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The What, Why, and How of Average Order Value for Furniture E-commerce Businesses + 11 Real-Life Examples

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The What, Why, and How of Average Order Value for Furniture E-commerce Businesses + 11 Real-Life Examples

Businesses often underestimate the importance of average order value (AOV). AOV is one of the essential metrics for e-commerce stores. Understanding what your AOV is, why it is important and how you can increase it can bring strong benefits to your company. 

What is average order value?

Average order value (AOV) measures the average amount of money that a customer spends on every order placed over a specific period of time. Being aware of your company’s AOV can help you evaluate your online marketing efforts and optimize your pricing strategy to measure the customers’ value in the long term. 

To calculate the average order value, you divide the total revenue of your company by the number of orders made. 

AOV equation

Now you’re probably wondering: Why is average order value important? Understanding your AOV and its implications will benefit your company in a number of ways. Let’s take a look at a few of them. 

  • Set targets for customer acquisition costs (CAC) - Knowing the AOV is a great benchmark for setting a budget for customer acquisition. Remember, the average order value should be a lot higher than the amount spent to acquire each new customer.
  • Understand customer behavior - Analyzing the AOV gives you a glimpse into the purchasing habits of an average customer. Based on these insights, you can decide whether you need to change your pricing strategy, messaging, and even website user experience.
  • Increase profit - Higher AOV means higher profit. Understanding this metric and finding ways to boost it will also increase your business's bottom line.

 

How to increase average order value

An array of tactics can help you increase your average order value. But instead of going by the book, we decided to check what leading furniture players are doing to boost AOV. Here are 11 examples to inspire your next move:

1. Provide 360-degree product images

When it comes to the online furniture purchasing journey, an outstanding visual experience is the best way to compensate for the lack of tactile sense. Google’s metrics have shown that consumers interact with 360-degree spin four times longer than with conventional product photos alone. 

Using 360-degree visuals on your product pages can emulate the “touch-and-feel” experience of shopping in-store. The result? Increased customer purchasing confidence. 

Implementing a 360-degree viewer on your product pages enables customers to better look at the product’s fabrics, material, and color. This improves the customer experience, but it also increases your conversion rates and AOV.

EQ3 is a furniture retailer that has implemented a 360-degree viewer on its product pages to redefine online furniture shopping. By doing so, EQ3 witnessed a 36% increase in its conversion rate and an 88% increase in AOV. EQ3 also uses the 360-degree HD viewer to create an endless aisle in-store experience for its customers, thus allowing them to browse and order products that are not showcased within the store.

EQ3 Reverie Sofa with 360-degree viewer

EQ3 Reverie Sofa

 

2. Offer product recommendations

One of the best ways to increase your average order value (AOV) is by offering product recommendations on your product pages. This can be easily done with cross-selling and upselling. These tactics are different but closely related, and both of them involve giving product recommendations to customers to increase AOV but use different approaches. 

When it comes to cross-selling, companies recommend related products to add to their customers’ final purchases. For example, when purchasing a sofa, the retailer or brand may offer a set of pillows that go with that sofa. 

On the other hand, upselling is also when companies make personalized recommendations to convince customers to purchase a more expensive product with a higher value instead of the one they intended to buy. 

These two tactics are very powerful because they can demonstrate to your consumers that you understand their needs. By offering product recommendations, you can increase your revenue and improve customer retention and loyalty. Just remember: always recommend as a friend would. Your upsell or cross-sell strategy needs to be helpful, just like when someone suggests a product to a friend because no one wants to feel like they are being sold to.

A great way of offering product recommendations can be seen on Interior Define’s website. Their product recommendations are listed at the bottom of their product pages. This section also includes designer favorites.

Once a customer adds a product like a sofa to the cart, a pop-up is displayed on the webpage suggesting that the customer purchase throw pillows that go well combined with the sofa. This is an excellent example of a cross-sell tactic.

One thing to note is the importance of product visual quality in the recommendation sections. Presenting HD images on the product pages instills confidence and paves the way to the add to cart button.

Interior Define Add Throw Pillows Pop-up

Interior Define's "Add Throw Pillows" pop-up

 

3. Sell more products in one bundle

Offering promotions is always an excellent way to attract more customers and increase your AOV. One way to promote your products is by selling several of them in one bundle. 

If you want to persuade your customers to purchase more products, merge them into a product bundle that will cost less than if the same items were purchased separately. By doing so, you will increase the perceived value of your customer’s purchase and increase your AOV. 

Article offers bundles to its customers according to the setting they want to furnish. The team behind Article has prepared furniture bundles for living rooms, outdoor spaces, home offices, bedrooms, and dining rooms. 

For each of these bundles, Article offers visuals of the particular products they have combined in a bundle and an in-context image that presents how the pieces of furniture from the bundle fit together in a specific setting. This can ease the purchasing process for customers and increase the company's AOV.

Article's Furniture Bundles

Article's furniture bundles

 

4. Introduce a "Shop the look" feature

Offering product suggestions on your product pages is a great way to increase sales and AOV. Furniture players found a way to increase their AOV by providing their customers with previews of entire room settings. 

One of the furniture companies that offers product suggestions in its e-commerce stores is Temple & Webster. They have created a “Shop the Look” option on their product pages, where customers can view an assortment of products that go well together in the same room setting. 

They present in-context imagery of a specific room in which several products are combined to create one distinct look. Customers can purchase a separate product or shop the entire look by clicking on each of the products in the image and getting basic information about the products.  

Shop the look by Temple & Webster

Temple & Webster's Shop the Look

 

5. Include product suggestions in Add to Cart

Another way to increase the average order value is by providing consumers with product suggestions in their shopping carts. 

Offering other compatible products with the one already in the cart can persuade purchasers to buy another piece of furniture or accessories to complete the look. As a result, you can increase your AOV.

Similar to product recommendations, furniture businesses should pay attention to the quality of product visuals recommended in the shopping cart. 

Mitchell Gold + Bob Williams (MGBW) is a furniture company that provides its customers with product suggestions inside the shopping cart. This feature is called “Complete the Look.” It allows shoppers to purchase additional products that can complete their entire room setting based on the products they’ve added to their carts previously. 

shopping-cart-_-Mitchell-

 

Mitchell Gold + Bob Williams' add-to-cart product suggestions

 

6. Use shoppable user-generated content

Another good way to boost your online sales and AOV is through using shoppable user-generated content (UGC). This involves using real-life images that customers upload on their social media profiles.

Made is one of the companies that presents visuals on its website that were taken by customers. They have an entire page displaying consumers’ images of their furniture products in real-life settings. 

By doing so, Made presents how the product looks in an actual room, and it also gives potential consumers ideas on how to combine their furniture products by looking at how previous customers have done that. What’s more, website visitors can look through those images and get information about which products are in each picture, as well as the fabric choices and product prices.

Made's user generated content

Made's user-generated content

 

7. Offer virtual shopping

Ever since online shopping has become an inseparable part of our lives, virtual events, showrooms, and consultations have turned into the new normal.

When shopping online, customers often want to get a better feel for how the furniture would look in their space. Today, furniture companies offer virtual consultations to enable customers to jump on a video call with their design experts and get a better perspective of the furniture they want to purchase. By doing so, furniture companies are creating a seamless online shopping experience that purchasers love. 

The forward-thinking furniture retailer Heal’s has implemented virtual shopping as an option on its website. As a result, they’ve seen 14 times higher conversion rates and 57% higher AOV. Heal’s impeccable e-commerce product pages and virtual consultations have been a great way to improve the customer experience and, at the same time, boost the company’s AOV.

Heal's virtual shopping, powered by Hero

Heal's virtual shopping

 

8. Provide convenient payment options (buy now, pay later) 

“Buy now, pay later” is a payment method that enables consumers to pay a small amount of the total product price, receive the product, and then pay installments every month after that. 

According to Adobe, transactions using this payment method are 18% larger than orders placed with other payment options. This proves that if you offer such a convenient payment option, customers are more willing to spend more.

Design Within Reach is a furniture retailer that goes above and beyond to provide customers with an engaging furniture shopping experience. They implemented the “buy now, pay later” service, giving customers the flexibility to split their purchase into monthly payments such as three, six, or 12 months, based on a schedule that best fits their budgets.

Buy now pay later payment option of Design Within Reach

 

Design Within Reach's partnership with Affirm

 

9. Establish a flexible return policy

Offering a flexible return policy within your e-commerce store will make you more transparent with your customers. UPS’s 2019 Pulse of the Online Shopper study reported that 73% of shoppers let their personal return experience affect their future purchases from the same retailer. That is why having a flexible return policy now is more important than ever. 

Furniture retailers and DTC brands that offer a good product return policy can prevent losing customers and increase loyalty toward their brand. A flexible return policy lifts a heavy burden off customers' shoulders, motivating them to make a purchase. 

Inside Weather is a DTC furniture brand that offers a remarkable product return policy that separates it from its competitors. Customers enjoy a 365-day home trial of the furniture they purchase. Creating such outstanding return policies will help you create a delightful online shopping experience and even boost the average order value of your company. 

Inside Weather return policy

Inside Weather has a 365-days return policy

 

10. Create a minimum price for free shipping

Shipping is very expensive, and no one wants to pay for it. A National Retail Federation study stated that 65% of customers are searching for free shipping before adding products to their online shopping carts. And according to Invespcro, 61% of consumers are likely to cancel their purchase if there is no option for free shipping. 

But how can you increase AOV using this tactic? Offer free shipping for orders above a certain amount of money. 

Many furniture companies have found that free shipping increases their AOV by offering complementary products in price ranges that help customers meet the free shipping order minimum. The best strategy for companies is to set the amount above their AOV. That way, they will make more sales and increase the average order value. 

The DTC furniture brand Yardbird offers free shipping with an order minimum of $2,000. When customers purchase furniture from Yardbird, and their final amount is $1,900, the website offers complementary products with a price range of more than $100 so that the price can be higher than $2,000. This way, while the customer gets free shipping, the company gets its AOV boosted.  

yardbird furniture

Yardbird's free shipping

 

11. Give limited-time offers

Limited-time offers are irresistible for customers, especially for people who need an incentive to make the purchase. Giving customers special discounts can help you sell more and increase your average order value.   

As a result of the limited-time offer, more customers visit the website and browse through the product pages before the time offer expires, taking advantage of the opportunity to purchase furniture.

Plush used a countdown timer on its product pages to remind its customers of the current offer. They not only have it at the top of their homepage but there is also a countdown clock on the right side of each product visual, just above the configuration tool.

Plush's limited time offer

Plush's limited time offer

 

After reading these eleven tactics for increasing your company’s average order value, you probably have some ideas of what you can do to improve your product pages. If you want to talk more about how 3D product visualization can help you increase your AOV, we’re happy to help.

LET'S TALK

 

UX Benchmark Study Results From The 3 Leading European Furniture Retailers 2021

About Author

Viktorija Nikoloska
Viktorija Nikoloska

Content Marketer at Cylindo

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