Average Order Value (AOV)

The Average Order Value (AOV) is a key metric in e-commerce and retail that measures the average amount spent by customers per order on a website or in a store. It is calculated by dividing the total revenue by the total number of orders over a given period. AOV is useful for understanding customer purchasing behavior and identifying opportunities to improve sales strategies. Increasing AOV can help boost revenue without necessarily increasing the number of customers.

Formula:
𝐴𝑂𝑉 = Total Revenue / Total Number of Orders

Example:
If an e-commerce site generated $10,000 in sales from 100 orders in one month, the AOV is $100.