What is Average Order Value (AOV)

Average Order Value (AOV) is a key metric used in eCommerce and retail to measure the average amount of money each customer spends per transaction. To calculate AOV, you divide the total revenue earned over a specific period by the number of orders received during that same period. This provides businesses with an understanding of how much customers are spending on average when they make a purchase.

In other words, AOV helps businesses gauge their customers’ purchasing habits and the effectiveness of their pricing strategies, marketing efforts, and product offerings. By monitoring and aiming to increase the AOV, companies can effectively boost their overall revenue without necessarily increasing the number of customers or transactions.

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