Average Order Value

What is average order value?

Average Order Value (AOV) is the average money amount spent each time a customer places an order on an online store or shopping app. To calculate the average order value, you need to divide total revenue by the number of orders: AOV=revenue/orders.

For example, your store sales in November were $50,000 and the number of placed orders was 200. In this case, your Average Order Value was $250.

Why average order value is important

If you know your Average Order Value you can improve it thus increasing your final revenue. You can work on the quantity of the products per order, order list content, items price, or order frequency. By optimizing the pricing strategy, inventory (what people buy more often), and generating more orders overall or per customer, you can scale your profit.

Ways to increase average order value

More orders

• Offer discounts. Offering discounts on the first order is an excellent way to convert a visitor to a customer.
• Offer free shipping. Free shipping for specific order value threshold or on local delivery works best.
• Give gift cards. Giving away postponed discounts on the next order is a good tactic to invite a customer to return and buy more.

More items

• Cross-selling and upselling. Offer related products that match the products in the customer’s cart to increase the order value.
• Offer order value discounts. “Buy more, pay less” strategy stimulates consumers to spend more.