AOV: definition, calculation, and strategies to grow it

AOV should be calculated net of returns and refunds to reflect the real net value.

It is best to track AOV by segment:

• By acquisition channel (email customers' AOV is often higher than display customers')
• By product type
• By geographic region
• By device (desktop vs. mobile)

These variations reveal targeted optimization opportunities.

AOV is directly linked to LTV: LTV = AOV × Purchase frequency × Customer lifetime. Increasing AOV by 20% mechanically raises LTV by 20% at constant frequency and lifetime, which improves the LTV/CAC ratio and therefore acquisition profitability.

AOV is one of the most under-exploited growth levers in e-commerce. While marketing teams often focus on (expensive) new-customer acquisition, growing AOV improves revenue with the same customer base and the same fixed costs.

Why AOV is strategic:

• A 10% AOV increase directly improves profitability without raising acquisition costs
• Variable costs (shipping, customer service) do not grow proportionally to AOV
• A rising AOV signals that merchandising and product recommendations are working
• AOV directly influences LTV and the LTV/CAC ratio, and thus the overall profitability of acquisition

1. 1Free-shipping threshold set slightly above your current AOV (e.g., free shipping above €60 if your AOV is €45) — this is the most documented technique to encourage customers to add products to their cart.
2. 2Discounted bundles to increase perceived value per order.
3. 3Complementary product recommendations (cross-sell) on product pages and in the cart.
4. 4Premium services with added value: express delivery, gift wrapping, extended warranty.
5. 5Multi-purchase promotions such as "buy 2, get the 3rd at -50%" to encourage multiple-item purchases.