How can I calculate the impact of free shipping on my average order value and overall sales?

Asked 6 months ago

How can I calculate the impact of free shipping on my average order value and overall sales?

Luciano Cash

Saturday, August 26, 2023

To calculate the influence of free shipping on your Average Order Value (AOV) and total sales, follow these 8 simple steps:

  1. Gather data on order values and sales before and after implementing free shipping.
  2. Categorize orders into those with and without free shipping.
  3. Calculate AOV by summing up the order values and dividing them by the total number of orders in each segment.
  4. Determine the overall sales impact by calculating the percentage change in total sales after introducing free shipping.
  5. Compare AOV and sales data before and after free shipping to determine changes.
  6. Utilize statistical tests to determine if changes are statistically significant.
  7. Factor in qualitative insights from customers regarding their perception of free shipping.
  8. Monitor the trend over an extended period to identify consistent patterns.

Based on the analysis, decide if free shipping positively affects AOV and sales.





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