What is Average Order Value
Average order value is a calculation for the amount spent each time an order has been placed within a given period of time.
Why is Average Order Value Important
Average order value is important for tracking revenue performance. An increase or decrease in average order value can have significant impact on revenue performance.
How to Calculate Average Order Value
Average order value is calculated by dividing the total value of transactions within a set time period, by the number of orders placed in the same time period
Common Use Cases
- Measuring the impact of upsell/cross‑sell tactics
- Evaluating promotional effectiveness
- Comparing performance across channels
- Understanding customer behaviour by segment
- Supporting pricing and merchandising strategy
Related Terms
- ASP (Average Selling Price)
- GMV (Gross Merchandise Value)
- Conversion rate
- Customer lifetime value (CLV)
- Basket size
When you look at Average Order Value through a systems lens, it stops being a simple revenue metric and becomes a reflection of customer experience. Average Order Value tells a story about intent, value perception, and the subtle nudges that shape a shopping journey. It’s influenced by everything from product mix to UX to the emotional context of a purchase. When teams treat Average Order Value as a signal, not a scoreboard, they start asking better questions.
