August 29, 2026
Acquiring a new customer on Shopify is more expensive than ever. With rising ad costs and tightening privacy regulations, simply driving more traffic to your store is no longer a sustainable growth strategy. The most successful brands focus on maximizing the value of the traffic they already have. This is where understanding what is average order value (AOV) becomes critical.
Average order value is the primary lever for increasing your return on ad spend (ROAS) and improving your bottom line without increasing your customer acquisition cost (CAC). At Videowise, we help brands turn video into a measurable revenue driver by focusing on metrics like AOV and revenue per session (RPS). This guide will break down how to calculate AOV, why it matters for your profit margins, and the specific strategies you can implement to get shoppers to spend more during every visit.
Average order value (AOV) is the average dollar amount a customer spends every time they place an order on your website or mobile app. It is a core key performance indicator (KPI) that reflects the intersection of your pricing strategy, product mix, and merchandising effectiveness. Unlike customer lifetime value (LTV), which looks at the total spend of a customer over years, AOV focuses on the specific performance of individual transactions within a defined period.
Most ecommerce operators track AOV on a monthly basis to smooth out daily fluctuations, though high-volume retailers often monitor a rolling weekly average. By understanding this number, you gain insight into consumer behavior and how well your site layout and promotional offers are performing. A higher AOV typically indicates that your customers see significant value in your products and are responding well to your cross-sell and upsell initiatives.
For additional context on measuring video-driven revenue and average order value, explore this video commerce ROI measurement guide.
AOV directly impacts your profitability because most fulfillment costs are fixed per order. Whether a customer buys one item or three, the labor required to pick, pack, and process the order remains relatively similar. Shipping costs also do not scale linearly with order value; a $100 order does not cost twice as much to ship as a $50 order. By increasing the value of each order, you distribute these fixed costs across more revenue, effectively increasing your contribution margin.
Key Takeaway: Increasing AOV is often more profitable than increasing traffic. New traffic requires additional marketing spend, whereas increasing AOV leverages customers who are already on your site and ready to buy.
Monitoring AOV also helps you evaluate the health of your marketing channels. For example, you might find that shoppers coming from TikTok have a lower AOV than those from your email list. This data allows you to refine your channel strategy, moving budget toward the platforms that bring in higher-spending customers rather than just the highest volume of clicks.
Calculating AOV is one of the simplest but most important formulas in your ecommerce stack. You take your total revenue and divide it by the total number of orders over a specific timeframe.
AOV = Total Revenue / Total Number of Orders
For example, if your store generated $150,000 in revenue from 1,200 orders in a month, your AOV for that period is $125.
When calculating this, operators should decide whether to include or exclude shipping revenue and taxes. For the most accurate view of merchandising performance, many brands use "Gross Product Revenue" (revenue before shipping and taxes) to calculate AOV. This ensures that a hike in shipping rates doesn't artificially inflate your AOV and mask a decline in actual product sales.
Choose a period that provides enough data to be statistically significant. For most Shopify brands, a 30-day window is the standard baseline for reporting.
Pull your total sales data from your Shopify admin or analytics tool. Ensure you are looking at the net revenue after returns and cancellations if you want a true "realized AOV."
Identify the total number of successful transactions that occurred during that same window.
Divide the revenue by the order count. Compare this number against your historical data from the previous month and the same month from the previous year.
There is no universal "good" AOV because the metric is entirely dependent on your vertical and price point. A luxury watch retailer will naturally have a much higher AOV than a brand selling organic soap. However, looking at industry averages helps you understand where you sit relative to your peers.
| Industry Category | Estimated Average Order Value |
|---|---|
| Home & Furniture | $240 - $260 |
| Fashion & Apparel | $140 - $160 |
| Food & Beverage | $90 - $110 |
| Beauty & Personal Care | $70 - $90 |
| Health & Wellness | $85 - $105 |
If your AOV is significantly lower than your industry benchmark, it often indicates a friction point in the checkout process or a missed opportunity in your bundling strategy. If it is higher, it usually means your brand has strong authority and effective tiered pricing.
To move the needle on AOV, you must give shoppers a clear, value-driven reason to add more items to their cart. This involves a mix of psychological triggers, technical optimizations, and better content delivery.
Setting a free shipping threshold is the most common and effective way to increase order size. Shoppers have a psychological aversion to paying for shipping and will often spend more on a product to "save" on the shipping fee.
To find your ideal threshold, look at your current AOV and set the limit approximately 20% to 30% higher. If your AOV is $75, try setting free shipping at $100. This makes the goal attainable by adding one or two small items, like accessories or travel-sized products.
Shoppable video allows customers to see products in context, which builds the confidence needed to purchase higher-priced items. We have seen that when brands integrate interactive video directly onto their Product Detail Pages (PDPs), customers stay on the site longer and are more likely to buy the "full look" rather than just a single item.
Using Videowise's shoppable video platform, you can tag multiple products within a single video. If a customer is watching a video of a model wearing an entire outfit, they can click on individual items within the video player and add them to their cart without leaving the page. This reduces friction and naturally leads to multi-item orders.
Bundling complementary products at a slight discount creates a high perceived value for the shopper. Instead of selling a single skin cream, sell a "Morning Routine Kit" that includes a cleanser, toner, and moisturizer.
The key to successful bundling is convenience. The customer should feel that the bundle solves a specific problem or completes a set. This strategy moves more inventory and ensures that the customer gets the best possible experience with your products by using them as intended—as part of a system.
Upselling encourages a customer to buy a more expensive version of an item, while cross-selling suggests related products. For an upsell to work, the price jump must be justified by clear feature benefits, such as a "Pro" version of an electronic device.
Cross-selling is most effective at the cart or "drawer" stage. If someone adds a pair of running shoes to their cart, a "Frequently Bought Together" widget showing performance socks or a water bottle can easily add $15 to $30 to the total order value.
Tiered discounts incentivize higher spending by offering larger rewards as the cart total grows. For example:
This strategy is particularly effective during holiday sales or seasonal clearances. It gamifies the shopping experience and encourages customers to reach for the next tier to maximize their savings.
User-generated content (UGC) provides the "real world" validation that high-intent shoppers need before committing to a larger purchase. When a shopper sees a video of a real customer using a premium product, it bridges the trust gap that static professional photography often leaves.
Our platform allows you to import UGC from TikTok and Instagram into a centralized Creative Library. You can then deploy these videos across your site as shoppable carousels. See how Skullcandy used shoppable UGC to increase revenue per session by turning social content into product experiences across its storefronts.
A loyalty program that rewards points based on dollar spend encourages customers to increase their order totals to reach the next reward tier. If a customer knows they are only $20 away from a $10 discount or a free gift, they will almost always find another item to add to their cart. This not only increases AOV in the short term but also improves long-term retention.
The period immediately after a customer clicks "Buy" is a high-intent window that many brands overlook. By offering a "limited time" discount on a related item on the thank-you page, you can often secure a second transaction that gets merged with the first order. Since the customer has already entered their payment information, the friction is nearly zero.
While AOV is a vital metric, it should not be viewed in a vacuum. To understand if your AOV strategies are actually growing your business, you must track them alongside two other performance indicators.
Revenue per session is calculated by dividing your total revenue by the total number of site visits. This is often a more holistic metric than AOV because it accounts for your conversion rate. If you double your AOV but your conversion rate drops by 70% because your prices are too high, your RPS will decline, and your business will suffer.
For a deeper explanation of video attribution and revenue per session, read how to track shoppable video performance.
Influenced revenue tracks how specific site elements—like video or reviews—contribute to a final purchase. Our Content Performance Analytics allow you to see exactly how much revenue was influenced by a customer watching a video. This helps you understand if your investment in content is actually driving higher order values or just providing "engagement" without a financial return.
Myth: Increasing AOV will always decrease your conversion rate. Fact: If the increase in AOV is driven by added value (like bundles or free shipping thresholds) rather than just price hikes, your conversion rate often stays steady or even increases as customers feel they are getting a better deal.
A common mistake operators make when trying to increase AOV is overloading their site with heavy third-party apps, carousels, and high-resolution media. This often leads to slow load times, which can hurt your conversion rate and Core Web Vitals.
We built our video infrastructure to ensure that adding rich, shoppable content doesn't compromise site speed. Our platform uses performance-first loading techniques, ensuring that videos only load as they enter the viewer's viewport. This allows you to maintain the high-quality visual experience necessary to drive high AOV without the technical debt that usually slows down Shopify stores.
Bottom line: Your AOV strategy is only as good as your site performance. If your cross-sell widgets or video players cause the page to lag, you will lose the sale before the customer can even see the offer.
Understanding what is average order value is the first step toward building a more profitable and efficient ecommerce brand. By focusing on higher-quality content, strategic thresholds, and personalized recommendations, you can drive more revenue from every visitor.
At Videowise, we are dedicated to helping brands turn their video assets into measurable revenue. Our platform is built for operators who prioritize business outcomes like AOV and CVR over vanity metrics. By integrating shoppable video and social commerce into your store, you create a shopping experience that naturally leads to larger carts and more loyal customers.
Are you ready to see how shoppable video can increase your store's AOV? Install Videowise from the Shopify App Store or book a personalized demo with our team to see the performance-first infrastructure in action.
Average order value (AOV) only measures the value of completed transactions, while revenue per visitor (RPV) accounts for everyone who visits the site, including those who don't buy. RPV is essentially AOV multiplied by your conversion rate. Tracking both ensures that you aren't increasing order size at the cost of losing too many customers.
Not necessarily. AOV does not account for the cost of goods sold (COGS) or the marketing expenses required to acquire the customer. You must look at your contribution margin per order to ensure that the increased order value is actually resulting in more profit after all expenses are paid.
The fastest way to see a lift in AOV is usually implementing a free shipping threshold that is 20-30% above your current average. This provides an immediate, easy-to-understand incentive for customers to add one more item to their cart before checking out.
Standard video embeds can slow down a site, but our performance-first shoppable video infrastructure is designed to load asynchronously. This means the video content does not block the rest of the page from loading, allowing you to use high-converting shoppable video without negatively impacting your Core Web Vitals or conversion rates.
