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What Is Average Order Value

Average Order Value (AOV) is the average monetary value of each order placed on an online store over a specific period.

It's a key indicator of how much, on average, customers are spending in a single transaction, reflecting their purchasing habits and the overall financial health of your business.

A higher average order value signifies that customers are either purchasing a greater quantity of items or opting for more expensive products, directly contributing to increased revenue and enhanced profitability for your online store. 

Compared to marketing strategies focused on acquiring new customers, AOV-focused strategies are usually a lower cost path to driving revenue growth. 

AOV is also a vital part of Customer Lifetime Value (LTV), which is the total revenue a customer is expected to generate over their entire relationship with a brand.

A higher average order value contributes to a higher lifetime value—as a result, the importance of AOV for your store’s long term success can not be understated.  

Learn more about how you can improve your average order value in our full guide.

What Is The Average Order Value Formula 

The fundamental formula for calculating Average Order Value (AOV) is:

Average Order Value = Total Revenue / Number of Orders. 

"Total Revenue" is the aggregate income generated from all sales within a defined period.

"Number of Orders" refers to the total count of completed transactions during that same timeframe.   

For example, imagine an ecommerce store with total revenue of $10,000 from 200 orders in the month of October.

Applying the AOV formula, the calculation would be: $10,000 / 200 = $50.

This indicates that, on average, each order placed in October had a value of $50.

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How To Calculate Average Order Value

To effectively calculate your ecommerce average order value, follow these practical steps:

Define the Time Period: Begin by selecting the specific timeframe you wish to analyze, such as a day, week, month, or quarter.

Maintaining consistency in the chosen time period is crucial for enabling meaningful comparisons of AOV over time.   

Determine Total Revenue: Next, gather the total revenue figure generated by your ecommerce store during the selected period.

This should cover all sales revenue, excluding sales taxes and refunds issued.   

Count the Total Number of Orders: Count the total number of completed customer orders that were placed within the same defined timeframe.   

Apply the Formula: Finally, divide the total revenue (from Step 2) by the total number of orders (from Step 3) to arrive at your Average Order Value.  

Many ecommerce analytics tools, such as Replo Analytics and Shopify Analytics, come with built-in dashboards that automatically calculate and display AOV for your stores.

To see how your AOV compares against the most up-to-date benchmarked industry averages, refer to our calculator above.

By analyzing average order value across different timeframes and customer segments, stores can reveal deeper insights about customer behavior and the effectiveness of different marketing strategies.   

For example, calculating average order value for various periods (such as comparing monthly AOV over the past year) can help identify seasonal trends in customer spending and the impact of specific marketing campaigns. 

Plus, segmenting average order value by factors such as the source of website traffic (organic search, paid advertising, social media, email marketing) can reveal which channels attract customers with higher average order values. 

Compare the AOV of new customers versus returning customers to study how repeat customers show different spending patterns due to their familiarity and trust in the brand. 

Last but not least, analyzing average order value by product category can help identify which product lines contribute most significantly to revenue per order; examining AOV based on the type of device used for purchase (desktop, mobile, tablet) can highlight potential differences in spending behavior across platforms.

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What Is A Good Average Order Value

There is no one-size-fits-all answer to what makes a “good” average order value, as the number varies considerably across different industries in ecommerce. 

Factors such as the price point of products, the typical purchase frequency, and the characteristics of the target audience all contribute to these industry-specific variations. 

Industry-specific differences in AOV are influenced by several key factors.

The type and price of the products sold are primary determinants; businesses dealing in high-value goods naturally tend to have higher average order values.

On the flip side, it’s important to note that industries with products that are frequently replenished or purchased on impulse may see lower average order values but higher transaction volumes.

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What Is The Average Order Value By Industry

According to Dynamic Yield by Mastercard, key trends between January 2025 to February 2025 include a 11% spike for the Luxury & Jewelry industry; this sector had the highest AOV at  $356 in February 2025. 

In contrast, Pet Care & Veterinary Services fell by 11% in average order value—from $75 in January to $67 in February.

Over the past 12 months, Luxury & Jewelry has accounted for the average order values, at $327; Beauty & Personal Care has seen the lowest, at $71.

In terms of device type, desktop has been responsible for the highest average order values of $187, with mobile representing $173, and $137 from tablet.

Learn more about how you can improve your average order value in our full guide.
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Why Is Average Order Value Important 

By increasing the average amount that customers spend in each transaction, businesses can achieve higher overall revenue without needing to attract a larger volume of new customers. 

More spending per order can also lead to improved profit margins by effectively distributing fixed operational costs, such as shipping and transaction fees, across a larger revenue base. 

For many stores, strategies to boost AOV can be a more efficient and cost-effective approach to revenue growth, instead of relying solely on acquiring new customers or increasing conversion rates.   

It can also give you many insights into the spending habits of your customer base.

By examining which products are frequently purchased together, you can identify areas for product bundling and cross-selling.

Understanding the average price points at which customers are willing to make purchases can inform pricing strategies and the design of promotional offers. 

For example, many brands have a minimum order value requirement to qualify for free shipping; this threshold is usually set slightly above their average order value. This is a powerful incentive for customers to add more items to their cart to reach the free shipping threshold, thus increasing the overall order value. 

Offering volume discounts or creating product bundles at attractive price points also serve to encourage larger purchases, directly contributing to a higher AOV. 

Finally, optimizing average order value enhances Customer Lifetime Value (LTV).

Customers who consistently place orders with a higher average value naturally contribute more to their overall lifetime value for the business. 

Plus, many of the strategies employed to increase average order value, such as upselling, bundling, or cross-selling relevant products, can also lead to greater customer engagement and foster stronger brand loyalty, boosting LTV in the long run. 

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Average Order Value And Conversion Rate: Boosting Total Revenue

AOV and conversion rate together drive the overall revenue of an ecommerce business. 

The formula for total revenue: 

Revenue = Traffic x Conversion Rate x AOV

The formula for revenue per visitor: 

Revenue Per Visitor (RPV) = Conversion Rate x AOV

Generally, conversion rate and average order value are negatively correlated to each other. In other words, the higher the AOV, the lower the conversion rate.  

For instance, adding a significantly higher minimum order value for free shipping can potentially increase the average order value of completed orders, but it might also discourage customers whose intended purchase falls below that threshold.

This drives down the average conversion rate for your store. 

Conversely, prioritizing maximum conversion rates can boost order volume, but if the average value of those orders is low, your overall revenue can still be suboptimal. 

As a result, you want to balance increasing conversion rate and AOV to reach maximum revenue while resolving any potential bottlenecks along your customer journey. 

For example, if you have a high conversion rate but a low average order value you can try encouraging shoppers to add more items to their cart; you can try adding a product recommendation section on your landing page or bundling offers in your product buy box. 

If you have a high AOV but a low conversion rate, this could indicate that customers who do make a purchase spend a significant amount, but there may be points in the conversion funnel disincentivizing more shoppers from converting.

Potential factors can include lack of product guarantees, insufficient social proof, unclear value propositions in the headline to differentiate your brand, or low quality product imagery—fixing any of these elements on your Shopify landing pages or product pages can do wonders for boosting conversion rates.

A/B testing online store pages allows brands to specifically and quantitatively measure the impact of new or edited landing page elements on your AOV and conversion rate, thereby directly impacting your revenue per customer.

For example, VaynerCommerce helped POSSIBLE foods boost revenue per visitor by 10.3% in 30 days by A/B testing the complementary ad to landing page funnels for their signature snack bars. 

They tested new headlines, different lifestyle images, and even a countdown discount banner; the corresponding advertisement matched the landing page’s design to create brand continuity. 

Their landing page V2 outperformed V1 significantly, with a 9.91% increase in conversion rate (CVR) and a 10.25% boost in revenue per visitor.

By following A/B testing best practices and testing iteratively over time, you can balance increasing AOV and conversion rate to grow total revenue for your store. 

Check out our list of the top 9 experiments you can start implementing right now in your Shopify landing pages to bump your average order value.

Check out our Ecommerce Toolbox for more free ecommerce and marketing resources, including calculators and industry benchmarking tools for key business metrics, Shopify theme detectors, and Schema markup generators!