What is Average Order Value (AOV)?

Average order value is considered a central metric in the eCommerce industry to track the average amount of money that a customer spent per order on a mobile application or website. 

Typically, the average order value will provide you important insights into customers’ behaviors. A company should carefully monitor its AOV before making crucial business decisions regarding marketing and product prices. We all know that eCommerce is an extremely dynamic and competitive sector, making it essential for all businesses to analyze their AOV on a regular basis in order to maximize the average order value. In this post, you’ll learn key points about AOV and ways to increase it to boost your revenue growth.

The formula of Average Order Value 

Average order value will measure how much money your customers spend on an order every time they go to your online store. Your store’s AOV is estimated by dividing the total revenue by the number of orders placed. This formula is very simple to calculate and it doesn’t involve much marketing cost.

The formula of Average order value
The formula of Average order value

Why should you know about the Average Order Value?

In this highly competitive market today, it’s every company’s goal to have new customers and retain existing ones. To do that, your business needs a proper amount of investment in both marketing and advertising. While it takes much time and effort to boost traffic by doing research and applying complex marketing strategies, increasing your average order value would be a more efficient and relatively inexpensive way to go for. 

Improving Average order value is a great way to strengthen your eCommerce business against traffic fluctuations. For example, your Magento store may experience less traffic overall but actually, your business would be fine thanks to higher revenues by the AOV increase. 

Average order value Statistics

Due to the Covid-19 pandemic, it seems that a decrease has been seen across all industries. With the world’s economy falling into the depths of the recession, most people lost their jobs, and therefore, the situation of the market has not been in good form since the beginning of 2020.

Average order value during the Covid-19 pandemic
Average order value during the Covid-19 pandemic
Average order value statistics
Global average order value by category (US dollars)

As can be seen from the graphs, the average order value has declined over most categories. This has happened because people are not willing to spend more money but another factor can also be the growing numbers of promotions offered during the pandemic. The aim of these promotions is to minimize the negative effects of the global crisis on the whole economy. Those attractive promotions did help companies secure a handful of sales so that businesses managed to survive in 2020. However, promotions definitely mean a low level of Average Order Value, and prolonging this situation is never a sustainable option.

That’s why you should always keep track of the average order value of your business since it is like a thermometer to tell you about the health of your eCommerce business, whether it’s doing well or going down. As the average order value tells so many valuable insights into your business's current situation, it is certainly one of the most important metrics for all companies to stay up to date on.

Average order value by industry

One of the most useful references points to measure your business performance is industry-specific criteria.

Average order value by industry
Average order value by industry in GBP

While the “Baby and child” category is at the top at GBP 189.35%, the "Health and Wellbeing" section accounts for only 37.96% at the bottom of the chart. The second and third positions belong to Cars & Motorcycling and Fashion Clothing & Accessories, at 130.93 and 117.51 respectively in GBP. 

Average order value by source

When average order values are separated by source/channel, they allow retailers to see what kind of traffic drives the highest revenue to the store. After that, merchants can either allocate further resources to those most productive channels or formulate more accurate KPIs and specific goals for each channel.

Average order value by source in US dollars
Average order value by sources in US dollars

From the chart, direct navigation contributes the most to the average order value at $107.37, followed by email at $99.9

Average order value by platform and device

Regarding device-specific factors, desktop leads the way at $199.12 from Windows computers, with Macintosh coming a close second.

Average order value by platform in US dollars
Average order value by platform in US dollars

One of the biggest challenges that eCommerce retailers have to face is growing online purchases from mobile phones. Although the sales of the mobile commerce industry make up nearly half of the entire eCommerce sales, AOV still remains relatively low. It’s challenging for merchants to boost metrics such as conversion rates and average order value on mobile phones to reach the traditional desktop levels.

Average order value by device
Average order value by device (in US dollars)

How to increase the Average order value for your Magento 2 store?

1. Bundle similar products together

Selling multiple products together in a bundle is a common and effective business practice. Product bundling makes it convenient and easy for shoppers to buy many items at the same time. For example, a primary product like a computer often comes with accessories like headphones, keyboards, and at least a mouse.

A lot of methods can be applied to create bundles in the Magento 2 store. Another bright example is that in the fashion industry, many websites allow customers to purchase the whole outfit with a single click on “Shop the look” or “ Shoppable Image Gallery ''. Grouping up similar products can not only optimize the average order value but also help to personalize customers’ shopping experience. We are at Magenest recommend that there should be at least 3 types of grouping up similar products for each website to maximize efficiency.

2. Customer Rewards

It’s a good idea to set up a customer loyalty program to encourage them to make more future purchases and keep coming back to your websites. Both small and big eCommerce companies use this method to boost their AOV and sales.

Customer Loyalty Program
Customer Loyalty Program

There are many different actions that customers can do to earn rewards: writing reviews, making repeated purchases, sharing the website on social networks, etc .... Of course, the most rewarded action from customers should be spending real money on your websites. With an effective reward system, you can build a special bond with your customers, enhance their loyalty and promote your brand as well.

3. Free shipping policy to motivate purchases

What’s good about shopping online is that it gives people more convenience when it comes to saving time and travel costs. However, freight costs sometimes discourage customers from ordering products online. This makes a free shipping policy more attractive to shoppers because it can be the deciding factor for their purchases. 

Although it’s almost impossible to provide free shipping for all of your customers since freight costs can be extremely high sometimes (even higher than the value of the purchased products in some extreme cases), there are some solutions you can consider to increase average order value by various free shipping policies:

  • Free shipping threshold: provide customers with free freight costs if the order excesses a certain minimum value.
  • Selected product shipping: Another effective method to promote bundle promotion. Customers will be given opportunities of buying a bundle to enjoy free shipping instead of choosing individual products and having to pay for the shipping fees. 
  • Limited-time free shipping: your company can launch promotion campaigns such as seasonal promotion and provide free shipping to encourage customer’s purchases. This method works best when you want to clear out your inventory, but you should combine it with small direct discounts so that the results will be the best.

Apart from free shipping, it’s good to know that free gifts and discounts are always good techniques to try in the sales business. As everyone loves free gifts, your store can create a free gift campaign similar to free shipping based on the total shopping cart, bundles, and so on. For example, leaving a message for the customer like “Buy more than 30 dollars to get a free gift” before they check out can certainly boost up your sales by at least 5-10%.

4. Up-selling and Cross-selling

Use up-selling and cross-selling to add product suggestions to your page. These techniques are a crucial part to develop eCommerce sites and maximize average order value.

Cross-selling and Up-selling
Cross-selling and Up-selling

In up-selling, similar but more high-priced products are recommended to the customer, compared to the one they are currently considering. The owner store can convince shoppers to buy better products at higher prices as these kinds of purchases actually benefit the customers. For example, between a 100-gram pack of potato chips for $5 and a 200-gram pack of potato chips for $8, both merchants and customers will be happier with the option of a 200-gram pack of potato chips.

In cross-selling, any items relevant to the one being viewed by the customers would be recommended. The purpose of cross-selling is to suggest all additional items related to customers’ chosen products which can encourage more buying and boost the AOV. 

5. Personalized options for customers

Customers would purchase more if the shopping experience is made easy and relevant to their preferences. The more relevant options you can offer to them, the more likely they would make purchases. This can be done by simply personalizing a welcome message for your visitors or introducing personalized deals along with customer-specific landing pages. Usually, customers do not know exactly what they are looking for and may need some help with their shopping. This would be the perfect time to recommend items for them by using the customer data you collected from:

  • Search queries: make recommendations based on users’ search words.
  • Geographic locations: give relevant recommendations based on customers’ regions, weather, and local features.
  • Customer segments: Suggest items by using the customer purchase history with similar demographics.

Read more: Best ways to Increase Average Order Value


As Average order value is an essential metric to your revenue growth, it’s vital to broaden fundamental knowledge about it as well as apply increasing AOV methods to rocket your business sales. We hope that you find this today’s post about average order value helpful to your Magento store. Learn more about us here with other excellent Magento extensions to support your website. Magenest would be very happy to provide the best solutions to grow your eCommerce store.