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Average Order Value or AOV is a way to measure how much money customers spend on an average when they place an order at an online store.

What is aov in eCommerce?

As you already know aov meaning is the Average order value. It is one of the most important metrics for e-commerce business decisions such as advertising spending, expenses, store layout, and product pricing.

When one customer comes to visit your website and purchases something but in the same order, they include multiple products to buy then your Average Order Value automatically increases.

Average order value

Essentially, the AOV may provide some insights regarding customer behavior while purchasing. For example, a lower AOV indicates that the customers prefer to make small purchases with each order on your website.

What is C AOV and F in e-commerce?

These are the 3 ways to grow your business that is Increase the average order value (AOV), Increase the frequency of purchase (F) and Increase the total number of customers (C).

How AOV is calculated?

To calculate your business AOV, the simple aov formula is that AOV is equal to revenue divided by the number of orders.

Average order value(AOV) = Total revenue / Number of orders

With this aov formula, you can get an idea about your business. AOV is determined using sales per order, not sales per customer means one customer may come back multiple times to make a purchase but each order AOV calculate separately.

This indicates two trends of customer behavior in the store:

  1. Customers are not buying multiple items from the store.
  2. The particular products represent the majority of sales.

Why AOV is Important?

It helps to evaluate your overall online marketing efforts and pricing strategy for each product. AOV also helps in the long-term value of individual customers.

If you get customers' behavior towards the business then you can easily set goals and strategies to increase sales and profit.

How can I increase my AOV in eCommerce?

  1. Offer free shipping
  2. Charm Pricing control between products
  3. Good Upselling and cross-selling
  4. Bundling or bulk
  5. Set limited-time offers
  6. Discounts on products
  7. Coupons
  8. Product recommendations
  9. Live chat support
  10. Return policy

Frequently asked questions