Site Navigation

What is average order value?

av - er - age  or - der  val - ue
noun

Average Order Value (AOV) is a metric used by merchants to measure the average amount spent by a customer in a single transaction. For a brick-and-mortar setting, AOV can help retailers understand customer buying habits, optimize product placement and evaluate the success of in-store promotions or upselling strategies. And similarly for eCommerce, AOV is commonly used to assess the effectiveness of marketing strategies, cross-selling and upselling efforts. Ultimately, this insight can fuel smarter decisions about a business' sales strategy and point to customer experience areas that could benefit from upgrades.

How does the average order value work?

To calculate the average order value, a straightforward method involves multiplying the total revenue generated by the total number of completed transactions. This metric is valuable for evaluating customer spending patterns and the effectiveness of your marketing and sales strategies.