How to Increase the Average Order Value for Beauty Brands
Your beauty business is up and running, you’re getting sales, and life seems to be good. But your brand isn’t growing as quickly as you envisioned. Sounds familiar?
However, it’s no reason to panic, because you’re not alone. Both new and experienced business owners have had the same struggles of keeping the growth steady. One way to approach it is to look at your average order value.
If your average order value is low, there are plenty of things you can do to try to change that and have your business thrive.
So, in this article, we’ll do just that and learn how to grow your beauty brand and how to increase the average order value with different tactics that’ll benefit both you and your dear customers.
Table of Contents
Key takeaways
Offer your customers bundles with products that complement each other and at a lower total price than they’d cost if bought separately.
Make sure to upsell and cross-sell your products at relevant steps of the customer journey, like the checkout.
Personalize product recommendations with quizzes, tests, AI recommendations tools, and personalized emails based on the purchase history.
Create FOMO by driving urgency and scarcity with time-sensitive sales and discounts.
Set a free shipping threshold slightly higher than your average order value.
Set up loyalty programs that will make your customers feel appreciated and make them return to your store.
What is the Average Order Value (AOV) in the Skincare Industry?
So, before we find out how to increase the average order value, let’s learn what it actually is and why it’s important.
The average order value is the average amount your customers spend each time they purchase from your business. And there’s a formula for it:
Average order value = total revenue ÷ number of orders
For beauty and skincare brands, the average order value is much more than just a number, it’s also a crucial tool for your brand’s growth, and here’s why.
Acquiring new customers with methods like influencer partnerships, marketing campaigns, and paid ads can often be expensive and eat away at your profits. Increasing the average order value is a great way to grow from your existing customer base without spending more on attracting new customers.
It’s similar when it comes to profit margins. If your customer only comes for a single product, shipping, marketing, packaging, and other costs can also thin your margins. A higher average order value helps you keep your margins at a healthy level.
When your customers add more products to their basket, they’ll inevitably be exposed to a broader product selection, fueling deeper engagement with your brand. They might find new favorites, create routines with just your products, and return to get refills of their faves.
How to Increase the Average Order Value: Effective Strategies for Beauty Brands
We now know what AOV is and how it can help your brand succeed, so let’s get into the juicy part, the tactics and strategies that’ll take you there.
Offer Skincare Bundles
Offering skincare bundles is a must in the beauty industry, if I say so myself. It makes perfect sense as customers appreciate value and convenience, and bundles make shopping so much easier. They don’t have to look through all of your catalog for a couple of products that address the same concern, because you’ve put the bundle in front of them at the right time.
And it makes sense financially for all sides. The customer gets multiple products for cheaper than it’d be if they bought the products separately, and you get an increased average order value.
For your inspo: The skincare brand The Ordinary is doing an excellent job with bundles. When you enter the website, Sets & Collections are in the main menu, and they have sets that cover certain concerns and routines, but also discovery sets with small-sized products for those who aren’t too sure what their skin prefers.
If you’re doing skincare dropshipping and use Shopify as your e-commerce platform, I suggest you check Selfnamed’s picks of the best Shopify bundle apps.
Upsell and Cross-Ssell Your Products
Upselling and cross-selling are some of the other classic approaches how to increase the average order value in the skincare game.
By upselling, you’re encouraging your customer to buy a more expensive or higher-end product than they originally intended. For example, the customer is looking to buy a 50 ml serum, but you’re offering them the 100 ml version of the same product for a better value per milliliter.
Cross-selling means that when you’re customer is buying a certain product, you encourage them to add a different, complementary item with it. Let’s say they add a cleanser to their cart and a pop-up appears with an offer for a moisturizer.
You can upsell and cross-sell by adding pop-ups or suggestions when the customer adds a product to their cart, or also during the checkout steps.
For your inspo: It’s no surprise that a retail giant like Sephora also upsells and cross-sells, because it works! When you add a product to your cart and continue to checkout, they’ll show you a selection of products under You might also like..
Personalize Product Recommendations
Another way how to increase the average order value is to personalize product recommendations. There are several methods to do it: create quizzes that’ll help understand the customers better, collect cookies from their browsing history, have AI recommendation tools, create personalized emails, and so on.
Beauty is deeply personal and intimate, so making data-driven suggestions can prove to be very effective not only to make your customer feel seen, but to help grow your AOV and the store in general.
For your inspo: One of the first cosmetics brands I saw that offers an in-depth quiz to personalize their offer is the hair care company Function of Beauty. They ask all about your hair concerns, what you prefer in products, and what you wish to improve, and at the end, they offer you personalized products (shampoo + conditioner).
Use Time-Ssensitive Discounts
Time-sensitive discounts and offers are a fantastic way to nudge those indecisive customers toward a purchase and a higher average order value.
Urgency and scarcity are powerful drivers for action, and limited-time offers can motivate your customer not to postpone buying an extra item, because it won’t be available for the same price again.
You can do flash sales, exclusive seasonal deals, and timed offers (only today or only this week, for example).
For your inspo: It’s hard to find what beauty brand (apart from the high-end luxury ones) that doesn’t use this tactic to increase the AOV. One example is Fenty Beauty — at the time of me writing this article, they’re doing The Summer Send-off Sale with discounts up to 60% until the supplies last. Here they’re using seasonality and scarcity to drive sales.
Set Free Shipping Thresholds
A lot of players in the skincare industry create free shipping thresholds to drive up the average order value. And beauty market trends like this aren’t just a way to delight the customers, they can be crucial to your business.
You’ll want to look at your AOV and set the free shipping threshold slightly higher than that, so your customer is encouraged to add something else to their basket. And, boom, you just increased your average order value. Easy as that!
For your inspo: Even high-end brands like Elizabeth Arden use this strategy — their free shipping threshold is $50.
Create Loyalty Programs
Next on our quest on how to increase the average order value, we’ll look at loyalty programs. Such incentives can create a deeper bond with you and your customers, making them feel included and like a part of something bigger.
Because of this, by setting up loyalty programs, you can also grow your AOV. You can do it by creating a reward or point system, granting early access to customers in the program, offering exclusive samples, and more.
For your inspo: Glow Recipe’s loyalty program Glow Club is a point system where by doing certain actions (join the program, share your email, $1 spent =1 point earned, take a skin quiz) you earn points. With the points earned, you can then redeem discount codes, free products, etc.
Common mistakes to avoid when you try to increase AOV
There are many ways how to grow your brand and how to increase the average order value, but there are nuances with which you have to be careful in order not to lose the healthy momentum. Let’s go through them!
Overwhelming customers with too many choices
When your customer is shopping on your store and is interested in a particular product, they don’t need to see 20, 30 other recommended products because it can lead to confusion and choice anxiety.
Rather than cramming tens of products in the recommendations, I suggest you choose around three for each product. This will feel more personal and curated without overwhelming the shoppers.
Failing to align promotions with customer needs
Presenting your customers with irrelevant products to their needs or shopping history can feel fake and pushy. As someone in the industry, I’m sure you understand that beauty is subjective, so promoting products for oily skin to someone who previously bought a serum for dry skin is eek.. not good, and you risk them abandoning their cart completely,
Whatever you additionally offer your customer should feel personalized and highly relevant to them.
Ignoring post-purchase experience
As funny as it sounds, a successful, higher value purchase doesn’t mean the end for increasing the average order value. Sure, you got that win, but it’s so, so important to make the customer feel appreciated throughout every step of their buying journey.
Make sure you have your order confirmations, thank-you for shopping emails, delivery and shipping updates are in order because all of this will create a pleasant experience for the customers, making them return to your store again and again.
If you fail at this step, you risk this higher value purchase being a one-time win, rather than a long-term, fruitful AOV-increasing strategy.
Final thoughts
Reading this article, you might’ve noticed that boosting your average order value isn’t just about pocketing more profits from your business. It’s also a way to make your customers feel special and appreciated by offering personalized offers and affordable shopping options.
I suggest starting to introduce these methods step-by-step, see what works and how your customers respond, and if you see it working, proceed to the next tactic. This will help you not to overwhelm both yourself and your customers.
I hope you now understand how to increase the average order value and will use what we discussed to make your store thrive. Good luck!
Frequently Asked questions
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Increasing your AOV is a powerful way to grow your brand without the high costs of attracting new customers. A higher AOV also helps maintain healthy profit margins, as costs like shipping and packaging are spread across more items in a single order. Additionally, when customers buy more, they engage more deeply with your brand and are more likely to find new favorite products, leading to repeat sales.
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Several tactics can effectively boost your AOV. You can offer product bundles with complementary items at a lower price than if they were bought separately. Upselling and cross-selling at key points in the customer journey, like the product page or checkout, can also be very effective. Other successful strategies include setting a free shipping threshold slightly higher than your current AOV, creating time-sensitive discounts to drive urgency, and implementing loyalty programs.
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You should avoid overwhelming customers with too many product recommendations, as this can cause confusion and lead to cart abandonment. It is also crucial that all promotions and recommendations are highly relevant and personalized to your customer's needs and purchasing history. Finally, never ignore the post-purchase experience, as a positive and pleasant experience is key to turning a high-value purchase into a long-term relationship.
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