What is Average Order Value
(AOV)?
Average Order Value tracks the average amount spent each time a customer places an order on your website. The
basic calculation used is total revenue generated by your website divided by the total number of orders
within a speicifc time period.
For example: £300,000 Revenue / 1,500 orders = an average order value of £200.
Why track Average Order Value?
AOV is a great metric to track as this can be used as a benchmark statistic to monitor your online sales and
performance.
It is a great insight into your customers purchasing behaviour and styles, which can then enable you to plan
Marketing campaigns and budgets more accurately.
Can the Average Order Value be
influenced?
Absolutely, below are just a few examples of eCommerce tactics to utilise, as with everything you should AB test these to see what is most effective for your products/customers/website.
Free delivery threshold and returns
This means customers will have to spend over a certain amount (for example £40) in order to reach free
delivery, so this can help increase your AOV.
Sales Promotions
You may reduce the pricing of your products, but customers may then buy more in one purchase from you which
could see your AOV stay the same, or you may see your customers buying the same quantity as they normally do
but an increased number of customers could be purchasing from you due to the lower price.
Upselling
This can mean customers purchase a slightly more expensive product than they originally intended which will
increase AOV, or you could try recommending products aligned to what
is in the customers basket as ‘extras’.
Bundles
You could try increasing AOV by offering customers a ‘bundle’. For example when selling a laptop, offering a
‘free’ mouse and keyboard for a slightly higher total price.
Bulk Buy
Allowing customers to buy more of a product for a better discount can help increase their spend with you. For
example offering ‘Buy one, get one half price’ is a common tactic on retail sites.
Additional considerations with
Average Order Value
Another thing to be aware of which can affect average order value is seasonality. For example customers may
buy more during Holiday periods, or wait for seasonal sales. These customers may also not be your typical
loyal customers so behaviours will be different during these times.
Other external factors such as latest trends or Marketing activity which is out of your control can also
impact customers views and buying habits and therefore affect your AOV.
Devices and Marketing channels should also be observed. For example, do your customers buy different products
on a Mobile device than on Desktop? Do customers spend more on a Desktop than on a Mobile? If customers
received a personalised email is this more a powerful tool for your business at getting customers to buy
online than, say, display advertising?
Webtrends Optimize and Average
Order Value
All scenarios and examples above are critical to understand how they impact your average order value and
therefore allow you to change your Marketing spend and pricing tactics accordingly.
All of the examples above should be tested and understood in order for you to continue to grow sales and
increase your AOV, something Webtrends Optimize can help you do strategically.
