How to Use Free Shipping As a Tool to Increase Average Order Value

How can you entice your shoppers to add just one more item to their cart before purchase? Read and find out!

The Importance of Free Shipping in Ecommerce

Let’s summarise & conclude the importance of free shipping in ecommerce by using a Drake-meme accurately demonstrating common shopper behaviour and thinking:

There, done. Let’s now move to the actual topic and how free shipping can be easily utilized as a tool to improve average order value, essentially paying the expense of shipping.

How to Use Free Shipping to Boost AOV

The majority of sites add a condition – commonly the minimum order value when an order qualifies for free shipping. Once the threshold is met, the order ships for free and as expected, the retailer makes more sales. The key challenge is obviously how to entice consumers to add more products to the cart so that the cart meets the qualification criteria, while at the same time, minimizing the risk of cart abandonment, which could be the outcome if the process is perceived as too laborious. One tool for this is Nosto’s Free Shipping Recommendations.

Increase profitability with simple merchandising tricks

Free Shipping Recommendation tracks what items customers have added to the cart and is able to recommend products that go well together with the cart, increasing the relevance and thus, the likelihood of adding more items to the cart. The addition to the regular cart recommendation is visibility settings which, in conjunction with price rules, allow control of when the recommendation is shown and how expensive the items are that are shown. As most sites and businesses have affordable but high-margin accessories or similar add-ons in their inventories, the trick is extremely simple.

For example, below on Costo, the criteria for free shipping is 90€. The prompt to add more items to the cart appears when the shopper has at least 84€ already in their cart (visibility settings). In this case, the accessories are attachable bobbles worth 6€, making the headwear customized and personal for each shopper.

The end result: When cart value is almost at the required 90€, this is a simple and fast way to add an add-on to the shopping cart, resulting in a higher AOV, more sales, and also happier customers who get the shipping for free.

Eager to Start Increasing AOV and Other KPIs?

Scenarios, businesses and inventories unarguably differ but if you’re interested to learn more about how you can increase your average order value or other KPIs using Onsite Product Recommendations, send our product specialists a message and ask!

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