Definition: Average Order Value (AOV) is the average amount a customer spends per transaction on an online store. It is calculated by dividing total revenue by the total number of orders.

Formula: AOV = Total Revenue ÷ Number of Orders.

Why it matters: AOV is one of the most important levers of an e-commerce business because more spend per order means higher revenue without needing more traffic or new customers. Raising AOV is a core focus for D2C and e-commerce brands — strategies include product bundling, cross-selling & upselling, minimum-order free-shipping thresholds, volume discounts, and cart-abandonment recovery.