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What Spanish tapas culture can teach us about average transaction value

Posted by the Wi5 Team12th September 2019General

Average transaction value (ATV) is the average amount your customers spend with your business, so, the higher the better – right?

If you’re taking ATV as the spend per entire visit, then yes, absolutely. But for most of us, ATV is defined as the spend per each transaction. And, if you’re just measuring success as a high ATV, you might be missing out on a world of opportunity and growth. Mobile ordering technology, for example, has made more low-value purchases an increasingly viable model for sales.

Mobile ordering at the point of sale

Digital restaurant sales, largely driven by mobile, are predicted to grow to 30 percent in 2025 (from just 6 percent in 2017).

Only focusing on high ATV is old-fashioned thinking. Mobile ordering can tap into the natural flow of the order and payment experience, which puts ATV in a different light. New ordering methods place less focus on the one-off payment at the beginning/end of a visit and more on the potential commercial touch points throughout a customer’s entire visit. For example: If a customer wants to add an extra side to their order but has to wait too long to catch a server’s attention, they might not bother. With mobile ordering, that barrier is eliminated and there is natural opportunity to further optimise each visit.

What do tapas have to do with it?

Whether it’s gambas pil pil or patatas bravas, the tapas concept offers something for everyone. You’re spoiled for choice – and that’s the point. Originally a bar snack, people enjoy a whole meal out of tapas these days. The idea is that you order several rounds of small dishes over the course of an evening.

This model is followed in Japanese culture with sushi. And, here in the UK, we enjoy getting extra sides or desserts, and it’s standard to order a few rounds of drinks at the pub.

Globally, there are plenty of cultural reasons to focus on lower-value reordering, but the Order & Pay methods we’ve used up until now haven’t matched this natural inclination or appetite.

Mobile ordering, then, changes this playing field.

The alternative strategy to achieving a higher ATV

In this study by the University of Illinois on China’s popular Alipay system, customers were found to spend 2.4 percent more per transaction on mobile than other methods, and their number of transactions went up by 23 percent.

If you shift your sales focus to reordering – and you introduce a mobile Order & Pay solution – you encourage people to spend more overall. You should, therefore, see an increase in transactions per visit. And, once you’ve encouraged the culture of reordering in your business, then evidence shows you’re even likely to see increased spending per transaction because people spend more on mobile.

By making mobile Order & Pay a part of your sales ecosystem, your customers can enjoy a quick and easy ordering experience, and you’ll get more sales.

Now, how about one more round of pinchos

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