Average order value (AOV) is a useful measure of how much shoppers are spending on your site.
It’s a useful KPI for tracking customer behaviour, to identify different customer segments according to spend, or perhaps to see which channels are most effective in terms of revenue.
Average order value is a simple calculation: the amount of revenue generated divided by the number of orders received. So, if you generated £40,000 in sales from 400 orders, the AOV would be £100.
Average order values do not necessarily correspond with sales volumes. Sometimes AOVs are lower in busy sales periods, with the volume of orders bringing down the average.
In 2019, the highest average order values were in January, while the biggest months in terms of sales volumes were November and December (see chart below).
Average order values vary by industry, channel and device.
The chart below shows AOV data from our 2020 Ecommerce Stats Report. As you’d expect, AOVs are highest in travel, since these are generally higher value purchases.
There’s a big drop off for travel on mobile though. As previous data has shown, travel shoppers are less likely to convert on mobile than other sectors.
The lower AOVs probably reflect the fact that people are more likely to book travel products such as hotels on mobile, which are generally lower ticket purchases than flights and holidays.
For retail and fashion, people are still spending more on desktop, but the gap between desktop and mobile is closer.
What Can Retailers do to Increase AOV?
There are a number of tactics to increase average order values, including:
- Free shipping thresholds. If people have to spend a certain amount for free shipping, or extras like next day delivery, they’re incentivised to add more to their carts.
- Promotions. Promotions can push customers towards a purchase and encourage them to add more products while offers are active.
- Product bundles. Grouping relevant products together in bundles, such as cameras with batteries or memory cards, can encourage people to buy more.
- Credit options. Buy now, pay later and more convenient payment options can encourage customers to add extra items to their baskets.
- Added extras. Extras such as product insurance, extended guarantees, or gift-wrapping can help to drive up order values.
For more data on AOV and sales trends, along with a wealth of other data on ecommerce, download our 2020 Ecommerce Stats Report.
Graham Charlton is Editor in Chief at SaleCycle. He's been covering ecommerce and digital marketing for more than a decade, having previously written reports and articles for Econsultancy. ClickZ, Search Engine Watch and more.