❔How do I calculate Average Order Value (AOV)?

We have updated our AOV calculation so you can now incorporate the sale of new products more explicitly in the DTC - OTP tab. Previously we just used Shopify AOV data to predict future AOVs in rows 42 and 87.

Step 1: Navigate to the yellow DTC - OTP tab in the SmartModel™️

The new method is to adjust “Attach %” which simply describes the number of each product (in units) in proportion to overall orders.

Step 2: Attach % = 100% would suggest 1 unit per Order, while 200% would suggest 2 units per order.

These rates for historical (legacy) products are calculated based on Shopify data for your reference while forecasts require your input based on expectations of take rates on those new products.

Additionally, overall attach rates for legacy products will likely decrease after launch of new products given the size of those AOVs so it may be prudent to trend down those legacy rates relative to historical trends.

Step 3: Repeat these attach % inputs for First-Time and Returning Customers.

These rates will then be used in combination with GMV or prices per unit by product to estimate overall AOVs for First-Time and Returning customers.

💡 Pro Tip: The units calculated for each section will also calculation COGS on the DTC tab