Analyzing Customer Order Value Distribution

Analysis > AOV > AOV Bins > YoY Variance

Summary

The report helps you understand how your customer's spending habits break down across different order value ranges. Additionally, the report provides insights into the impact of discounts and shipping costs on these bins, which can reveal how these factors influence spending.

Questions the report answers

• Where do most of my orders fall in terms of value?
• What percentage of orders in each AOV bin are driven by discounts and shipping costs?

How to read the report

Understanding the breakdown by AOV Bins

The report splits customer orders into AOV Bins, these bins (e.g., £0-20, £20-30, £30-40) represent different levels of customer spending per order, helping you identify where the majority of your sales volume is coming from.

You can identify which AOV bin is most and least active by accessing the concentration of the number of orders in a specific AOV bin. Further, you can understand the growth or decline in the number of orders for each AOV bin and compare it to the prior year by analyzing the YoY Variance %.

If certain AOV bins show significant growth or decline in orders for specific AOV bins could signal changing customer preferences.

Analyzing the Discount and Shipping Costs

% of Discounted Orders shows the proportion of orders in each AOV bin that had discounts and % of Shipping Cost-Linked Orders shows the proportion of orders in each AOV bin that had associated shipping costs.

1. High % of Discounted Orders with High AOV Bin
   • Shows customers who are willing to spend more per order are influenced by discounts, especially for higher-priced items.
   • If high-value orders are driven by discounts, it may suggest that customers only make larger purchases when discounts are available.
2. High % of Discounted Orders with Low AOV Bin
   • Shows that low-value orders are driven by discounts, which may suggest that discounts are helping to convert hesitant buyers, leading to more sales but smaller order values.
3. Low % of Discounted Orders with High AOV Bin
   • Shows that customers purchasing higher-value orders are less price-sensitive and are willing to pay full price.
4. Low % of Discounted Orders with Low AOV Bin
   • Customers in these lower bins are making smaller purchases without being driven by discounts, suggesting they may not be highly price-sensitive, there may be an opportunity to increase their spending with the right incentives.
5. High % of Shipping Cost-Linked Orders with High AOV Bin
   • Customers making large purchases may be less sensitive to shipping fees, likely because they perceive the order value as justifying the extra cost.
6. High % of Shipping Cost-Linked Orders with Low AOV Bin
   • Shipping costs might be preventing customers from increasing their order value, as they may feel the total cost is too high.
7. Low % of Shipping Cost-Linked Orders with High AOV Bin
   • This might be because of free shipping as a standard when making higher-value purchases.
8. Low % of Shipping Cost-Linked Orders with Low AOV Bin
   • Customers in this AOV bin are likely very sensitive to shipping fees, which could prevent them from completing purchases if they are required to pay for shipping.

Glossary

Number of Orders

Total count of orders placed by customers. It is calculated by counting the number of orders.

Average Order Value (AOV)

The average amount a customer spends per order. It is calculated by dividing the total sales amount by the number of orders.

YoY Variance %

The percentage change in a metric between this year and the same period last year. It is calculated by dividing the difference between the metric of the selected year and the same period prior year by the metric of the same period prior year.

% of Discounted Orders

The percentage of total orders that included a discount. It is calculated by dividing the discounted orders by the total number of orders.

% of Shipping Cost-Linked Orders

The percentage of total orders that included shipping. It is calculated by dividing the discounted orders by the total number of orders.