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E-commerce upsell definition
E-commerce upsell is a sales tactic that encourages customers to spend more money on a different product or service that complement the initial purchase.
On the one hand, the upsell tactics help businesses increase the average order value (AOV) — the average amount each customer spends when they make an order — and boost revenue growth even when there are fewer sales. According to research, shopping cart add-ons make up 10 to 30% of online shopping revenue.
On the other hand, e-commerce upsell helps consumers make the most out of their purchase with bargain add-ons and extra benefits.
Examples of upsell in e-commerce
Upsell — a sales technique recommending upgrade to an increased product quantity or size.
Add-ons — a sales technique recommending extra services that complement the purchase, such as gift packaging or a protection plan.
Bundle sale — a sales technique recommending products that specifically complement each other and are easy to add to the cart from the product page or checkout. Bundle offers are also commonly known as frequently bought together or other people also bought.
Cross-sale — a sales technique recommending products from a different category to increase the initial shopping cart value. It's often used to get customers qualify for a free delivery or special discount offers.
E-commerce upsell — best practices
E-commerce upsell, and cross-sale in particular, can be used as a building block in wider business strategy. Making your online deliveries profitable, for instance.
Although it's common for retailers to offer free delivery on all orders, it doesn’t mean that it’s the best solution for your e-commerce business. Here's an idea.
IDEAL OF SWEDEN, a global fashion and lifestyle brand for premium phone accessories, had A/B tested delivery price points in the Dutch market with Ingrid Delivery Checkout. They had also used the Free Shipping Indicator to set the free delivery criteria to a cart value of 45 EUR or above to experiment with consumer preferences, reduce net delivery cost and even get more of it back.
The idea behind a free delivery offer was to raise the average order value and transaction conversion rate, while also boosting the number of upsell products — displayed underneath the free shipping indicator — to be added to the initial cart value.
The results? IDEAL OF SWEDEN saw a 7.81% increase in the Transaction Conversion Rate (TCR) and a 7% boost in the AOV. In fact, the free delivery offer in the Netherlands was key to understanding the logic behind changing consumer habits.
All thanks to an upsell offer.
