What Is Average Ticket?
Average ticket is a metric that provides details on the average amount of sales per customer. Statistically, the average ticket is computed as the mean size and is calculated by adding total sales over a specified period of time and dividing by the number of customers.
It is used by a range of businesses when analyzing business performance, sales activity, and profitability.
- Average ticket size is a measurement that looks at the dollar amount of sales per customer.
- Computing average ticket size is computing the mean, which is calculated as the total sales divided by the number of customers.
- Many companies use average ticket calculations in their sales and profitability analysis.
- Brokerage firms, credit card vendors, and retailers often track the average ticket size measurement.
Understanding Average Tickets
The average ticket is a business-performance metric that helps companies when analyzing sales and sales trends. It is often reported by retail companies, credit card vendors, and brokers/dealers. The term "ticket" refers to a sale to a customer, but does not necessarily involve paper or cardboard slips like concert, plane, or theater tickets.
The average ticket size measurement helps businesses understand sales trends and their overall profitability. Businesses will vary in the time frames they use for calculating average ticket sales. Generally, other statistics around the average ticket are also reported to help provide a range such as the lowest ticket, highest ticket, and median ticket.
Examples of Average Ticket Usage
Retail companies such as Home Depot, for example, report average ticket size metrics in their financial disclosures. The company’s average customer ticket was $74.32 for fiscal year 2020, up from $67.30 in 2019.
Credit card businesses also follow average ticket when analyzing credit card transactions by customers. A credit card company’s average ticket refers to the average amount charged on credit by a customer.
For example, American Express reports one of the highest average ticket levels across the credit card industry. In 2020, the company reported average annual basic card member spending by customers globally of $16,352. The average fee per card is also another closely followed metric for credit card companies. In 2020, American Express reported an average fee per card of $67.
Broker/dealers calculate average ticket size when analyzing trade data by customer. Broker/dealers will often follow average ticket size per client on a daily basis, reporting average trades in dollar amounts per day. For example, in 2020, Charles Schwab reported that their daily average revenue per trade was calculated at $2.16, down from $4.01 a year earlier as fee compression accelerates due to competition from online brokers offering free trading.
Generally, broker/dealers only operate on business days, which gives them fewer active days for calculating transactions and revenue than other retail businesses.