Average Order Value (AOV)

aov

Overview

Average Order Value (AOV) calculates the average amount spent by customers per order, after shipping and taxes.

📘

AOV = (Order Revenue - Shipping - Taxes) / Orders Count

The calculation is based on data from the Orders table.

Detailed Breakdown

The formula above is derived from the following components:

Order Revenue = SUM(order_revenue) --> Orders table
Shipping = SUM(shipping_price) --> Orders table
Taxes = SUM(taxes) --> Orders table
Orders = SUM(orders_quantity) --> Orders table

Insights and Actions

Average Order Value (AOV) is a key metric for e-commerce businesses, indicating the average amount spent per order, which provides a lens into customer spending behavior. Efficiently leveraging AOV data can guide strategic business decisions:

• Implement Upselling Techniques: Encourage customers to purchase higher-value items or additional features to increase the overall order value.
• Introduce Bundle Offers: Bundle products together at a slight discount to promote the sale of more items in a single transaction.
• Set Free Shipping Thresholds: Establish a minimum order value for free shipping that's above your current AOV to incentivize larger purchases.
• Create Loyalty Programs: Reward customers for higher spending, encouraging them to increase their order size to unlock rewards.
• Optimize Product Pricing: Regularly review your pricing strategy to ensure it encourages customers to add more to their carts, potentially raising your AOV.

Example Use

Prompt

What's my AOV for the last 90 days?

Response

Query

SQL

SELECT
  COALESCE(
    SUM(ot.order_revenue - ot.shipping_price - ot.taxes) / NULLIF(SUM(ot.orders_quantity), 0),
    0
  ) AS aov
FROM
  orders_table AS ot
WHERE
  ot.platform IN ('stripe', 'shopify', 'amazon')
  AND ot.event_date BETWEEN CURRENT_DATE() - 90 AND CURRENT_DATE()  - 1;