The average order value for e-commerce globally is just $130. And we’re pretty sure this number isn’t going to cut it. You’d want the most out of your Shopify store, marketing efforts, resources, and campaigns. 

That’s where tracking Shopify average order value becomes essential. AOV isn’t just another metric; it’s a clear indicator of how well your sales strategies, upselling tactics, and promotions are performing. When you know your Shopify average order value, you can pinpoint areas for improvement, optimize your ad spend, and adjust your pricing strategies to increase revenue per customer.

In this guide, we’ll show you how to calculate AOV and use it to your advantage for smarter business decisions.

What is the Average Order Value (AOV)

Average Order Value (AOV) in Shopify is the average amount of money a customer spends on your store per transaction (order). It’s calculated by dividing total revenue by the total number of orders (AOV = Revenue / Number of orders). Tracking this key metric helps you understand how much revenue each order generates, which is crucial for refining your marketing and sales strategies.

Tracking Shopify average order value is not just about knowing how much your customers spend; it provides a deeper insight into your store’s overall performance. Here’s why monitoring AOV is important:

• Optimize ad spend

By analyzing AOV, you can fine-tune your paid campaigns to focus on customers likely to make higher-value purchases. This helps increase your return on ad spend (ROAS).

• Measure sales effectiveness

AOV gives you a clear picture of how well your upselling or cross-selling strategies are working. Integrating AOV data into ad platforms ensures you’re engaging high-value segments. For example, you can engage high AOV customers with high-value products.

• Drive revenue growth

Understanding AOV helps you implement strategies such as offering free shipping thresholds, which encourage customers to add more items to their cart and, in turn, increase their average order value.

• Improved Customer Lifetime Value (CLV)

Higher AOV typically correlates with increased customer lifetime value. When customers make larger purchases, their overall value to your business grows, allowing you to invest in loyalty programs and retention strategies.

• Cost Efficiency

Enhancing AOV optimizes cost per acquisition by maximizing revenue from existing customers, which is often more cost-effective than acquiring new customers.

To start calculating AOV, you’ll need to follow a few steps that take into account sales, discounts, and order numbers. Let’s dive into those next.

Steps to Calculate Average Order Value in Shopify

Calculating the Shopify average order value can be broken down into clear steps. By following these, you can ensure your data is accurate and actionable for optimizing your marketing efforts.

Before starting, make sure you have access to your sales reports in Shopify and consider any discounts, refunds, and cancellations. Here’s how you can calculate AOV:

• Step 1: Calculate gross sales by summing total revenue:
  • Add up all revenue generated by your store, considering product sales and any additional costs like shipping fees.
  • Use Shopify’s sales reports to gather this data, ensuring you’re looking at the right time period.
  • If you’re tracking eCommerce campaigns through multiple platforms, make sure your data is consistent across. You can use tools such as CustomerLabs to pull in data from multiple sources such as CRMs, and place them in one place.
• Step 2: Subtract discounts from gross sales to get net sales:
  • Deduct all discounts from the gross sales, including any promotional codes, loyalty rewards, or seasonal sales.
  • Ensure your calculations reflect real revenue, excluding full-price sales.
• Step 3: Divide net sales by the total number of orders:
  • Take the net sales figure and divide it by the total number of orders to get your AOV.
  • For example, if your net sales were $10,000 and you processed 200 orders, your AOV would be $50.

With this simple calculation, you can gain insights into customer spending and refine your marketing strategies. Next, let’s look at the factors you need to consider for accurate AOV calculations.

Factors to Consider for Accurate AOV Calculation

Accurate calculation of your Shopify store’s average order value requires careful attention to detail. If you miss key factors, your AOV might not reflect the actual customer spending patterns in your store. 

Let’s explore the essential elements you need to keep in mind to ensure your calculations are reliable and useful for making data-driven decisions.

• Ensure consistency with the time period in Shopify reports:
  • Always compare data for consistent time periods when calculating AOV. If you’re analyzing quarterly performance, make sure all your reports reflect the same dates.
  • Consistent time periods allow you to track trends more effectively, helping you evaluate the impact of campaigns like holiday promotions or limited-time offers.
• Include all orders, accounting for refunds and cancellations:
  • Ensure that any refunds, exchanges, or cancellations are included in your total orders. Excluding them can lead to an inflated AOV and skewed insights.
  • Accurately tracking these figures, especially during return-heavy periods like post-holiday seasons, helps maintain accurate insights into your store’s performance.
• Verify deductions of discounts and adjustments in calculations:
  • Be sure that all discounts are deducted from gross sales before calculating net sales. This gives you a true reflection of what customers are spending after any promotions.
• Exclude tax and shipping fees from the calculation:
  • Tax and shipping fees don’t contribute to the customer’s perceived order value. Ensure these are excluded to reflect the true product value.
  • This is particularly important when targeting segments with high shipping costs, as including these might distort the actual product AOV.
• Ensure you’re tracking high-volume sale periods separately:
  • Sales events such as Black Friday or Cyber Monday often see higher average order values. Track these periods separately to avoid inflating your regular AOV and get clearer year-round insights.
• Consider segmenting AOV by customer type:
  • Different customer segments, like first-time buyers vs. returning customers, often have different AOVs. Segmenting your AOV calculations gives you deeper insights into how customer groups contribute to your revenue.
  • This approach can inform whether to adjust upsell tactics based on whether you’re dealing with new or loyal customers.
• Factor in subscription orders or recurring purchases:
  • If your store offers subscriptions or recurring purchases, calculating AOV for these customers separately can offer more clarity. Subscription buyers tend to have a higher AOV over time, which might skew your data if mixed with one-time buyers.
• Web vs. App Transactions
  • The platform your customers use can significantly impact AOV. Research has shown that AOV on desktop tends to be higher than on mobile apps or tablets, likely due to screen size, shopping behavior, and usability preferences. Consider segmenting AOV by platform to understand where higher-value transactions occur and optimize the user experience accordingly.
• Orders from a Particular Category
  • Certain product categories may naturally drive higher AOVs. For example, high-ticket items like electronics or fashion products can elevate AOV compared to smaller items. Segmenting AOV by product category provides insights into which types drive the most value, helping you refine promotions and marketing strategies. This approach ensures you’re effectively leveraging high-revenue categories to boost overall AOV.

Now that you know how to ensure accuracy in your AOV calculations, let’s explore some common challenges you might face and how to overcome them.

Challenges in AOV Calculation

Calculating Shopify average order value can be tricky, especially when certain factors distort the data. You need to be aware of potential issues that could lead to inaccurate insights. These challenges often come from order inconsistencies, like returns, discounts, or even seasonal promotions, which may skew the true picture of customer spending. Let’s explore these challenges and how to address them. Most of these challenges arise from the factors responsible for AOV calculation. Dive in to know how they cause a challenge:

• Potential discrepancies caused by returns and exchanges:

One of the biggest challenges in calculating AOV is accounting for returns and exchanges. If you don’t factor these in, your average order value will be artificially high because the refunded amounts aren’t deducted from your total revenue.

• Promotional discounts can affect AOV:

If you’re running a discount on all items, your AOV might appear lower than usual, but this doesn’t mean customers are buying fewer items.

Instead, you’re seeing the impact of pricing reductions. It’s important to distinguish between discounted sales and regular sales to better understand how pricing strategies affect AOV. 

• Seasonal sales can skew AOV calculations:

During holiday periods, your AOV may spike due to bulk purchases or higher spending from gift shoppers. While this boost is great for short-term performance, it may distort your long-term AOV trends.

• Fluctuations due to one-time high-value orders:

If you sell a big-ticket item once in a while, it can cause a sudden spike in your AOV. This fluctuation can give you a false sense of high customer spending when, in reality, it’s an anomaly.

• Multiple sales channels can complicate tracking:

If you’re selling across multiple channels—like Shopify, physical stores, or marketplaces—it can be hard to unify all your sales data to calculate AOV accurately. Inconsistent data from various sources can lead to errors in the final calculation.

• Adjustments for international sales:

If your store serves multiple regions with different currencies, it can complicate AOV calculations. Currency conversions can lead to errors, especially if exchange rates fluctuate.

Though these challenges are a roadblock, it’s not the end game to calculate your AOV accurately. 

Way Forward for Accurate AOV calculation

• Calculate AOV for festive seasons separately and compare only those specific festive seasons. 
• Exclude one-time large purchases from your AOV calculations or create a separate report for high-value orders. This will help you maintain a more balanced view of everyday customer spending.
• Aggregate data from all sales channels, ensuring your AOV is consistent across the board.
• Make sure your Shopify reports reflect accurate conversions when calculating AOV for international customers. You can also use multi-currency management tools to simplify this process.

You can ensure your AOV calculations are more accurate and useful for decision-making by following the way forward in calculating your AOV.

Increasing your Shopify Average Order Value (AOV)

For Shopify marketers, achieving high-AOV purchases is essential for increasing profitability. To increase your AOV, you have to increase your purchase value keeping the number of orders constant. To do that, among several other options, one crucial option is – to optimize your ad spend in the right way using high-quality 1p data (first-party data).. 

Another such strategy you can implement is, optimize the ad campaign with the right audience data. 

For instance, sending the high AOV event to Meta optimizes your ad campaign for high AOV purchases. This boosts your ad campaign performance with more high AOV purchases.

Using CustomerLabs for High-AOV Purchases on Shopify

With CustomerLabs, you can create custom conversion events for Shopify tailored specifically for high-AOV purchases, allowing Meta’s ad algorithm to focus on customers likely to make higher-value transactions. Here’s how it works:

1. Create a Custom Conversion Event for High-AOV Purchases: Using CustomerLabs, segment and create a custom conversion event with high-AOV transactions by analyzing purchase behavior.
2. Sync with Meta for Optimized Ad Targeting: Once your high-AOV custom event is set up, sync it with Meta. This enables Meta to train its ad algorithms, and optimize ad delivery to audiences more likely to make larger purchases, improving ROAS and overall ad efficiency.
3. Drive Cost-Efficient Growth: By focusing on high-AOV purchases, you get more purchases with higher value at the same ad spend. This approach can yield significantly higher incremental revenue compared to campaigns focused solely on conversion volume.

Through CustomerLabs, Shopify marketers can transform Meta Ads into high-performing campaigns tailored to boost both AOV and customer lifetime value (CLV), providing a strategic edge in the competitive e-commerce sector.

So, Ditch Shopify CAPI today, and go beyond Conversions API with CustomerLabs 1PD Ops.

Conclusion

Accurately calculating Shopify store’s average order value is crucial for making informed decisions that drive revenue growth. By understanding AOV, you can assess the effectiveness of your sales strategies and identify areas for improvement, such as pricing or product bundling. A precise AOV calculation helps you pinpoint high-value customer segments and adjust your marketing efforts accordingly, improving your return on ad spend (ROAS) and overall profitability.

Whether you’re optimizing campaigns or planning long-term strategies, ensuring accurate AOV data provides valuable insights that keep your Shopify store on the path to sustainable growth. 

To maximize your AOV further, try CustomerLabs CDP. By integrating CustomerLabs with Shopify, you can leverage first-party data from your Shopify store, ad platforms, and third-party sources to gain a clearer picture of your highest-paying customers. With this integration, you’ll segment and target high-value customers more precisely, helping you convert casual visitors into paying customers and drive meaningful revenue growth. 

Get more high AOV purchases today by adopting 1P data Ops strategy in your ad campaigns! To know more, schedule a call with our experts.