Personalizing your customer journey means helping customers find the products they are looking for more easily and providing them with offers tailored to their needs.
When you offer a more engaging and rewarding shopping experience, your customers will spend more time browsing and are likelier to make higher purchases.
You can measure the size of customer orders based on the number of products per purchase. This metric is called the “basket size” or “cart size.”
One effective way to encourage larger basket sizes is through gamification. Gamification in ecommerce involves applying game-like elements to a non-game shopping environment.
This comprehensive guide delves into the details of basket size in ecommerce. We will explore:
- The definition of basket size and why it is important
- How to measure basket size
- How to use gamification and other strategies to increase basket size
- Next steps for ecommerce stores
Whether you are a business leader, growth expert, or marketing professional at a large enterprise-level company, this post will provide valuable insights and actionable steps for leveraging basket size to increase revenue.
Definition Of Basket Size
In the ecommerce industry, basket size is a metric that cannot be ignored. Units per transaction (UPT), or the basket size, measures the average amount of goods purchased in a single transaction.
Why Is Basket Size Relevant?
Basket size is a key metric for retailers to measure their sales performance. Increasing the customer’s average basket size (ABS) enables ecommerce businesses to generate greater revenue from each transaction.
It also helps businesses minimize operational costs by reducing the shipping and handling costs per item. The overall cost per transaction decreases, making the business more profitable.
Customers who make larger purchases demonstrate higher satisfaction with the products and shopping experience.
On the other hand, smaller basket sizes could indicate difficulties navigating the website, inappropriate pricing, or a shortfall in the product range.
Retailers can make data-driven decisions by tracking the average number of items in a basket for each purchase. For example, if they find that a specific product category consistently performs well regarding basket size, they can ramp up marketing efforts in that category.
How To Measure Basket Size
By analyzing data on the number of items in a customer’s shopping cart, you can learn about their preferences and shopping habits.
We will explore the tools and techniques used to track and analyze basket size data and contemplate how businesses can leverage this information to improve performance and increase revenue.
Finding The Average Basket Size (ABS) Across Customers
You can calculate the average basket size by dividing the number of products your business has sold by the number of customer transactions.
For instance, if a business sold 200 items over 100 transactions, the ABS would be two items per transaction.
Ecommerce shops use ABS to paint a picture of their customers’ shopping journeys. You can also evaluate the effectiveness of marketing strategies, product displays, and product ranges by analyzing average basket size.
Factors That Affect Average Basket Size:
- Product range
- Pricing strategy
- Complementary items
- Seasonal changes
- Website navigation
- Personalized marketing
- Customer loyalty
- Customer reviews
- Notifications and reminders
- Brand community or social connection
If your ABS is below the industry average, it could indicate that customers are not finding what they need. In contrast, an above-average figure can indicate successful marketing tactics.
Basket Size Vs. Average Single Transaction Value
While basket size and average single transaction value may seem similar, they provide slightly different insights into a business’s sales performance. But they are both important metrics that ecommerce businesses use to track customers’ spending habits and product preferences.
Basket size measures how many items a customer purchases in a single transaction. Average single transaction value, or average ticket size (ATS), measures how much a customer spends on a single transaction.
The average single transaction value is calculated by dividing the total sales revenue by the number of transactions. For example, if a business makes $10,000 in sales over 100 transactions, the average single transaction value would be $100.
This metric is helpful for understanding how much value each customer brings with each purchase. A larger basket size will generally lead to a higher average single transaction value because the customer purchases more items per transaction.
Basket Size Vs. Average Order Value
Average order value (AOV) measures how much a customer spends on average per order. This is calculated by dividing the total revenue by the number of orders. For example, if a business makes $15,000 in revenue from 100 orders, the AOV would be $150.
Order value is often confused with transaction value. To understand the difference, let us look at a hypothetical scenario: Lisa visited an online bookstore on Monday, placed five books in her cart, but only purchased two for $50. On Tuesday, she revisited the online bookstore and bought the other three books in her cart for $75. Her total order of five books will be delivered on Friday.
- Average basket size: Lisa bought five products over two transactions, one with two products and the other with three products. Her average basket size is 2.5 items per transaction.
- Average single transaction value: Lisa spent $50 on Monday and $75 on Tuesday. Her average single transaction value is $62.50.
- Average order value: If Lisa spent $50 on Monday and $75 on Tuesday, her order value is $125.
Tracking AOV over time can provide valuable insights into how well a business’s marketing efforts perform. If a business runs a promotion that increases AOV, it may be worth running similar promotions in the future.
Analyzing Your Basket Size Metrics
To find growth opportunities, you should analyze your basket size metrics. They can help you optimize your product mix, pricing, and marketing strategies to increase revenue.
First, let us clarify the differences between measuring in-store and online basket sizes.
Differences Between Physical Stores And Online Shopping Experiences
Retail shopping has experienced a significant transformation in recent years as more consumers shift to online shopping. How customers shop in physical stores contrasts markedly with the processes that occur in online shopping.
Physical Store Basket Sizes
In a brick-and-mortar store, customers can physically touch and examine the items and be guided by architecture and signage. These physical store features can encourage them to purchase more products, including small-ticket items.
Accordingly, physical stores can attract and retain customers by creating a rich sensory experience that engages all five senses. Consumers may also rely on customer service representatives to provide guidance when selecting items or to answer any questions, which may increase their shopping cart.
Physical stores also face significant limitations when utilizing basket sizes and consumer behavior data. While physical retail stores can attempt to track on-site customer behavior, such as the aisles visited or products viewed, they cannot capture the same information as online stores.
As a result, retailers typically rely on tools like loyalty programs to collect customer data.
Online Shopping Basket Sizes
Ecommerce relies heavily on the automation of instant results, real-time product availability, and more. However, shoppers cannot touch or use the products they are interested in when shopping online. Retailers are challenged with building strong consumer relationships and personalized experiences online.
Personalization and upselling strategies can be intelligently automated online, allowing ecommerce businesses to create campaigns that target individual customer preferences. This way, online stores can almost instantly offer complementary items or suggest products relevant to the customer’s browsing behavior.
As a result of these marketing efforts and the convenience of instant online purchases, online shopping might result in larger basket sizes than what is usually observed in physical stores.
Online tools like Google Analytics and Salesforce can be used to track and analyze customer data and sales patterns. This digital information can inform marketing, product development, and merchandising decisions that ultimately maximize the value of each sale.
Analyzing Trends In Basket Sizes
You can identify patterns and changes in buying behavior by tracking basket size trends. This can inform more targeted marketing campaigns and optimize your inventory management.
Periods Of Time For Analysis
There are several periods of time that you can use to analyze basket size trends. Daily, weekly, monthly, and seasonally are all relevant periods for analysis.
- Daily basket size analysis can help you identify buying behaviors connected to the time of day.
- Weekly and monthly basket size analyses provide a broader overview of consumer behavior patterns. For example, you may notice basket sizes increase just before the weekend or at the end of the month.
- Seasonal basket size analysis provides insights into changes across different periods of the year, for instance, during Festive Seasons or Black Friday.
With these insights, you can tailor your marketing efforts more strategically to help increase ABS with fewer fluctuations.
Variety Of Products In A Basket
Customers who purchase a wider range of products tend to have larger baskets and spend more money. This is because offering diverse products gives customers more options and opportunities to find exactly what they want.
A basket filled with multiples of the same product holds fewer opportunities for personalized product recommendations than one containing a variety of products.
Are there other ways that businesses can increase basket size? One strategy that has gained popularity in recent years is gamification. By turning the shopping process into a gamified experience, you can engage customers and encourage them to purchase more items.
How To Use Gamification To Increase Basket Size
A gamified approach can make shopping more rewarding and engaging, leading to more purchases. Gamification uses game-like elements to motivate customers to take certain actions.
Consumers generally respond well to gamification tactics because they are engaging and rewarding. Below are eight ways online businesses can use gamification to increase basket size.
- Personalized Recommendations
- Loyalty Programs
- Limited-Time Offers
- Gamified Checkout Process
- Progress Bars
- Product Bundles
- Free Shipping Thresholds
- Try-Before-You-Buy Experiences
1. Personalized Recommendations
Using data on customers’ past purchases and browsing behavior, your website can recommend products that customers will likely be interested in. This encourages customers to make additional purchases and increases the likelihood of a larger basket size.
For instance, Amazon’s “Recommended for You” feature shows other relevant products based on a customer’s browsing and purchasing history. By offering related products, Amazon encourages customers to add more items to their cart and increase the value of each transaction.
2. Loyalty Programs
You can encourage customers to continue buying from your online store by giving points or rewards for every purchase. This approach increases the basket size and encourages customers to make larger purchases to earn more rewards.
Mexican retail store chain OXXO implemented gamification to boost sales using a digital Scratch Card Game. They launched a new store in Peru and needed to create more awareness to nurture loyal customer relationships.
Each visitor to the store could participate in the Scratch Card Game to win a discount, a spot prize, or the opportunity to win a grand prize of a 20-second shopping spree at OXXO.
3. Limited-Time Offers
By offering time-limited deals, businesses can create a sense of urgency and scarcity that drives customers to purchase more. This approach increases the basket size when customers take advantage of a deal.
Countdown timers are a gamification element that creates urgency and encourages customers to purchase quickly. Another way to run a time-based gamified promotion is using an Advent Calendar Game.
Customers can “open” a door on the Advent Calendar to find a daily deal. The other deals are unknown, which creates an expectancy and urgency in the customer not wanting to miss out on a discount or voucher redemption.
4. Gamified Checkout Process
Another way to gamify the online shopping experience is to introduce a gamified checkout process. By adding steps, levels, or rewards to the checkout process, businesses can encourage customers to complete their purchases and add more items to their carts.
Alerting customers of special offers related to the products in their cart is a personalized way to use gamification to increase basket size. Your customers will also feel that more value has been added to their shopping experience.
5. Progress Bars
Have you considered adding a gamification element that tracks a customer’s progress toward a goal?
For example, you could offer a discount to customers who spend over $100 in a single transaction. A progress bar can be displayed on the checkout page showing how much more the customer needs to spend to reach the goal.
6. Product Bundles
Offer pre-packaged sets of related products at a discounted rate to encourage customers to purchase more items at once. This approach increases the UPT and encourages customers to buy more expensive products or in bulk to save.
If your business is an online clothing retailer, consider offering a discounted bundle of a dress, a pair of shoes, and a handbag at a discounted price. This bundle encourages customers to purchase multiple items at once and makes it easier for customers to find matching items.
7. Free Shipping Thresholds
Another way to increase basket size is by offering free shipping on orders exceeding a certain threshold. This encourages customers to add more items to their cart to reach that threshold. It can also motivate them to make additional purchases in the future.
For example, you can add a 24-hour threshold on items the customers add to their cart. After 24 hours, the customer must pay for shipping. But within the window period, shipping is free.
8. Try-Before-You-Buy Experiences
Trying a product or service before purchasing it adds value to the customer experience. It helps them eliminate any uncertainty they may feel about the item’s applicability to their situation. A try-before-you-buy experience engages the customer’s imagination in a simulated environment.
But try-before-you-buy experiences can be implemented in ecommerce stores in various ways. For example, you can offer virtual try-on experiences for clothing and accessories. You can also provide product demos to let customers experience a product’s features before buying.
Another way to simulate the experience of using a product is to post user-generated content (UGC) through customer reviews and online testimonials. This approach can increase basket size by offering a positive experience with the product and making customers more confident about their purchases.
By tapping into customers’ natural desire for achievement and recognition, businesses can use gamification to create fun and rewarding experiences to motivate returning customers and additional purchases.
Personalized experiences encourage customer engagement and can keep them loyal to your brand. By utilizing customer data to provide special offers and tailored support, you can create customized shopping experiences to keep customers returning.
In this sense, gamification is an effective strategy for building lasting customer relationships and increasing their average basket size.
Next Steps For Ecommerce Stores
Basket size is a critical metric for retailers to optimize their marketing strategies and personalize customer offers. Focusing your marketing efforts on increasing the amount and variety of items in your customers’ carts will increase your revenue.
Gamification can be a powerful tool in driving engagement and increasing basket size in ecommerce. By integrating game-like elements such as points, rewards, challenges, and more into the shopping experience, you can encourage customers to make additional purchases.
How To Increase Basket Size:
- Analyze customer data
- Improve website navigation
- Recommend relevant and complementary products
- Offer various promotions and programs
- Create mix-and-match product bundles
- Provide try-on experiences
Additionally, optimizing the checkout process, inventory management, and product descriptions can ensure a smooth and efficient customer shopping experience. It will increase customer satisfaction and basket size.
Increasing the average basket size at your ecommerce shop requires a combination of factors, including personalization, optimization, and gamification. Implementing these strategies can drive more revenue and build lasting customer relationships.