Average Order Value (AOV) is calculated by dividing total revenue by the number of orders. If a store generated $100,000 from 2,000 orders in a month, its AOV is $50. This metric is crucial for understanding customer purchasing behavior and evaluating marketing efficiency.
Increasing AOV is often more profitable than acquiring new customers. Common AOV-boosting tactics include free shipping thresholds ("Free shipping on orders over $75"), bundle discounts, product recommendations, tiered promotions, and upselling premium versions or add-ons.
AOV varies significantly by category and price point. Luxury fashion might see $300+ AOV while beauty products average $50-60. Comparing AOV across competitors in the same category reveals differences in product mix, pricing strategy, and merchandising effectiveness.