AOV, or average order value, is an eCommerce metric that shows the average amount customers spent per order over a specific time period. This provides insights into customer buying patterns that can be used to optimize profitability.

How do you calculate AOV?

To calculate AOV, divide the total value of orders by the number of orders over the same period. The order value should include what customers paid for products, shipping, and fees, but exclude sales tax.

Why is AOV important?

AOV is crucial for understanding revenue per order, projecting future revenue, optimizing the buyer journey, improving customer lifetime value (LTV), understanding channel profitability, and gaining insight into buying trends and patterns.

A good AOV depends on various factors including industry, geography, product type, market positioning, and customer demographics. It can vary significantly across sectors like home & furniture, fashion, food & beverage, and others.

How can I increase AOV?

Strategies to increase AOV typically involve encouraging customers to buy more and spend more. You can do this through upselling, cross-selling, bundling products, offering free shipping with a minimum order value, applying percentage discounts, introducing loyalty programs, and enhancing customer service.