Ecommerce - Increase AOV With These 3 Tips

Source: https://www.wte.net/Blog/November-2022/Ecommerce-Increase-AOV-With-These-3-Tips
Date: November 2022
Author: Martin W Smith

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Introduction

The post explores why online merchants underutilize creative product combinations to boost average order value (AOV). The author draws on lessons learned from his ex-wife Janet McKean, a retail merchandising expert, who worked at offline retailers including The Bottom Line gift shop in Pennsylvania and the Museum of Contemporary Art store.

Three Merchandising Strategies

1. Juxtaposition

Janet emphasized pairing items with contrasting qualities to highlight each product's unique value rather than combining similar products. The author illustrates this concept through Prada Marfa, a permanent art installation in Texas featuring a luxury boutique incongruously placed in windswept plains—creating stark contrasts between civilization and nature, commerce and emptiness.

2. Sum Greater Than Parts

This strategy involves bundling items whose combined impact exceeds individual value. The author references The Met's example: pairing silk scarves, tea, and mugs creates an enhanced experience—"the sum of this significant 'sum greater than the parts' merchandising is demonstrably greater than adding up the parts."

3. Decoy Pricing

According to the explanation cited, consumers alter preferences based on how options are presented. Higher-priced anchor items make moderately-priced options appear more affordable. Janet's MCA store success exemplified this: displaying expensive Jeff Koons plates ($3,000 each) above $50 art snow globes dramatically increased snow globe sales by positioning them as bargains.

Conclusion

These offline retail principles translate effectively to online merchants and service businesses seeking increased revenue.