What is average order value?
Average order value (AOV) is a key metric in ecommerce that represents the average amount of money a customer spends in a single transaction on your website. Tracking AOV helps you understand customer purchasing behavior, shape your marketing strategies, and ultimately, maximize your revenue.
Formula to calculate AOV:
For example, if your store generated $10,000 from 200 orders last month, your AOV would be $50.
In this video, you’ll learn how to calculate AOV and see how small changes can make a big difference in overall revenue.
Why is average order value important?
Click through the dropdowns to learn more about ways understanding and monitoring AOV can benefit your business.
Revenue growth
By increasing AOV, you can earn more from your existing customer base without spending additional resources on acquiring new customers.
Pricing and promotion strategy
Analyzing AOV can guide your pricing strategies and promotional offers, such as free shipping thresholds or bundle discounts, to encourage customers to spend more per transaction.
Customer loyalty
A higher AOV often indicates that your customers are finding greater value in your products and recommendations, helping foster loyalty and long-term engagement.