Terms of Trade · Edition 2: The trading pack
Average order value
Definition
Total order revenue divided by the number of orders in a period. An average, with everything an average conceals: one large basket and nine small ones report the same number as ten medium ones.
Field note
AOV is the melting pot where a single pair of socks holds three laptops and a television to account.
Board question
What does the distribution look like beneath the average, and which end of it moved this quarter?
Applied through
The Review measures against order value; Commercial Discipline in the Cat’s Whiskers asks whether the basket-building spend is going where the baskets are.
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