Running an eCommerce business can feel like diving into a sea of numbers. Especially for new Shopify merchants, every dashboard is packed with metrics: conversion rates, bounce rates, customer acquisition costs, ROAS, LTV, and more. Among this flood of information, one metric stands out for its immediate and long-term impact on your bottom line: AOV (Average Order Value).
ECOMMERCE TIPS
What is AOV and how to master it for your Shopify store?
by Tide
Understanding “what is AOV?” not only helps you measure how much your customers are spending per transaction but also gives you a direct lever to increase revenue without needing to grow traffic or customer volume.
This article delves deeply into AOV, explaining its significance, how to calculate it, and most importantly, how to use it to grow your eCommerce business.
By the end, you will walk away with:
A clear understanding of “what is AOV?”
Real-world methods to track and calculate AOV (especially on Shopify)
Proven strategies to increase your AOV and revenue
The article is here to help you cut through the noise in case you get lost in data. Let’s get started!
1. What is AOV: The definition and why AOV is important?
AOV, standing for Average Order Value, is a key eCommerce metric that represents the average amount of money a customer spends per order in your store.
For example, if your store has a total revenue of $2,000 split between 100 orders, your average order value is $20. This means that, on average, a customer spends $20 each time they purchase from your store.
Unlike "vanity metrics" that might look good but do not directly translate to business growth, AOV is one of the most critical ecommerce metrics due to:
Direct impact on revenue and profitability: A higher AOV means more revenue generated from each customer transaction, directly contributing to your bottom line. For example, if you typically have 100 orders at an AOV of $50, your revenue is $5,000. If you increase your AOV to $70, those same 100 orders now generate $7,000 in revenue.
CAC and ROAS balance: A higher AOV can help offset your Customer Acquisition Cost (CAC). For example, if you spend $10 to acquire a customer and your AOV is $20, you have a 100% return; if your AOV is $40, you have a 300% return on that same acquisition cost. This directly impacts your Return On Ad Spend (ROAS).
Knowing what is AOV may help you boost revenue and make smarter sales decisions.
Business growth strategy: By increasing the value of each order, you can achieve substantial revenue growth without necessarily needing to acquire more customers.
Cash flow management: A higher AOV means more capital flowing into your business with each sale, positively impacting your cash flow and allowing for better investment in inventory, marketing, and other essential operations.
Inventory planning and purchasing: Understanding what is AOV can inform better inventory planning.
Customer service and fulfillment costs: Optimizing AOV can improve efficiency. When customers buy more per order, your cost to process and ship each item may decrease, streamlining customer service and fulfillment operations.
It's common to misunderstand what is AOV. For example, some might mistakenly believe that a high AOV automatically means high profitability without considering factors like the individual profit margins on the products sold within those orders.
Another misconception is that AOV is only relevant for large businesses, when in reality, it's a crucial metric for Shopify merchants of all sizes. Lastly, some might think AOV only relates to initial purchases, ignoring its potential for repeat customer engagement and overall customer lifetime value.
2. How to calculate AOV correctly for your Shopify store?
What is the AOV formula? It is: AOV = Total revenue / Number of orders
Let's walk through some real-world examples:
Example 1 - Daily AOV Imagine your Shopify store generated $1,500 in sales yesterday from 30 orders. AOV = $1,500 / 30 = $50.
Example 2 - Weekly AOV Over the past week, your store brought in $10,000 from 200 orders. AOV = $10,000 / 200 = $50.
The calculation process for Average Order Value (AOV).
You can easily track your AOV within the Shopify Admin dashboard in the following steps:
Navigate to Analytics > Reports
Search Average order value on the search bar, then choose it
Choose your preferred time grouping (hour, day, week, month, quarter, year)
Set your date range and compare with previous periods if needed
View AOV Shopify trends and analyze the data
3. What is AOV relationship with other key metrics?
What is AOV? While knowing it matters, it's only one piece of the bigger ecommerce puzzle. Understanding its relationship with other eCommerce metrics helps you create a holistic optimization strategy:
AOV vs. Customer Lifetime Value (LTV): AOV focuses on the value of a single order, while Customer Lifetime Value (LTV) estimates the total revenue a customer will generate over their entire relationship with your business. You might prioritize AOV when you're looking for immediate revenue boosts, but focus on LTV for long-term customer relationship building and sustained growth.
AOV vs. Customer Acquisition Cost (CAC): As mentioned, AOV helps balance your CAC. If your AOV is low and your CAC is high, you're likely losing money on each customer.
A higher AOV can balance out your Customer Acquisition Cost (CAC) and improve profitability.
AOV vs. Conversion Rate: Conversion rate is the percentage of visitors who complete a purchase, while what is AOV, the value of those purchases. Sometimes, strategies to increase AOV (like higher free shipping thresholds) might slightly decrease conversion rate, so finding the optimal balance is crucial.
AOV vs. Revenue Per Visitor: Revenue per visitor (RPV) takes into account both your conversion rate and your AOV. It's calculated by multiplying your conversion rate by your AOV. RPV provides a more comprehensive understanding of your full sales funnel performance.
Here is a short comparison table AOV vs. other key metrics:
Metric comparison | What it measures | When to focus | Relationship to AOV |
|---|---|---|---|
AOV vs. LTV | - AOV: Value per order - LTV: Total value per customer over time | - AOV: For short-term revenue goals - LTV: For long-term customer strategy | High AOV contributes to higher LTV but does not guarantee it. |
AOV vs. CAC | - CAC: Cost to acquire a customer - AOV: Value received per order | Focus on AOV to increase ROI on acquisition spend | Increasing AOV helps balance or offset high CAC. |
AOV vs Conversion Rate | Conversion Rate: % of visitors who purchase | Optimize both to ensure healthy traffic monetization | High AOV with low conversion may hurt total sales. |
AOV vs RPV (Revenue per Visitor) | RPV = AOV × Conversion Rate | Use RPV for a full-funnel performance view | AOV is a component of RPV; both should be tracked together. |
Note: It's important to recognize when AOV might be misleading. For instance, solely focusing on a high AOV without considering the underlying profit margins of the products sold can be detrimental.
With a solid understanding of how AOV relates to other metrics, you're probably wondering: "How does my AOV stack up against the competition?"
4. AOV benchmarks and industry standards: What is AOV that seems good?
Besides knowing what is AOV, it is crucial to update the latest AOV benchmarks. AOV benchmarks help you assess your store’s performance, set realistic goals, and see how you stack up against industry standards or similar businesses in your niche.
4.1 AOV by industries
AOV can vary significantly across different industries. For example, a store selling luxury jewelry will likely have a much higher AOV than a store selling everyday consumables. Researching specific industry benchmarks for your niche is highly recommended.
In the following section, we will show you the newest AOV for eCommerce by Industries in 5 months (Jan 2025 - May 2025) according to Dynamic Yield by Mastercard:
Pet Care & Veterinary Services: This AOV fluctuated between $69 (Jan 2025) and $76 (May 2025).
Beauty and Personal Care: AOV varied between $65 (Jan 2025) and $76 (May 2025).
Consumer Goods: AOV ranged from $210 (Jan 2025) to $372 (May 2025).
Luxury and Jewelry: The AOV from Luxury & Jewelry varied between $320 (Jan 2025) and $386 (May 2025).
Home and Furniture: AOV ranged from $189 (Jan 2025) to $267 (May 2025).
Fashion, Accessories & Apparel: AOV is $228 (Jan 2025) and down to $150 (May 2025)
The AOV from Pet Care & Veterinary Service.
4.2 AOV by regions
Purchasing power and consumer behavior vary by region, leading to differences in AOV. Example for what is AOV by region, AOV in the US might differ from AOV in European or Asia-Pacific markets.
Americas:
The AOV in the US.
Europe, the Middle East, and Africa (EMEA):
The AOV in EMEA.
Asian Pacific (APAC):
The Americas has witnessed the largest average order values overall ($273), followed by APAC ($131), and then EMEA ($122).
4.3 Shopify store AOV benchmarks vs other platforms
While precise numbers fluctuate, knowing what is AOV by Shopify stores helps you generally see competitive AOV benchmarks by comparing your AOV to similar stores on other platforms like BigCommerce, Magento, or Amazon.
According to the newest Amazon statistics, AOV on Amazon is typically $40–$55 on normal days, slightly higher on big sale events.
In 2024, BigCommerce merchants saw an average order value (AOV) of $137, with a strong conversion rate optimization of 2.5%, according to Coalition Technologies.
Choose the right platform to optimize your AOV.
According to data from IRP Commerce and industry reports, Magento merchants reported an average order value ranging from $160 to $180, depending on the vertical and customization level.
Shopify stores typically see an AOV around $85-$92, with significant variation across niches. More than US$192 would be among the top 20% of Shopify stores, and more than US$311 would put you in the top 10%.
In conclusion, Amazon leads volume with modest AOVs; BigCommerce/Magento target high-value. Shopify offers competitive, scalable AOVs in the middle. Use these benchmarks not just for comparison, but as a strategic lens to tailor your pricing, bundling, and upselling efforts for maximum impact.
4.4 What is AOV benchmarks by business size
A Yotpo study of 3,000 stores analyzed the AOV of online purchases for fashion brands in 2023.
The data was taken from an analysis of ~12M purchases and ~$838M in purchases made from 185 countries worldwide.
It found that smaller stores tend to have higher AOVs compared to their larger counterparts.
Although exact figures for small versus large stores weren’t specified, the analysis suggests that smaller operations command a higher per-order spend, even if larger stores generate more orders.
Smaller stores seem to have higher AOVs than their larger counterparts do.
4.5 Seasonal AOV variations with monthly breakdown
AOV often fluctuates throughout the year due to seasonal sales, holidays, and specific shopping events.
Example for what is AOV with seasonal variations, during Black Friday Cyber Monday (BFCM), you'll likely see a significant spike in AOV as customers take advantage of promotions and bigger purchases.
It was shown clearly in the November AOV graph above from almost all industries, such as Pet Care & Veterinary Services, Beauty and Personal Care, Consumer Goods, etc.
5. Common mistakes in AOV optimization
While improving AOV is a worthy goal, several common pitfalls can derail your efforts or even harm your business if not approached carefully.
Focusing only on what is AOV enhancement without considering profit margins: It might boost the AOV but erode profit margins, leading to less actual profit.
Ignoring customer segments when analyzing AOV: Analyzing across different customer segments (e.g., new vs. returning, high-spenders vs. occasional buyers) can reveal valuable insights and allow for more targeted optimization strategies.
There are 6 common pitfalls to avoid when learning what is AOV and how to improve it.
Setting unrealistic AOV improvement goals: Setting overly aggressive AOV goals without a clear strategy or understanding of your customer base can lead to frustration and wasted effort.
Not tracking AOV by traffic source: Different traffic sources (organic search, paid ads, social media) might bring in customers with varying purchase behavior analysis and AOV..
Seasonal AOV fluctuation misinterpretation: A sharp rise in AOV during a holiday sale might be normal, but misinterpreting it as sustainable growth can lead to poor planning.
Over-optimizing AOV at the expense of conversion rate: Sometimes, strategies aimed at increasing AOV (like a very high free shipping threshold) can deter some customers, leading to a drop in your conversion rate.
6. How to improve AOV: 3 strategies for order value optimization
We have covered the basics of AOV, including: what is AOV in eCommerce; AOV calculation formula; AOV meaning in eCommerce, and why is AOV important for your sales performance tracking.
Let’s have a look at 3 practical strategies to improve it: Basic strategies, Advanced strategies, and Shopify-specific strategy (only for big brands).
6.1 Basic AOV optimization strategies
Upselling and Cross-selling: You encourage customers to spend more per transaction through:
Upselling: Offer a more expensive, upgraded version of a product a customer is considering.
Cross-selling: Recommend complementary products to what a customer has already added to their cart. If they're buying a camera, suggest a camera bag, an extra lens, or a tripod.
Product bundling with profit margin calculations: Create attractive bundles where customers get a slight discount for purchasing multiple related items together. For example, “coffee lover’s bundle” with beans, mug, and French press. Always check profit margins to maintain profitability.
Upselling and Cross-selling may encourage your customers to spend more per transaction.
Free shipping thresholds with optimal threshold calculation method: Set a minimum order value for free shipping that is slightly 15 - 30% above your current average AOV to encourage larger purchases and boost your AOV.
Volume discounts and tiered pricing strategies: Offer discounts for purchasing larger quantities of a product (e.g., "Buy 2, get 10% off; Buy 3, get 15% off"). Tiered pricing can also be implemented where the price per unit decreases as the quantity increases.
6.2 Advanced AOV enhancement techniques
Personalized product recommendations using customer data: Understanding customer spending patterns by leveraging customer browse history, purchase data, and demographics to offer highly relevant product recommendations. This can be achieved through Shopify apps or integrated eCommerce platforms.
Limited-time offers and urgency tactics: Create a sense of urgency by offering limited-time discounts or bundles. Examples include "Flash Sale: 24 hours only!" or "Last chance for this bundle!"
Loyalty programs are one of the efficient strategies to optimize your AOV.
Customer loyalty programs with AOV-focused rewards: Encourage loyalty by rewarding points per dollar spent, redeemable for discounts or early access to new, higher-value products.
Social proof and reviews to increase order confidence: Displaying positive customer reviews, testimonials, and user-generated content for your products can significantly increase buyer confidence, encouraging them to add more items to their cart and spend more.
6.3 What is AOV Shopify-specific strategy?
For larger brands on Shopify Plus, advanced checkout customization allows for more sophisticated AOV optimization tactics.
This includes adding upsell/cross-sell offers directly within the checkout flow, offering post-purchase upsells, and customizing the checkout experience to encourage higher spending.
You can leverage its customization capabilities to improve AOV because:
Higher conversion = Higher AOV potential: Shopify Plus stores average a conversion rate of ~3.2%, compared to the Shopify-wide average of 1.4 - 1.7%.
Faster checkout boosts performance: Shopify's 2024 - 2025 upgrades introduced accelerated checkout buttons (Shop Pay, Apple Pay) that load 58% faster on product pages.
Post-purchase offers and bundling: With Shopify Plus, brands can implement custom logic and upsell flows directly in the checkout. Merchants using these features have reported a one percent increase in conversion rates after switching to one-page, optimized checkouts. Moreover, their AOV lifts of 10 - 30% when combining post-purchase upsells and bundle offers.
7. Templates to calculate and track AOV
Consistent tracking of your AOV is crucial for understanding the impact of your optimization efforts.
7.1 What is AOV Shopify native analytics?
As mentioned earlier, Shopify's built-in analytics provide a comprehensive view of your sales performance, including your AOV. You can filter by date range, sales channel, and even product to gain deeper insights.
The Shopify AOV tracking in the Admin dashboard.
7.2 Google Analytics 4 setup for AOV tracking
For more advanced tracking and integration with other marketing data, set up Google Analytics 4 (GA4) for eCommerce tracking. AOV is not included in the standard reports, but you can access Average purchase revenue per user, which is a similar metric.
To find it, go to the Reports tab, then Monetization > Overview. Then, you can scroll down to the graph that shows Average purchase revenue per user.
You can find the Average purchase revenue per customer on GA4, which is similar to AOV.
7.3 Third-party tracking solutions comparison
Consider using dedicated eCommerce analytics platforms like Glew.io, Daasity, or Polar Analytics for more in-depth reporting and AOV analysis. Here is a quick comparison among them:
Tool | Strengths | Best for |
|---|---|---|
Robust multi-channel analytics, detailed AOV tracking, cohort analysis, and product performance reports. Integrates with over 70 platforms. | Mid to large Shopify & DTC brands wanting centralized insights. | |
Enterprise-level data orchestration with customizable dashboards, advanced segmentation, and multi-source ETL for revenue metrics. | Mature ecommerce brands need full-stack data operations. | |
Plug-and-play with fast setup, intuitive UI, and focuses on metrics like AOV, ROAS, and CAC. Strong for brands scaling fast. | Growing DTC brands that want accessible, automated insights. |
The table shows the differences among some third-party tracking apps.
7.4 Shopify apps for AOV optimization
If you are also wondering what is AOV solution is for advanced optimization, the Shopify App Store is rich with apps designed specifically. Look for apps that offer upsell and cross-sell functionalities, product bundling, free shipping bar widgets, and loyalty programs.
5 highly recommended Shopify apps are:
Qikify Cart Drawer Cart Upsell: Built for Shopify with a 4.9 rating.
Shopacado ‑ Volume Discounts: Not built for Shopify with a 4.7 rating.
BOGOS.io Free Gift BOGO Bundle: Built for Shopify with a 4.9 rating.
OV Free Gift Buy X Get Y+BOGO: Built for Shopify with a 4.9 rating.
AMP | Slide Cart Drawer: Built for Shopify with a 5.0 rating.
Qikify Cart Drawer Cart Upsell can boost your conversion and AOV Shopping cart optimization.
7.5 Enterprise solutions
For very large eCommerce operations, enterprise-level solutions like Adobe Commerce (Magento) or Salesforce Commerce Cloud offer robust analytics and AOV optimization tools, often with advanced AI and machine learning capabilities for personalization.
Adobe Commerce (Magento)’s interface.
8. Conclusion: Mastering AOV for business growth
You now have a solid understanding of what is AOV, why it's a vital metric for your Shopify store, how to calculate it, and various strategies to boost it. By diligently tracking and optimizing your AOV, you can significantly increase your revenue and profitability without necessarily needing to acquire more customers.
Your next steps should be:
Start tracking your AOV.
Implement AOV optimization strategies discussed in this article, beginning with basic strategies like free shipping thresholds or product bundling.
Monitor and continuously track your AOV after implementing changes. Analyze the impact of your strategies and iterate based on the results.
Continue to educate yourself on eCommerce analysis and optimization techniques.
We hope that by taking these actionable steps, you'll be well on your way to mastering AOV and driving sustainable growth for your Shopify business.
If you need more information for further learning, you can access additional resources like the Shopify blog, Qikify blog, industry webinars, and eCommerce forums, which provide ongoing insights.
Tide Dang
Content Creator | Qikify
With over seven years of experience in strategic marketing and content creation, I specialize in helping eCommerce brands craft high-impact campaigns that drive sales and customer engagement. My expertise in content strategy, social media, and data-driven marketing allows me to translate industry trends into actionable insights for Shopify merchants—helping them optimize their marketing efforts, attract the right customers, and boost conversions. My passion lies in empowering online businesses with the strategies they need to stand out and scale successfully in an increasingly competitive digital landscape.
TABLE OF CONTENT
- 1. What is AOV: The definition and why AOV is important?
- 2. How to calculate AOV correctly for your Shopify store?
- 3. What is AOV relationship with other key metrics?
- 4. AOV benchmarks and industry standards: What is AOV that seems good?
- 5. Common mistakes in AOV optimization
- 6. How to improve AOV: 3 strategies for order value optimization
- 7. Templates to calculate and track AOV
- 8. Conclusion: Mastering AOV for business growth
