What is AOV in eCommerce?

I've worked with plenty of eCommerce brands and one of the most important metrics I always pay attention to is average order value, or AOV for short. In this article, we will discuss what AOV is, how to calculate it, and why it is important for your eCommerce store. We will also provide tips on how to increase your AOV.

What exactly is AOV related to eCommerce?

AOV, or average order value is an important metric that tells you how much your store generates per order. The metric provides you with insights into the purchasing behavior of your customers.

It also helps you make informed decisions about your pricing strategy, marketing campaigns, and product offerings.

In some cases you would need to calculate your own AOV, but most analytics platforms that implement well with eCommerce solutions have this metric available for you. We'll discuss how you can manually calculate your AOV a bit further down in this article.

The 2023 eCommerce benchmark report

Where do you find your AOV?

You can find your AOV in your eCommerce platform's analytics dashboard. Most eCommerce platforms, such as Shopify, WooCommerce, and Magento, have built-in analytics tools that allow you to track your store's performance metrics, including AOV. You can also use third-party analytics tools, such as Google Analytics, to track your AOV.

How to find average purchase per user Google Analytics

Google analytics

Google use another but very similar metric called  "average purchase revenue per use". To find it, go to Reports » Monetization » Overview

How to find aov in Shopify

Shopify

Go to Analytics in the left side menu and click on it. You will then see an overview where you'll find your average order value by scrolling a bit down.

Need help to calculate your AOV? Let us help you.

This is how you calculate AOV

To calculate AOV, you need to divide the total revenue generated by the number of orders. Here is the formula:

AOV = Total Revenue / Number of Orders

For example, if your store generated $50,000 in revenue from 500 orders:

$50 000/500
Your AOV would be: $100

Why is AOV an important metric for eCommerce?

AOV is an essential metric for eCommerce store owners because it helps you understand the purchasing behavior of your customers. By analyzing your AOV, you can make informed decisions about your pricing strategy, marketing campaigns, and product offerings.

AOV is also important because it helps you measure the effectiveness of your marketing campaigns. By tracking your AOV over time, you can determine whether your marketing campaigns are driving higher-value purchases. If your AOV increases after a marketing campaign, it may be an indication that the campaign was successful in attracting high-value customers.

How to increase AOV eCommerce

Increasing your AOV is crucial for growing your eCommerce business. Here are some tips to help you increase your AOV:

1. Offer product bundles

Product bundles are a great way to encourage customers to purchase more products. By offering a bundle of products at a discounted price, you can incentivize customers to spend more. For example, if you sell skincare products, you can offer a bundle of products for a complete skincare routine at a discounted price.

2. Implement upselling and cross-selling strategies

Upselling and cross-selling strategies are effective ways to encourage customers to purchase additional products. Upselling involves offering a higher-priced product to a customer who is already interested in a product. Cross-selling involves offering a complementary product to a customer who has already purchased a product.

3. Offer free shipping for orders over a certain amount

Offering free shipping for orders over a certain amount is a great way to incentivize customers to spend more. Customers may be more likely to purchase additional products if they know they will receive free shipping.

4. Implement a loyalty program

Implementing a loyalty program is a great way to reward customers for their repeat business and encourage them to spend more. By offering rewards for reaching certain spending thresholds, you can encourage customers to spend more to earn rewards.

5. Increase prices

Increasing prices may seem counterintuitive, but it can actually help increase your AOV. By increasing prices on your premium products, you can attract high-value customers who are willing to pay more for quality products.

In conclusion, AOV is a crucial metric for eCommerce store owners. By understanding what AOV is, how to calculate it, and why it is important, you can make informed decisions about your pricing strategy, marketing campaigns, and product offerings. By implementing the tips we have provided, you can increase your AOV and grow your eCommerce business.

Wrapping up

If you're running a eCommerce brand then AOV must be a metric you keep a good eye one. There are plenty of ways to implement solutions to increase your AOV, but it might require some technical skills.

By using analytics platforms, you'll in most cases find your average order value quite simply, but if you do not, the calculations to find the metric is quite easy.

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