What is the eCommerce Average Order Value (AOV)?
Average Order Value (AOV) is a crucial metric in e-commerce that measures the average amount of money customers spend per transaction on a website or app. It’s calculated by dividing total revenue by the number of orders.
E-commerce AOV Formula:
AOV = Total Revenue / Number of Orders
For example: If an online store generates $10,000 in revenue from 500 orders, the AOV would be
AOV = $10,000 / 500 = $20
This means the average customer spends $20 per order on this store.
Check out our eCommerce Average Order Value (AOV) Calculator to easily calculate and optimize your store’s revenue.
Why is AOV important?
- Insights into customer behavior: A high AOV indicates customers are buying more per transaction, which can be due to effective upselling, cross-selling, or product bundles.
- Revenue growth: Increasing AOV is often more efficient than acquiring new customers. Focusing on strategies to boost AOV can lead to significant revenue growth.
- Marketing performance evaluation: AOV helps assess the effectiveness of marketing campaigns and promotions.
How to Increase eCommerce Average Order Value (AOV)?
- Offer related products when people shop.
- Combine items and offer them at a discount.
- Encourage customers to buy more to get free shipping.
- Create urgency to make people buy now.
- Suggest products customers might like based on their past purchases.
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