Let's start with item price. Item price is the price of a single unit of a purchased product.
Average Item Price is the total price of all items sold, divided by the total number of items sold. It's closely related to Average Purchase, which makes up sales.
Average Item Price is made up of 2 KPIs:
Total price of items sold (= total item price)
Total number of items sold (= units sold)
Formula: Average Item Price = Total Item Price ÷ Units Sold
Like Unit Per Transaction, Average Item Price is a KPI that affects Average Purchase. If Average Item Price rises, Average Purchase rises too — even if Unit Per Transaction stays flat or increases.
On the other hand, if Average Item Price falls, Average Purchase can fall even if Unit Per Transaction increases.
This is why Average Item Price has such a close relationship with Average Purchase, one of the KPIs that makes up sales. Keep an eye on your store's KPIs and put them to work in your strategy!
