One of the obvious ways to win at e-commerce is to get people to spend a lot of money on something. Even better, get them to spend a lot of money at one time, then come back and do it again and again. Despite the growth of online shopping as a portion of overall spending, e-commerce success remains easier said than done.
But for sellers who figure it out, the rewards are prolific. Increasing your average order value will lead to higher margins, all else staying the same, because the cost of revenue for one customer who spends $100 is lower than the cost of revenue for five customers who spend $20 each. Isaiah Bollinger, the founder of e-commerce technology agency Trellis, wrote in 2017 that “doubling AOV is just as valuable as doubling conversion rate in terms of revenue.”
So how do e-commerce merchants who charge $100 and up for a single item convince their customers to pull the trigger? Those customers can’t test the products in person, but they’re still ready and willing. Why? Fundamentally, trust is the most important thing.
Winning Customer Trust
The need for trust applies whenever you find yourself typing out your credit card number, but it’s especially important when you confront a significant price tag. Amerisleep CEO Firas Kittaneh understands this well, because he sells mattresses. Not just any old mattresses, but eco-friendly American-made ones that incorporate the FDA-approved sleep-enhancing fabric Celliant.
Amerisleep mattresses run buyers from $1,000 to $2,000. Add-ons like pillows and sheets hover in the $100 range. These prices are normal for the product category, but most people don’t make $1,000 decisions lightly. (As someone who recently bought a mattress, although not an Amerisleep one, this reporter can tell you that copious research precedes a final choice.)
“Buying a mattress you haven’t touched or felt is a big purchasing decision,” Kittaneh said. Amerisleep has a handful of physical stores and plans to expand in the coming years, but currently its showrooms are limited to Arizona. The vast majority of Amerisleep customers aren’t able to test their new mattress until it’s unpacked at home.
Generous Return Policy
A hurdle like that could trip up many potential purchases. So Amerisleep offers a 100-day trial and free-return guarantee, both of which have become de rigueur among mattress startups, as well as a two-decade warranty. Such promises make potential Amerisleep customers more likely to buy, because they know they can get their money back if they aren’t satisfied.
It takes guts to offer a robust set of guarantees: You have to believe that most buyers will love what you sell. Of course, when it comes to returns, sellers want to hit the sweet spot of removing customers’ pre-purchase worries without outright encouraging returns, since they’re so expensive for businesses. It’s a tricky balance. “The more you de-risk the purchasing decision, the more returns you’re likely to see,” a Shopify guide pointed out.
Inertia can act in the merchant’s favor, since even a streamlined returns process is a hassle. But a less-than-fully-satisfied customer won’t suggest the product to friends.
Offer Something Unique
The product should not only be great, but also different from the other options on the market. Amerisleep emphasizes its science-based designs, as well as the options for all types of sleepers. (Granted, every mattress brand claims to be the greatest thing since sliced bread.)
Social responsibility is another way to differentiate and make customers feel comfortable spending a little more. Brilliant Earth and Ada Diamonds are engagement- and wedding-focused jewelry merchants that make ethical sourcing a core aspect of their value propositions, setting themselves apart from traditional jewelers.
Yet another premium appeal is customization. Menswear brands like Indochino and Proper Cloth offer tailored dress shirts without making you leave the house. Proper Cloth has even developed a “Smart Size” quiz that aims to achieve a custom fit without making the customer do as much tedious measuring. The brand commissions custom fabrics from Italy and China — a Proper Cloth shirt can’t be replicated elsewhere.
Hearing From You and About You
No matter the unique selling proposition, responsive customer service is an absolute prerequisite for high-end e-commerce success. Amerisleep relies on live chat agents, available every day of the week, to make sure customers’ queries and complaints never hang around unanswered.
Customers who feel heard are more likely to recommend a brand to their friends, and social proof is key for big-ticket e-commerce sales. Since online shoppers don’t always have a friend to ask, they often rely on reviews and social media posts to vet a seller’s product quality. What past customers say publicly about the product is beyond a merchant’s control (that’s the whole point for curious shoppers). Still, a company can participate in the conversation around its products.
MochiSu sells handwoven bags, most of which cost more than $100, created by indigenous Colombian artisans. Founder Krystie Bastidas wrote in an email that social media is the cornerstone of the company’s marketing strategy. MochiSu leans on “authenticity and personality to drive [customers] to the site,” she explained.
Like Amerisleep, MochiSu enables shoppers to make contact via chat. “It is extremely convenient because it goes straight to our phones and provides a seamless customer experience on our site,” Bastidas told Inc. “We also use abandoned cart emails with a coupon code to drive back customers,” and the brand sends personal emails to thank buyers for their purchases.
The Buying Experience
Checkout and fulfillment also help determine whether a first-time customer becomes a repeat customer. Shippo CEO Laura Behrens Wu says that offering free shipping, or fast shipping, are integral parts of the e-commerce user experience. Cheap or convenient shipping defaults can prevent cart abandonment. A world in which Amazon dominates is a world in which independent online stores need to step up their game to match the perks of Prime.
The last step of shopping online — paying! — provides a final opportunity for merchants to help customers feel good about making expensive purchases. E-commerce platform BigCommerce points out on its blog, “Offering financing is an option that large retailers have used for years to give their customers more purchasing power.” BigCommerce added that offering point-of-sale loan options to consumers will increase the average order value.
A financing startup like Affirm, which works with mattress purveyors Casper and Purple among other high-ticket-price retailers, allows consumers to forgo a large up-front payment. Instead, they can opt for a less intimidating monthly obligation. A case study of niche retailer ZenPro Audio found that financing actually doubled AOV. Luxury makeup marketplace Beautylish is beloved by its customers for offering interest-free payment plans.
It’s not easy to build an e-commerce store where customers spend a lot of money and feel great about their purchases. But if you have a killer product, convincing customers it’s amazing and you won’t run off to Bermuda with their money is very doable, if you follow the lessons of the companies that have done it.