AOV is a metric that measures the total amount of money spent on purchases with an online store over a certain period of time. It is one of the most important metrics for online stores to be aware of because it drives key business decisions, such as advertising spend, store layout, and product pricing. Having this knowledge can help retailers succeed in the difficult competitive world of e-commerce. Definition: Average Order Value (AOV) is a metric that measures the average amount of money spent on every order. It’s a key metric for retailers to be aware of and can drive decisions such as advertising spend, store layout, and product pricing.
Your AOV is a measure of the average order size. It is derived using sales on each order, not sales per customer. One single customer may come back multiple times to make purchases. But each order would be counted as a separate instance of AOV. AOV is calculated based on the amount of revenue generated by each order, not by each customer. One person may make multiple purchases, but each time their order would be factored into AOV separately. There is an important opportunity to improve the positioning and marketing efforts for lower-margin items. By increasing your Average Order Value (AOV), your Return on Investment (ROI) and Return on Advertising Spend (ROAS) will be higher. The higher your AOV, the more you get back from every customer — and the more money you’ll get back from every dollar spent acquiring those customers.
A good way to improve this is using Odyssey. If you use Salesforce, multi-touch attribution should be something you just cannot neglect. Incrementality by Odyssey makes these insights easily accessible in Salesforce Datorama.
The more expensive items in your inventory may have higher margins, but it’s important to make sure your customers are aware of the more expensive items. One way you can do this is by improving marketing efforts for these products. By increasing your average order value (AOV), you’re getting more ROI and ROAS out of your marketing. The higher your AOV, the more you’re making back on every customer
One of the most important metrics for any business is the average order value (AOV). It should be monitored daily or weekly to understand what’s driving trends in your AOV. New campaigns, seasonality, and website changes are possible factors that may affect these fluctuations..