'Average Order Value' (AOV) is a key metric in e-commerce analytics that measures the average amount spent each time a customer places an order. It is calculated by dividing total revenue by the number of orders.
Tracking AOV helps e-commerce businesses understand customer purchasing behavior and evaluate the effectiveness of pricing strategies and marketing efforts. Increasing the AOV is a significant goal for many online retailers, as it directly impacts the revenue and profitability of the business.
By analyzing AOV, businesses can identify opportunities to upsell or cross-sell products, implement pricing strategies that drive higher-value transactions, and tailor marketing campaigns to target customer segments with the potential for increased order values.