It is the average amount spent by a customer when he or she places an order on your website or app. The CRO strategy of many companies is to increase AOV either by getting people to add more items to their carts, or by enticing them to add more expensive items to their carts. You can also use AOV as a proxy for determining whether you are bringing the right customers to your site, since ideally you would like to attract more customers with a higher AOV.
Total revenue / Number of orders = Average order value