Digital products in ecommerce as upsells: ecommerce Hack #05

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DIGITAL PRODUCTS IN E-COMMERCE AS UPSELLS: A STRATEGY TO INCREASE SALES

In e-commerce, digital products offer an excellent opportunity to boost sales and increase added value for customers. In this article, we look at how digital products can be used effectively as upsells and what advantages this strategy offers online retailers.

Why upselling is a good idea

THE IMPORTANCE OF UPSELLS IN E-COMMERCE

Before we get to digital products specifically, upselling is a sales strategy where customers are encouraged to add a more expensive product or additional services to their original purchase. In e-commerce, upselling plays a central role in increasing the average order value and boosting overall sales. This method capitalizes on customers' existing purchase intentions and offers them added value by suggesting higher-value or complementary products.


IMPORTANCE OF UPSELLING FOR INCREASING SALES

Increase average order value: Upselling motivates customers to spend more, which leads directly to higher sales.
Improving customer satisfaction: By recommending products that complement or enhance their original choice, customers' overall experience and satisfaction is increased.
More efficient use of customer base: Upselling allows you to make the most of your existing customer base by generating additional sales without incurring significant additional marketing costs.
Increased customer loyalty: Satisfied customers who experience added value through upsells are more likely to return and make repeat purchases.

By skillfully implementing upselling strategies, e-commerce companies can not only increase sales, but also deepen customer relationships and promote long-term customer loyalty.


WHAT EXACTLY IS MEANT BY DIGITAL PRODUCTS AND HOW DO THEY HELP ME UPSELL?

Digital products are intangible goods that are sold and delivered online, such as e-books, online courses, software, music, movies or subscriptions - see below. In e-commerce, digital products offer unique advantages, especially when they are used as upsells to increase sales and add customer value.


SPECIAL ADVANTAGES OF DIGITAL PRODUCTS AS UPSELLS

Low costs: As digital products do not require any physical materials or storage, production and distribution costs are minimal. This enables a cost-efficient addition to existing product offerings.
High margins:
By eliminating physical production and shipping costs, digital products often offer higher profit margins compared to physical products. Once created, they can be sold an unlimited number of times without incurring additional costs.
Easy delivery:
Digital products can be delivered immediately after purchase, increasing customer satisfaction. Customers get direct access to their purchases without having to wait for shipping.
Scalability:
Digital products can be sold as often as required without the need to expand production capacity. This makes it easy to scale the business.
Expansion of the product range:
Digital products can supplement the existing range and offer additional sales incentives. For example, an e-book can be offered to accompany a physical product, helping the customer to make better use of the product.
Personalization options:
Digital products can easily be adapted to the individual needs and preferences of customers, which increases the relevance and attractiveness of upsell offers.


By integrating digital products as upsells in e-commerce, companies can increase their sales, improve customer satisfaction and maximize their profit margins. This strategy utilizes the special advantages of digital products and offers both the company and the customer considerable added value.


Strategic use of digital products: What are my levers for upselling?

Upselling with digital products is a clever strategy to increase your sales and offer your customers real added value. But how do you best implement this strategy? Here are some levers you can use:

Relevance: Offer your customers upsells that are relevant to their original purchase and offer real added value. For example, if someone buys a cookbook, you could offer an online cooking course or a collection of spice blends as an upsell.
Timing:
The right time for your upsell offer is crucial. For example, place it directly in the shopping cart, on the order confirmation page or in a follow-up email after the purchase.
Pricing:
The price of your upsell should be attractive, but still emphasize the value of your main product. A price that is too low could give the impression that your main product is less valuable.
Bundles:
Combine several digital products at an attractive package price. This allows you to offer your customers an additional incentive and increase your average order value at the same time.
Personalization:
Use the data you have about your customers to make them personalized upsell offers. If you know which products they have viewed or purchased, you can offer them suitable additions or upgrades.
Social proof:
Show reviews and testimonials from other customers who have already purchased the upsell. This creates trust and increases the likelihood that other customers will also buy it.

Scarcity: Create a sense of urgency by offering limited-time offers or limited quantities for your upsells. This can motivate customers to act faster and complete the purchase.

By cleverly using these levers, you can optimize your upsell strategy and exploit the full potential of digital products in e-commerce.


Types of digital products that are particularly suitable as upsells

THE EVERGREENS AND CLASSICS FOR E-COMMERCE WITH DIGITAL PRODUCTS

Some digital upsells have proven to be particularly successful and long-lasting, as they offer real added value for the customer and can be seamlessly integrated into the purchasing process. Here are some of the evergreens among digital upsells:

1. EXTENDED WARRANTIES AND SERVICE CONTRACTS:

Why it works: Customers appreciate the added security and protection that an extended warranty or service contract provides. This is particularly relevant for more expensive products.
Examples:
Extended warranty for electronic devices, protection against accidental damage, preferred customer service.


2. DIGITAL CONTENT AND RESOURCES:

Why it works: These upsells provide additional benefits and information that enhance the customer experience and make the main product easier to use.
Examples:
E-books with instructions or recipes, online courses on product use, exclusive content for members, access to a community or forum.

Screenshot from Shopify´s website

3. Software-Upgrades and Add-ons:

Why it works: Customers can extend the functionality of their purchased product or unlock additional features that better suit their needs.
Examples:
Premium versions of software with extended functions, add-ons for graphics programs, templates for presentation software, additional storage capacity for cloud services.


4. PERSONALIZED RECOMMENDATIONS AND ADVICE:

Why it works: Customers appreciate personalized recommendations and advice tailored to their specific needs and preferences.
Examples:
Personalized product recommendations based on purchasing behavior, online style advice for fashion, individual training plans for fitness products.


5.CROSS-SELLING OF RELATED PRODUCTS:

Why it works: By offering products that complement or enhance the main product, you can entice the customer to spend more while providing a more complete shopping experience.
Examples:
Accessories for electronic devices, matching clothing to a new garment, additional ingredients for a recipe.


6. DONATE TO CHARITY:

Why it works: Many customers are willing to donate a small additional amount to a good cause, especially if they can identify with the cause being supported.
Examples:
Donations to environmental organizations, social projects or animal shelters.

Screenshot from Shopify App Store´s website

7. PRIORITÄTSVERSAND UND EXPRESS-OPTIONEN:

Why it works: Customers are often willing to pay for faster shipping or preferential treatment, especially if they need the product urgently or have a special occasion.
Examples:
Express shipping, guaranteed delivery dates, preferential processing of returns.

By integrating these evergreen upsells into your e-commerce strategy, you can not only increase your sales, but also increase customer satisfaction and promote long-term customer loyalty.


DIGITAL PRODUCTS FOR THE FUTURE: THE 2024 UP-AND-COMERS AMONG THE UPSELLS

Compared to 2022 and 2023, some trends in digital upsells in e-commerce have intensified in 2024:

Personalized upsells: By using AI and machine learning, e-commerce companies can now make even more precise upsell recommendations based on individual customer behaviour and preferences. This leads to higher conversion rates and a better customer experience.

Screenshot from LoungeUp´s website

Subscriptions and memberships: The demand for exclusive content, community access and recurring deliveries has increased. Upsells in the form of subscriptions and memberships (e.g. for beauty boxes, online fitness classes or software) are therefore particularly popular.
Virtual and augmented reality (VR/AR) experiences:
More and more companies are using VR/AR technologies to offer their customers immersive product experiences. For example, virtual fitting rooms for clothing or 3D views of furniture can be offered as an upsell to make purchasing decisions easier.

Sustainability-oriented upsells: With consumers' growing environmental awareness, companies are increasingly offering upsells that contribute to sustainability, such as the option of planting a tree or donating to an environmental project.
Digital services and advice:
In addition to physical products, digital services such as online consultations, personalized training plans or interior design consultations are also offered as upsells. These offer additional added value for the customer and strengthen customer loyalty.
NFTs and digital collectibles:
NFTs (non-fungible tokens) have gained popularity in recent years. Some companies now offer NFTs as upsells that grant exclusive benefits or access to limited products.

Screenshot from lionsorbet´s webiste

Micro-learning content: Short, easy-to-consume learning content such as online courses, webinars or tutorials are offered as upsells to provide customers with additional information or skills related to the purchased product.
Virtual events and workshops:
With the increasing prevalence of online events, virtual workshops, conferences or live sessions are also offered as upsells to enhance the customer experience and strengthen brand loyalty.

Screenshot from eventespresso´s website

These trends show that digital upsells are becoming increasingly diverse and innovative. By using new technologies and adapting to current customer needs, e-commerce companies can exploit the full potential of this strategy and sustainably increase their sales.


TECHNICAL IMPLEMENTATION AND TOOLS FOR UPSELLING DIGITAL PRODUCTS IN E-COMMERCE

The technical implementation of your upsell strategy can be much easier than you think, especially if you use a common store system. Here are some tools and approaches that can help you:

UPSELLING APPS AND PLUGINS:

Bold Upsell (Shopify): This app allows you to display upsell offers directly in the shopping cart. You can set different triggers, e.g. based on the value of the shopping cart or the selected products.
ReConvert Upsell & Cross-Sell (Shopify): This app offers a variety of upsell and cross-sell features, including personalized recommendations on the thank you page and in follow-up emails.
One Click Upsell (Shopify): This app simplifies the upselling process by allowing customers to add upsells with just one click.
Magento 2 Automatic Related ProductsThis module for Magento offers automated product recommendations based on various criteria such as purchase history, category or price.
WooCommerce Upsell Order Bump OfferThis plugin for WooCommerce allows you to offer upsells directly on the checkout page.


PERSONALIZATION ENGINES:

NostoThis personalization platform uses AI to create personalized product recommendations, emails and pop-ups.
Clerk.ioThis platform offers a variety of personalization features, including product recommendations, email personalization and search optimization.
PersonyzeThis platform allows you to create personalized upsell offers based on customer behavior, purchase history and other data.


A/B-Tests:

OptimizelyThis platform offers a comprehensive solution for A/B testing and personalization.
VWOThis platform also offers a variety of features for A/B testing and personalization.

Since Google Optimize has been discontinued since September 30, 2023, you have to switch to alternatives. Tools such as the aforementioned VWO or Adobe Target are excellent alternatives for A/B testing and personalization.


Best practices for the integration of digital products as upsells

Relevance and added value: Ensure that the upsells offered are relevant to the customer and their original purchase interest.
Personalization:
Use data and analytics to create personalized upsell offers based on customers' individual needs and preferences.
Easy integration:
Integrate upsell offers seamlessly into the buying process without distracting or overwhelming customers.
Appealing presentation:
Use compelling product descriptions and visual elements to clearly emphasize the benefits of the upsell.
Test and optimize:
Conduct A/B tests to evaluate and continuously improve the effectiveness of your upsell strategies.


Success stories about digital products from field

Amazon Kindle e-books: Amazon often offers the digital version as a low-cost upsell when buying physical books.
Udemy online courses:
When purchasing a course, complementary courses or certificates are often offered as upsells.
Adobe Creative Cloud:
Adobe offers additional plugins or stock images as upsells to their software subscriptions.
Spotify Premium:
Spotify offers a premium membership as an upsell to enable additional features and ad-free listening.


Conclusion: Digital products in e-commerce as upsells: A strategy to increase sales

Digital products offer an excellent opportunity to increase sales in e-commerce and increase customer added value. Through the targeted use of upselling strategies, online retailers can increase the average order value, improve customer satisfaction and strengthen customer loyalty. The low costs, high margins and simple provision of digital products make them an ideal complement to physical products. With the right technical implementation and personalization, digital products can be seamlessly integrated into the buying process, adding significant value to both the business and the customer. Use these best practices and tools to exploit the full potential of digital upsells and sustainably increase your e-commerce success.