 or three chocolates for $5. Online shoppers love tiered discounts because they feel like they are getting a good deal! Tiered discount works well with drinks, sweets, snacks, canned food, and any packaged food/drinks with long shelf life.
Bundling packaged products together that complement each other can significantly increase your AOV. The most common bundles are drinks and snacks, coffee and chocolate, or veggies bundles to make a soup!
Every online grocery store must have a cross-sell feature to increase average order value. For example, if someone is browsing peanut butter, show them bread; pizza will go well with fizzy drinks, and avocado goes with shallots. Many eCommerce systems, including Shopify, have AI-powered tools to automate the cross-selling process. Throw a 10% discount into the mix and see your AOV increasing.
4. Shop by recipe.
Imagine reading the recipe and ordering all necessary products with just one click. Wouldn't it be fantastic? Millennials and Gen Z don't want to waste their time browsing ingredients and calculating proportions. By offering them an easy way to shop the ingredients per recipe or even a weekly meal plan, you can increase your AOV and make your customers very happy!
5. Free shipping threshold.
Simply set up a minimum amount your customers have to spend to get free shipping, and you will see your AOV growing instantly!
6. Free surprise gift with orders over $XXX.
Who doesn't like gifts? People love gifts, especially surprise gifts. By offering a surprise gift with every order above $XXX, you can increase AOV and make your customers excited about the order. Such experience will help them establish an emotional connection with your online grocery store.
7. Limited-time deals.
Have you ever experienced FOMO (fear of missing out)? If yes, then you know how it feels! Offer limited-time deals (discounts) or limited-addition products that people can only purchase within a specific period until supplies last! It will not only increase your average order value but conversion rate as well.
8. Loyalty program.
Online stores use Loyalty programs to increase a returning customer rate. On top of that, it can be a really powerful tool to increase AOV for online grocery stores as they encourage customers to spend more to get more points and unlock special deals. If you are on Shopify, you will simply need to plug in one of the Shopify loyalty programs apps.
If you really want to take your online grocery store to the next level and increase average order value, conversion, and returning customer rate, I invite you to book a free audit call and discuss what we can do for you!