Average Order Value: Definition and 7 Ways To Grow It (2024)

Average Order Value: Definition and 7 Ways To Grow It (2024)

Understanding and optimizing Average Order Value (AOV) is crucial for sustainable business growth, read this article to find 7 unconventional ways to grow it.
Average Order Value: Definition and 7 Ways To Grow It (2024)
Pietro Di Chio | Full Stack Developer
Pietro Di Chio | Full Stack Developer
January 5, 2024

In the ever-evolving landscape of e-commerce, understanding and optimizing Average Order Value (AOV) is crucial for sustainable business growth. 

AOV not only reflects the effectiveness of your sales strategies but also directly impacts your revenue.

It tells you how much customers are spending on your online shop every time they check out and gives you an idea of what sort of items to bundle together.

According to the latest e-commerce data in 2023, the average order value (or AOV) in e-commerce is approximately $122.82.
This represents a 9.75% increase from 2022’s average order value per customer.

The key benefit of increasing the average order value is that you make more money from each transaction.
This means that your store is more profitable. And so you have more money to re-invest in your business.

Often, when a customer shops online, they’ll only buy exactly what they’re looking for. However, with the strategies that we’ll share in this article, you’ll learn how to generate more sales from each order.

Defining Average Order Value

Average Order Value is the average amount a customer spends per transaction on your e-commerce store.
It is a key metric that provides valuable insights into customer behavior and purchasing patterns.

AOV - definition and formula
AOV - definition and formula

Like any e-commerce metric, its significance is tied to related other business metrics. 

In particular, when measuring AOV, you should also consider:

  1. Customer LifeTime Value (CLTV).
    This is the total value of each customer and notes the average amount of money they'll spend over time. If this is too low, customers aren't making multiple purchases, which means a lower return on all investments in advertising.

  2. Cost Per Acquisition (CPA).
    This metric notes how much it costs to get each customer to make the 1st conversion, and should be subtracted from the Average Order Value to display the actual profit per order.

If you would like to know more about CPA and CLTV, I suggest you read this article.

Sometimes calculating AOV precisely can be difficult and in particular it can be hard when you’re dealing with a lot of different customers.

Keep reading to discover the main strategies to analyze AOV properly!

Measuring and Analyzing AOV

  1. Utilizing Analytics Tools to track AOV

All the e-commerce experts stress the importance of leveraging analytics tools to track and analyze AOV trends over time. 

Google Analytics and e-commerce platforms' built-in analytics features can provide valuable insights.
If your e-commerce website is attracting a lot of customers, you can analyze their behaviors and understand how to solve key conversion problems.
For example, if a lot of customers initiate the checkout procedure, but a lot of them don’t buy, maybe there is a problem with your offer or on your checkout procedure.
Remember to set up correctly your Google Tag Manager and Google Analytics to understand what marketing activity caused the conversion and have an efficient attribution model.

  1. Segmenting Customer Data

One crucial aspect for measuring AOV is segmenting customer data to identify high-value customer segments.
This involves categorizing customers based on various parameters like purchase history, preferences, and demographics. 

Segmenting both website visitors and clients, facilitates a nuanced understanding of how different customer groups respond to various incentives or promotional strategies.
The aim is to identify high-value customer segments, those who consistently contribute significantly to the AOV.
By understanding the unique characteristics and preferences of these segments, your e-commerce business can tailor its marketing strategies with a high degree of precision.
And guess what? Personalized experiences mean higher ROI.

  1. A/B testing: more insights about your AOV

Finally, another fundamental method to understand Average Order Value is to A/B test your landing page, your offers and your marketing automations.
The process of segmenting customer data based on how they behaved and interacted with your website and marketing activities can be a “gold mine”.

In particular, A/B testing is an excellent way to test all the following strategies to see which ones are best for your e-commerce store.
This granular insight allows for a more personalized and strategic approach, ensuring that marketing efforts are not only personalized but also optimized for maximum impact on AOV.

According to recent statistics, 90% of shoppers attest to being willing to share their behavioral data if their shopping experience is made cheaper or more convenient.

There’s never been a better time to implement A/B testing and more personalization into your online store.

7 Strategies to Elevate AOV

Now that you have discovered what AOV is and how to measure and analyze it, it’s time to understand how to increase it.

  1. Increase customer experience and support

Offering the best customer support will make your visitors and recurring customers fall in love with your store and with your brand.

You can have all types of offers, discounts and bundles, but without great customer experience, you will never grow consistently.
More importantly, you will never receive trust from your existing customers and so you’ll be forced to acquire constantly new customers to stay “in business”.

That’s a really bad way to make your e-commerce store die. But customer support is expensive.

Unless you’re using AI chatbots, like TextYess.

Why not have great custom support, available 24/7, that helps you increase conversion rate, and customer satisfaction but doesn’t require you to spend a lot of money and time on it? You can try TextYess for free and see our success stories here.

Increase AOV with AI support
Increase AOV with AI support
  1. Tiered pricing according to your AOV

Introducing tiered pricing based on quantity or order value can encourage customers to buy more to unlock discounts, thereby elevating the AOV.

Tiered pricing offers customers a variety of prices, each based on certain features, benefits, or services.
These tiers allow customers to choose the option that best accommodates their needs and often incentivize them to move up in tiers over time.

Another successful upselling strategy is promoting more of the same product. For instance, if you're selling essential oils, you can recommend additional bottles of the same scent or suggest a couple of other popular scents to the customer. This approach capitalizes on the idea that people are inclined to buy more of what they love, especially if there's a likelihood of the product running out eventually.

And remember the 2 following suggestions.

  1. Keep it simple. A customer should be able to understand your offer and tiered discount structure within 3 seconds. If there is any complex logic or math involved, most people will just shop elsewhere.
  2. Match spend with your typical AOV. If your AOV is $25, your discount spending tiers should reflect that and not start at $250, but at $25+, then move to $50+ and then $150+.
  1. Upselling and Cross-selling: easy AOV boost 

Boosting your Average Order Value (AOV) often relies on taking advantage of the effectiveness of upselling and cross-selling techniques.

Implementing product recommendations based on customer preferences not only enhances the shopping experience but also boosts AOV. By strategically grouping related products and offering them at a slightly discounted price, you can incentivize customers to increase their order value.

A cross-sell strategy is suggesting a complementary item to the product a customer is currently viewing.
For instance, if a customer is looking at a dress, a smart cross-sell would be to recommend accessories like a pair of earrings that perfectly match the outfit.
To enhance cross-selling, consider adding the products featured on the model to the list of recommended items.

Upselling involves encouraging customers to purchase more expensive items or additions, aiming to increase the AOV and overall profit.
For instance, if your main product is pillows, effective upselling could include suggesting additional items like comforter sets, duvets, or related products.

  1. Personalized Product Recommendations

Utilize data analytics, A/B testing and segmentations to identify the preferences of your customer and to provide personalized product recommendations.
Tailoring suggestions to individual customer preferences can significantly increase AOV.

Implementing product recommendations based on customer preferences not only enhances the shopping experience but also boosts AOV.

You can use chatbots or live agents that can suggest products, based on the customer’s needs and even create up-selling or cross-selling strategies.

For example, the perfume e-commerce Olimpia Home, has generated 132 orders from 797 conversations by using TextYess, reaching a ROAS of 72.

You can calculate how much you can increase your sales thanks to TextYess, on our website.

Increase AOV with product recommendations
Increase sales with product recommendations

  1. Free Shipping Thresholds: increase AOV “threshold”

Setting a minimum order value for free shipping can motivate customers to add more items to their cart, surpassing the threshold and increasing the AOV.

Once you’ve calculated your average order value, add 30% to it or whatever the cost of shipping is for the products you’re selling.
For example, if your average order value is $100, with the 30% increase, it becomes $130.
This new number is what you’ll set your free shipping threshold at: in this case, free shipping on all orders over $130. 

You can also add a notification when customers check out and their purchase doesn’t add up to the free shipping threshold.
By having this notification, you’ll be able to help increase average order value

  1. Limited-time Offers: increase AOV with scarcity and urgency

Another great strategy to increment the Average Order Value, is creating a sense of urgency by introducing limited-time offers.
Scarcity and urgency can drive customers to make larger purchases, positively impacting AOV.

In particular, urgency and scarcity deals can be very effective when combined with upselling and cross selling (for example by offering a limited number of product bundles). 

Time-sensitive deals prove especially effective during “slower periods”, providing a quick and relatively simple strategy to elevate average order values.

For instance, consider offering a 48-hour deal where customers receive a complimentary gift or a special discount upon ordering a specific quantity of products.
Although the impact on average order value may not be prolonged, creating a sense of urgency significantly enhances conversion rates.

  1. Provide live chat support for quick questions

Think of live chat as a tool that goes beyond the stereotypical image of support agents in headsets managing issues in an office.
Nowadays, businesses in ecommerce that utilize live chat experience increased sales, typically ranging from 10% to 15% more per cart, as reported by Forrester.

Another perspective on live chat is its effectiveness in assisting your most eager buyers in completing their purchases. When engaging in live chat, you're interacting better with visitors who purposely visited your site to explore or make a purchase. 

Live chat proves especially beneficial for high-value items such as mattresses and furniture, where customers may require more guidance before reaching the checkout. But live chat is expensive and is not (usually) available 24/7.

That’s why a lot of successful Shopify stores are using AI chatbots, like TextYess, to offer customer support 24/7/365 days, allowing your customers to get instant assistance at any time, even outside regular business hours.

This accommodates potential customers in different time zones or people shopping during the evening and weekends, increasing the conversion rate of your website. This is a key benefit. In fact, 64% of consumers claim that the best feature of chatbots is their availability 24/7.

That’s why some of TextYess clients were able to achieve a ROAS higher than 100.

Increase AOV with live chat support
Increase AOV with live chat support


In conclusion, AOV is a pivotal metric that demands continuous attention and strategic planning in the e-commerce realm. 

As mentioned in this article, AOV not only estimates the efficacy of marketing strategies but also directly influences revenue streams.

The strategies discussed, ranging from utilizing analytics tools to segmenting customer data and implementing tiered pricing, all underscore the multifaceted nature of AOV optimization. By leveraging these approaches, e-commerce businesses can actively enhance sustainable growth.

Moreover, the significance of customer-centric strategies, such as live chat support and personalized product recommendations, cannot be overstated. 

The evolving landscape of e-commerce demands your business to adapt and cater to the unique needs and preferences of your customer base.
The integration of live chat, whether through human agents or AI chatbots like TextYess, has shown a substantial impact, contributing to a notable increase in Average Order Value.

In the ever-evolving landscape of e-commerce, businesses that commit to understanding, measuring, and strategically enhancing their Average Order Value are better positioned to not only survive but thrive in the competitive online marketplace.