What Is AOV (Average Order Value) and How to Increase It
Contents:
- Quick Answer Box
- Brief Intro
- Preparation
- Step 1: Implement Strategic Product Bundling
- Step 2: Set Free Shipping Thresholds Above Current AOV
- Step 3: Add Strategic Upsells at Checkout
- Step 4: Create Volume-Based Discounts
- Quick Cost Breakdown
- Pro Tips
- Examples
- FAQ
- What’s considered a good AOV for e-commerce?
- Does increasing AOV always mean higher profit?
- How quickly can AOV improvements show results?
A single percentage point increase in average order value can add tens of thousands of dollars in annual revenue for a mid-sized e-commerce store, without acquiring a single new customer, yet most businesses focus almost entirely on customer acquisition instead.
Quick Answer Box
AOV, or average order value, measures the average amount customers spend per transaction, calculated by dividing total revenue by total number of orders over a given period.
Brief Intro
Increasing AOV represents one of the most cost-effective growth strategies available, since it generates more revenue from existing traffic and customers rather than requiring additional marketing spend to attract new buyers.
Preparation
Calculate your current AOV by dividing last month’s total revenue by total number of orders, establishing a clear baseline before implementing any specific improvement strategy.
Step 1: Implement Strategic Product Bundling
Bundle complementary products at a slight discount compared to individual purchase, encouraging customers to add items they’d likely purchase separately anyway while increasing per-transaction value.
Step 2: Set Free Shipping Thresholds Above Current AOV
Establish a free shipping minimum slightly above your current average order value, motivating customers to add additional items to qualify, a strategy proven to reliably increase cart totals.
Step 3: Add Strategic Upsells at Checkout
Display relevant, higher-value product alternatives or add-ons during the checkout process, when purchase intent is already established and customers are more receptive to relevant suggestions.
Step 4: Create Volume-Based Discounts
Offer tiered discounts for purchasing multiple units, like “buy two, save 15%,” which particularly works well for consumable products customers naturally reorder.
Quick Cost Breakdown
Implementing bundling and upsell features through platforms like Shopify typically costs $20 to $50 monthly for relevant apps, a minimal investment compared to the potential revenue increase from even modest AOV improvements.
Pro Tips
Test free shipping threshold placement carefully; setting it too high discourages purchases entirely, while setting it too close to typical order value provides minimal actual AOV lift.
Examples
A skincare brand increased AOV from $42 to $58 within three months by bundling their best-selling serum with a complementary moisturizer at a 10% combined discount, encouraging customers who would have bought just one product to purchase both.
FAQ
What’s considered a good AOV for e-commerce?
This varies enormously by industry, though tracking your own AOV trend over time matters more than comparing against generic industry benchmarks that may not reflect your specific product category.
Does increasing AOV always mean higher profit?
Not automatically; ensure bundling and discount strategies still maintain healthy margins rather than simply moving more product volume at reduced profitability per unit.
How quickly can AOV improvements show results?
Most bundling and threshold strategies show measurable impact within 30 to 60 days of implementation, allowing for reasonably fast testing and iteration.
