Which is considered a key performance indicator (KPI) for retail?

Average Order Value (AOV) is a critical key performance indicator (KPI) for retail because it directly reflects the average amount a customer spends per transaction. Understanding AOV helps retailers gauge customer spending behavior and assess the effectiveness of pricing strategies, promotions, and product placement. By monitoring AOV, businesses can identify trends, enhance product offerings, and implement strategies aimed at increasing sales revenue, such as bundling products or upselling.

In the context of retail, while metrics like Average Time on Site, Customer Satisfaction Score, and Organic Search Traffic provide valuable insights, they do not directly measure financial performance in sales transactions as AOV does. Average Time on Site can indicate customer engagement but doesn’t equate to sales. Customer Satisfaction Score reflects how customers feel about their experience but doesn't directly link to monetary transactions. Organic Search Traffic indicates the visibility of the website but doesn’t ensure that visitors are making purchases. Therefore, AOV stands out as a focused measure that aligns closely with revenue generation in the retail sector.