Average Order Value (AOV)

Definition

Average Order Value (AOV) is a key performance indicator (KPI) in e-commerce that measures the average monetary value of each order placed on an online store. It is calculated by dividing the total revenue by the number of orders over a specific period. A higher AOV indicates that customers are spending more per transaction, which directly contributes to increased revenue without necessarily needing more traffic.

Why It's Important for E-commerce

For e-commerce, AOV is critical for understanding customer spending habits and optimizing profitability. Businesses use AOV to evaluate the effectiveness of their marketing, merchandising, and pricing strategies. PIM systems enhance AOV by providing rich, accurate product data that enables effective cross-selling and upselling initiatives, helping customers discover complementary or higher-value products during their shopping journey. By offering complete product information, PIM empowers businesses to create persuasive product bundles and recommendations that encourage larger purchases.

Examples

• An electronics retailer uses PIM data to suggest a compatible accessory (e.g., a case) when a customer adds a new smartphone to their cart, increasing the AOV.
• A fashion brand showcases 'complete the look' options on product pages, drawing from PIM-managed product relationships to encourage additional purchases.
• An online grocery store offers 'buy one, get one half price' on related items, using PIM to manage promotional attributes and product groupings.
• A furniture store presents an upgraded fabric option or an extended warranty for a sofa, powered by detailed product variant data in their PIM.
• Implementing a free shipping threshold that encourages customers to add more items to their cart to qualify, leveraging PIM for accurate inventory and pricing.

How WISEPIM Helps

• **Enables effective cross-selling and upselling:** WISEPIM centralizes product relationships, enabling accurate, personalized recommendations that encourage higher value purchases.
• **Facilitates product bundling:** Manage complex product bundles and kits with all associated data, making it easy to promote combined offers to customers.
• **Supports promotional strategies:** Accurately manage product attributes for promotions and discounts across all channels, directly impacting AOV.
• **Improves product discoverability:** Rich, complete product data helps customers find complementary items, leading to larger baskets.

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