Repeat Purchase Rate is the percentage of customers who come back to place another order.
100% means every customer comes back again. 0% means that no one comes back.
According to industry figures, an average store's repeat purchase rate should be around 27% - 32%. In other words, for every 100 purchases you should expect to see 27 - 32 later purchases from those customers. That might be in a few days, a few months, or years later. You'd need to look at your Customer Purchase Latency to estimate when the next purchases will happen.
Subscription products will have much higher repeat purchase rates depending on how automatic the orders are processed.
Repeat Purchase Rate also applies to re-orders. So if you have a 30% rate that means 30% of your first time customers will buy a second time and of those second orders, another 30% will buy a third time, etc. This is why optimizing your rate can have significant impacts on your total sales.
Lowering repeat purchase rates in later stages of a customer lifecycle shows customer disengagement and eventually defection.
How to improve your Repeat Purchase Rate
To improve your repeat purchase rate, you need to increase trust with your customers and market to them regularly so they remember you when they are ready to order.
Effective tactics include:
- Regular email marketing that provides them value (e.g tips, entertainment)
- Regular email marketing about sales and discounts
- Loyalty and rewards programs
- Including freebies or bonuses with their orders
- Offer subscription versions of your products
Eric Davis
Segment your customers to find the diamonds in the rough
Not all customers are equal but it is difficult to dig through all of your data to find the best customers.
Repeat Customer Insights will automatically analyze your Shopify customers to find the best ones. With over 150 segments applied automatically, it gives your store the analytics power of the big stores but without requiring a data scientist on staff.