Inflation eroding growth metrics

I had an interesting thought.

Average Order Value (AOV) is one measuring stick that Shopify stores use to measure growth. When it's going up, then the store is growing and management is making the right decisions, right?

I wonder how many stores are adjusting AOV changes for inflation though. Are you?

If your AOV goes up 5% in a year but inflation went up 8%, you didn't grow. Your order sizes actually dropped 3%, which could explain for that odd feeling of "where did the money go?"

Inflation hasn't mattered much previously but in recent years, high costs and inflation have moved to the forefront. It seems to me that setting growth goals on metrics like AOV need to be measuring the real rates (inflation adjusted).

Otherwise you might be led to make the wrong decisions about your store growth. Decisions which will come back to bite you in the future.

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Eric Davis

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Topics: Average order value Growth Inflation

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