AOV (Average Order Value)

What is AOV (Average Order Value)?

AOV measures the average revenue per order. It helps you understand basket size and how pricing, promotions, and product mix shape revenue quality.

Formulas / Metrics (core types):

• AOV: Revenue ÷ Orders (define clearly if Revenue is net of discounts/returns/tax/shipping).
• Median Order Value: Robust to outliers in heavy-tailed baskets.
• Trimmed Mean AOV: Mean excluding extremes (e.g., P5–P95) for stability.
• AOV (net): (Gross revenue − discounts − returns − tax − shipping) ÷ Orders.
• Items per Order (IPO): Units ÷ Orders (a practical driver of AOV).
• RPV link: Revenue per Visitor = CR × AOV (watch both, not just AOV).

Key idea: AOV rises via basket build (bundles, cross-sell, thresholds) and price/mix—but must be managed with margin and CR to improve RPV, not just optics.

Why it matters?

• More revenue per purchase: Improves payback and supports higher CAC.
• Margin leverage: Smart bundles/thresholds lift profit per order—not only topline.
• Better RPV: Balanced AOV + CR movements raise revenue per visitor and stabilize ROAS.

KPIQ Perspective

• User view: “CR looks okay, but revenue feels low—how do I increase basket size without hurting conversion?”
• Technical view: KPIQ benchmarks AOV by channel, device, and price band (and, when available, by product category); decomposes AOV into price × items per order; surfaces opportunities (free-shipping threshold tuning, bundle/quantity-break attach gaps, cross-sell performance), runs simple what-ifs (e.g., raise threshold by €X or +Y pp bundle attach), and flags data-quality gaps (missing discount/return fields, inconsistent net vs gross definitions).

Actionable Insights

• ✅ Set a free-shipping threshold ~10–20% above current AOV and test; show progress bars in cart/mini-cart.
• ✅ Offer bundles and quantity breaks (2-pack/3-pack) with clear value messaging.
• ✅ Add contextual cross-sells (same collection/compatibility) on PDP, cart, and checkout.
• ✅ Use tiered cart goals (e.g., €39 → €49 → €69) and anchor pricing to nudge larger baskets.
• ✅ For higher tickets, enable express wallets / BNPL to reduce friction at bigger totals.
• ✅ Monitor Profit per Visitor and returns—not just AOV. Avoid discounts that raise AOV but crush margin or CR.

Practical Example

Baseline (last 30 days): 1,200 orders · Revenue €50,400 → AOV = €42.00

What-if: Tune free-shipping threshold

Set threshold at €49 (~+17% vs AOV). Suppose 60% of orders were below €49 and 25% of them now upsell to €49.

• Orders below threshold: 0.60 × 1,200 = 720
• Orders upsold: 25% × 720 = 180
• Assume their original average was €38 → uplift per upsold order = €49 − €38 = €11
• Incremental revenue = 180 × €11 = €1,980

New revenue ≈ €52,380 → New AOV ≈ €52,380 ÷ 1,200 = €43.65 (+€1.65, +3.9%). At 55% gross margin, profit +€1,089 (ex-shipping cost). Track CR to confirm RPV improves.