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Average Order Value


The success of online stores can be measured with the help of various metrics, and one powerful metric that helps you to understand where you stand is “Average Order Value.” It allows you to make more money without spending more money acquiring new customers without spending much more on acquiring them.

When it comes to increasing revenue, most marketers’ first instinct is to find more customers, but that isn’t the only way to grow. AOV is a great strategy that allows businesses to grow without spending a fortune on marketing and advertising. You can maximize the value of your customers instead of searching for new ones.

Hence businesses aiming to generate high ROI through their online business understand how they increase their Average value orders. In this blog, we will understand Average value order and some ways to increase it.

What is the Average Order Value?


Average order value(AOV) is an important metric that measures the average amount spent per transaction on an online store during a specific time. Businesses often use it to analyze customer behavior, find profitable sales channels and segments, and improve their sales. You can calculate AOV for a company as whole or specific product lines, channels, or regions. Undoubtedly, AOV is a sustainable way to grow your business.

Several factors influence the AOV in eCommerce. The first is the pricing strategy. A business that offers goods or services compared to others may have high prices and may see a high number of orders but a lower AOV. On the other hand, those offering premium products at a higher price may see fewer orders but higher AOV. The AOV also depends on the product’s selection. For example, businesses that offer a wide variety of products are likely to see a higher AOV, as customers are more likely to purchase multiple items in a single transaction.

Another important factor that largely affects the AOV of a business is the marketing strategy. Businesses that offer promotions, discounts, and other incentives can increase the AOV by encouraging customers to spend more in a single transaction. The marketing strategy can also hugely influence customers selecting a certain product as businesses may promote certain products they want to sell more.

One of the more factors that can impact AOV is customer behavior. Businesses can use customer data and analytics to understand the behavior of their customers and tailor their marketing strategies accordingly. For example, repeat customers are likely to spend more in a single transaction than new customers. You need to know your average order value to understand shopper behavior and how much they spend on your products. Pricing and marketing strategies can be tailored to enhance the value of each order once you understand what your customers are spending per order.

How To Calculate AOV(Average Order Value)?

To calculate AOV, you need Total Revenue and Total Orders. You need to simply divide the total revenue by the total orders for the period you want to calculate your AOV.

How to Calculate AVG Order Value

Benefits of Increasing Average Order Value

Average value order is an important metric to know how your business is doing. The higher your AOV is, the more revenue you will generate from the same audience. A good AOV can also increase without increasing marketing and sales. With the increase in average value order, you can notice a rise in revenue and profit along with a rise in sales. The more you earn per order, the more business you’ll be able to earn. You can use the same money to reinvest in your business.

Recent eCommerce data suggests that the average order value in eCommerce was around $129.23 in October 2022, a 16.89% increase from 2021’s average order size per customer.

An increase in average value order also indicates that you’re achieving cost-effective marketing returns effectiveness. You will see a positive change in average order value as your marketing spend becomes more profitable. You can sell more inventory if you follow your average order value strategy and plan correctly. You will also see a boost in the AOV of your products, thus selling more. Thus, it is essential to have a strategy that aims to maximize average order value.

10 Tips To Increasing your AOV

Understanding how important it is to increase your AOV, it’s time to know some of the important things to consider for increasing your AOV. Below are some of the important tips to increase your AOV:

Social Proofs

Social Proofs are one of the great ways to build trust and authority in the mind of your customers. It is a powerful tool that can increase your average order value. Social Proof can influence the purchase behavior of people to take action based on the behavior of others. When displaying customer reviews and ratings, you are giving potential customers a glimpse into the experiences of others who have already purchased from your store. Hence social proofs are an effective way to increase the value of your average orders.

Prioritizing Customer Service

One of the key factors in increasing average order value is providing excellent services to your customer. Every business should commit to providing the best quality services to its customers, which is the foremost sign that you value them as your top priority. A positive customer experience can lead to repeat business and increased average order value.

Include Upsell Options

Offering complementary products that go well with the product someone is buying can be a great way to increase average order value. When you include upselling options, you provide your customers with the opportunity to purchase more products that can result in enhancing their overall experience. A customer with a low-cost phone can be offered an upgrade to a high-end or mid-range phone, which increases your average order value. It is a great example of how upselling can increase your average order value.

Include Cross-Sell Options

Cross-selling is a technique in which a businessman offers related products to customers. It is one of the effective ways through which you can increase your average value order. A good example of cross-selling is when a customer buys a phone, and you can offer them a phone case, earphones, or charger. You can provide discounts on multiple items you’re selling as cross-sell options which can lead to a higher average order value.

Create A Loyalty Program

Loyalty Programs are a great way to increase the average order value of your business where you are rewarding your customers for their repeat business. These include offering special discounts, free shipping, or special promotions that encourage customers to continue purchasing from your store, which can lead to a higher average order value.

Bundle Products Together

Offering bundled products can be a great way to increase average order value. You can encourage your customers to purchase more when offering a bundle of complementary products at a discount. Hence, bundling products together can move your average value curve upward.

Offer Limited-Time Deals and Discounts

Providing limited-time deals and discounts can be an effective way to increase average order value. When you’re creating a sense of urgency, you are encouraging your customers to purchase now rather than delaying the purchase by incentivizing them with products at discounts. Hence you can use limited-period offers to increase your average value order.

Use Exit-Intent Popups

Using exit-intent popups is a great way to increase average order value. Through these popups, you can easily target your customers who are about to leave your site without making a purchase or even notifying them regarding any special ongoing schemes. It can be done by offering a special discount or an offer that encourages them to purchase while leaving.

Add A Free Shipping Threshold

Everyone likes when something is free! Offering free shipping to your customers is a great way to incentivize them to purchase more. Considering this concept, you should offer free shipping for orders over a certain amount. Offering free shipping over a specified amount can lead to a higher average value.

Show Savings With Bulk Orders

Displaying customers’ savings by purchasing in bulk can be an effective way to increase average order value. It is an effective way to show the savings to your customers when they’re adding products to their cart, as it encourages them to purchase more. Thus, showing savings with bulk orders is an effective way to increase average order value.

Frequently Asked Questions – FAQs

What Does AOV Tell You?

An average order value(AOV) indicates how much a customer spends every time they place an order on a website or mobile app. Dividing total revenue by the number of orders will give you your company’s average order value.

Why is AOV Important?

The Average value order (AOV) is important as it provides a benchmark for measuring the performance of an e-commerce business. A high AOV indicates that customers purchase more items per order, which can lead to higher profits.

How Can You Increase AOV?

There are several ways to increase AOV, including upselling and cross-selling, offering discounts or promotions, improving the overall customer experience, creating loyalty programs, using social proofs, creating loyalty programs, bundling products together, offering limited-period discounts, offering opportunities to save with bulk orders, etc.

What is a Good AOV?

A good AOV will depend on a business’s specific industry and target market. Generally, a higher AOV is better, as it indicates that customers are making larger purchases.

How Can You Track AOV?

AOV can be tracked using analytics tools, such as Google Analytics, or through manual calculations using sales data. It’s important to regularly track AOV to monitor the performance of a business and make informed decisions about future strategies.

Wrapping Up

Average Value Order is a critical metric in eCommerce. The AOV helps businesses understand the value they are generating from their customers and identify areas for improvement. By understanding the AOV, businesses can make informed decisions about pricing, product selection, and marketing strategies. By analyzing the AOV, businesses can ensure that they are making the most of their eCommerce operations and maximizing their revenue potential.

As discussed above, improving customer experience is also one of the key aspects of increasing AOV. Hence you need to provide the best user experience to your visitors. At Huptech Web, we have a team of highly skilled eCommerce and UX developers that can assist you in optimizing your online store for the best user experience!

If you want assistance with enhancing your website or online store to provide a better user experience to your visitors, consider reaching out to us.

Rishi Thakker

Rishi Thakker

Rishi Thakker is the founder and CEO of Huptech Web, an eCommerce development and marketing firm that helps companies attract visitors, convert leads, and close customers. His unique writing tips give startups and well-known brands a palpable action plan full of innovation unmatched.

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