## Basket Size: Meaning & Definition

Which products are customers buying? How many items on average do they put in their cart before checking out? These are important questions for businesses looking to drive better sales.

Basket size refers to the size of an order that a customer places. In other words, it is the average number of products that a business sells in one transaction.

Tracking purchasing patterns by assessing the basket size allows stores to see how the order value has increased or decreased over time. Thus, instead of relying on guesswork, they can make data-driven sales forecasts.

In addition to providing data about how many items customers purchase in one go, insights into the basket size also allows stores to learn how engaged their customers are. Accordingly, they can personalize the buying process and meet customer preferences to ensure loyalty.

## How To Calculate the Basket Size

To calculate the average basket size, divide the total number of units sold by the total transactions for a given period.

Average basket size = Total units sold / Total transactions in the same period

Suppose that a store sells 300 units in 30 transactions. This means the average basket size is ten – indicating that on average, customers bought ten items per transaction. Importantly, this does not mean that every customer bought ten items each. Rather, it is the generalized trend that informs a business how much a customer is likely to purchase from them on average.

Generally, the larger the basket size, the better it is. A larger basket size indicates that a consumer buys from a store.

However, aspects like competitive pricing and deals are also important, as they affect how much money a customer spends on one order. Thus, to get a fuller picture, the average order value (the average spending of a customer on one order) can be considered alongside the basket size.

## Why Is Knowing Basket Size Important?

Knowing the average basket size is helpful for stores for many reasons, including:

• It promotes better inventory management. With data on what sells more and what does not sell is available to stores, they can make smarter decisions about when to replenish stocks. This may also prevent stockouts of popular products and reduce overstocking of unpopular items.
• It allows stores to understand consumer behavior. Knowing what, how much, and when customers buy more from the store can help businesses match clients’ buying preferences. They can also gather demographic data to make their strategies more targeted to different consumer bases.
• It enables stores to track the average order value. This refers to the average amount of money a customer spends for each order placed. In turn, this data offers insights into how well the sales and marketing strategy has performed, and whether customers are responding well or not.

## How To Improve Basket Size

Some recommended ways to improve the basket size are:

1. Offer competitive pricing: Product pricing is one of the top factors to impact the average basket size. Analyzing competitors, finding a balanced profit margin, and repricing to offer better value to customers is likely to improve the basket size.
2. Offer deals and discounts: When items are being sold at a cheaper rate than regular, the basket size tends to increase. Any deals, discounts, promotions, or clearance sales may compel customers to buy more than they usually would.
3. Personalize product recommendations: Customers shop more when they find products relevant to their needs. Assessing the basket size gives stores insights into what their customer wants. They may leverage this information wisely to personalize recommendations, offer try-on experiences, or bundles of favorite products.
4. Improve the store layout: Seeing an item in the right place at the right time motivates people to buy things which they may not have purchased otherwise. Think of supermarkets that often place small-value items like candies and gum sticks near the checkout station. An optimal store layout is likely to boost the average basket size.
5. Provide omnichannel retail: As more consumers turn towards some level of eCommerce adoption in their shopping, stores that offer omnichannel retail will hold consumers’ interest. Thus, a store may allow online order placement and pick-up in store or offer free doorstep delivery for products purchased online.