What is Shopify Average Order Value and why should you care

by
Sara Miteva
October 27, 2022

Getting more customers won’t always help you increase revenues.

Sure, having a great number of customers is great, but it also increases investment and effort.

One metric you should pay attention to instead is Average Order Value (AOV). 

Monitoring and optimizing this metric can help you scale the growth of your Shopify store. 

Every Shopify store that wants to increase its income should consider AOV as one of the most important indicators.

Let’s break this metric down and see why it’s essential for a successful Shopify store. 

What is Shopify Average Order Value? 

AOV is a measure of the average amount that a customer spends per order on your Shopify store. You can use Shopify average order value to track your store's performance over time and to benchmark your store against other Shopify stores. 

Your Shopify AOV can be a useful metric for tracking the performance of your store and determining whether your prices are too high or too low. A high average order value indicates that customers are willing to spend more on each purchase, while a low Shopify AOV indicates that customers are only purchasing small items or are not finding what they are looking for in your store. 

Despite not affecting gross profit or profit margins, AOV is nevertheless a crucial statistic for making decisions. AOV, for instance, gives decision-makers knowledge about consumer purchasing patterns and trends, spending patterns on advertising, retail design, and even product pricing.

How to calculate your Shopify store Average Order Value? 

To calculate Shopify AOV, simply divide your total sales by the number of orders placed in your store. For example, if you had $1,000 in sales and 100 orders over the course of a month, your Shopify AOV would be $10. Shopify AOV can be a useful metric for evaluating the health of your business and setting goals for future growth. 

Once you have a measurable goal in mind, you can start working on strategies to increase your Shopify AOV. There are a number of ways to do this, including running promotions, offering discounts, and upselling to customers. Whatever strategies you choose, keep in mind that the goal is to increase the average amount each customer spends per order on your Shopify store.

Benefits of increasing your Shopify Average Order Value

There are many benefits of increasing your Shopify AOV. Here are some of them: 

  1. It allows you to make more money per customer, without having to acquire new customers. This is important because acquiring new customers can be 5-10 times more expensive than selling to existing customers. 
  2. It can help you improve your margins. This is because when you make more per sale, you have more room to spend on quality products, shipping, and other expense items. This can lead to improved customer satisfaction and loyalty, which is essential for long-term growth. 
  3. It can help you fund other growth initiatives. For example, if you want to invest in paid marketing or hire a new employee, a higher AOV will give you the extra cash you need to do so. 

How to increase your Shopify Average Order Value? 

If you want to increase your Shopify Average Order Value, there are a few things you can do: 

Offer free shipping for orders over a certain amount 

Many online shoppers are looking for a good deal, and free shipping is often the deciding factor when it comes to making a purchase. By offering free shipping for orders over a certain amount, you can encourage customers to spend more in order to take advantage of the perk

This can be especially effective during sales or promotions when shoppers are looking to get the most bang for their buck. 

In addition to increasing your average order value, free shipping can also help to boost customer loyalty and satisfaction. 

Upsell related products

By offering customers additional items that complement their purchase, you can encourage them to spend more per transaction without raising your prices. 

For example, if a customer is buying a piece of jewelry, you could suggest pairing it with a matching necklace or earrings. Or, if someone is buying a dress, you might suggest they add a scarf or belt to complete the look. Best of all, they're likely to be items that they'll actually want and use. 

Create a sense of urgency 

Urgency can be created in a number of ways, but some of the most common include limited-time offers, quantity discounts, and free shipping thresholds. By creating a sense of urgency, you encourage customers to purchase more items per transaction, which leads to a higher AOV. 

But, creating a sense of urgency doesn’t have to mean only daily discounts or seasonal offers. An offer can last 60 seconds as well. How? 

  1. A website visitor goes to the page of a product they like
  2. However, they still aren’t sure whether they want to buy for the price given
  3. They get the chance to place an offer that’s 10% lower than the original one and submit it
  4. You approve, and then they get 60 seconds to accept that offer

By taking advantage of customers’ natural desire for immediate gratification, you can encourage them to spend more with each purchase. Try 60seconds and increase your Shopify AOV by giving your customers deals that last only 60 seconds. 

Shopify AOV FAQs

How do you calculate AOV?

You can calculate your AOV by dividing your total sales by the number of orders placed in your Shopify store.

What is AOV in Shopify?

AOV is a metric for the typical sum a customer spends on a purchase through your Shopify store. The Shopify average order value may be used to compare your business to other Shopify stores and to analyze your store's success over time.

How do I increase my AOV on Shopify?

Here are some ways to increase your AOV on Shopify: 

  • Offer free shipping for orders over a certain amount
  • Upsell related products
  • Create a sense of urgency by limiting offers to one week, one day, and even 60 seconds

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