Average order value (AOV)
Average order value is the mean amount spent per order — total revenue divided by number of orders.
Average order value (AOV) measures how much customers spend, on average, each time they place an order. It's a fast pulse on merchandising and pricing: raising AOV through bundles, upsells, cross-sells or free-shipping thresholds increases revenue without needing more traffic. Track it over time and by segment — a rising AOV alongside steady order counts is pure margin.
How it's measured
AOV = total revenue ÷ number of orders, over a chosen period.
Related terms
Customer lifetime value (CLV / LTV)
Customer lifetime value is the total revenue (or profit) a customer generates across their entire relationship with your store.
Gross margin
Gross margin is the percentage of revenue left after subtracting the cost of goods sold.
Cohort analysis
Cohort analysis groups customers by a shared start point (e.g. first-order month) and tracks their behaviour over time.