Average order value—or AOV—is a critically important performance metric when it comes to eCommerce stores. The AOV meaning is simple: It measures the average amount of money that your customers spend in a single transaction with your eCommerce business. Let’s take a look at what you need to know to calculate AOV, improve AOV, and more.
eBook
BigCommerce vs. Shopify: Everything You Need to Know
What Is AOV?
As an eCommerce business owner, you may find yourself searching for things like, “average order value definition” or “what is AOV in eCommerce?” Thankfully, this vital metric is simple to calculate, even while providing unmatched insight into your store’s performance and customer behavior.
To calculate AOV, simply divide your total revenue by the total number of orders.
For example:
If your eCommerce store generated $1,000 in revenue from four orders, it would mean that the average customer spent $250 per order.
Why Is AOV Important in eCommerce?
Your site’s AOV directly impacts the revenue of your business. When you are able to boost the average amount of money that a customer spends on each order, you can reduce the need to acquire more customers and potentially cut shipping costs. This could help your company grow while minimizing your advertising expenses.
When you increase your eCommerce store’s AOV, you can raise your profit margins by enhancing customer retention rates, making it easier for your business to keep moving forward while you focus on what matters most—delivering excellent products and service to your customers. With more repeat buyers, you’ll also be able to hone in on customer behavior, allowing you to gain valuable insights that can help you create an even better experience for future shoppers.
Ready to boost your AOV? Groove can help; schedule a free eCommerce store audit today.
Strategies to Increase AOV
Check out these simple methods to improve AOV strategies and help your customers get everything they need before they check out:
- Upselling and cross-selling: As shoppers move through the purchase process, encourage them to buy complementary products. You should also offer a more expensive product, highlighting how it might be a better fit for their needs. Your customer should feel like they will have an enhanced experience if they put an additional or more expensive product in their online shopping cart.
- Free shipping thresholds: We’ve all seen this tactic; once your purchase hits a certain amount, you no longer have to pay for shipping. This can help convince customers to add a few more items to their digital carts. Take a look at this example of how a sports equipment brand managed to boost its AOV by 12 percent when it provided free shipping on all orders that cost more than $500.
- Product bundling: Offer your customers the option to add complementary products to their purchases at discounted prices. When shoppers see that they can get more for less, they’re likely to increase the average order value—even though they’re getting a deal.
- Loyalty programs: Reward customers for choosing your business by offering incentives to spend more. Check out this example of how Predator Nutrition, a UK-based health and wellness company, increased its AOV by 33 percent after introducing a customer loyalty program.
If you’re ready to try out some strategies to boost your AOV, we’re here to help. Our agency helped a major toy company raise its AOV significantly. Reach out to us today for a consultation.
Conversion Rate Optimization (CRO)
A website is ultimately a tool for driving conversions—whether they come in the form of sales, email subscriptions, or whatever other actions you are trying to encourage. By optimizing your website for conversions, you can get more value out of the traffic that you drive to it. Given that the average conversion rate for eCommerce websites is only about 3 percent, even a small boost to your site's rate can lead to a major increase in revenue.
An agency like Groove Commerce can help improve your site's conversion rate with eCommerce managed services like A/B testing, user behavior analysis, and site navigation optimization. By understanding how users interact with your site and making data-driven changes, eCommerce website management services can help you generate a lot more sales.
Ensuring Accessibility and Compliance
Accessibility and compliance are essential for ensuring that an eCommerce site is usable by everyone who visits it, including people with disabilities. Adhering to guidelines like 508 compliance for eCommerce websites can prevent legal issues and enhance the user experience for a wider audience. We have helped companies like Bonnie Jean improve accessibility while boosting revenue.
With eCommerce management services, you can perform an eCommerce website accessibility audit to determine your site's level of accessibility and compliance. The service provider will help you make any necessary adjustments to ensure your site meets all required standards after the eCommerce website accessibility audit is completed. This process involves things like creating a roadmap to identify accessibility gaps and setting goals for improvement. It also includes yearly accessibility statements that demonstrate your company's ongoing commitment to compliance and inclusivity.
Conclusion
eCommerce website management services can offer a lot of value to store owners, allowing them to optimize their websites for performance, conversions, and accessibility. By making website management a priority for your business, you can help ensure long-term growth and ongoing compliance.
At Groove Commerce, we specialize in eCommerce website management and optimization, helping online store owners make their websites more effective and reliable. To learn more about our industry-leading eCommerce managed services, be sure to contact us today!
