The repeat purchase rate is an essential indicator of customer satisfaction and customer loyalty in Ecommerce. It measures the percentage of repeat purchases a consumer makes in a given time.
Online store owners strive to provide the best experience possible for every customer. The ability to welcome and serve returning customers is an integral part of maintaining a high level of customer satisfaction. The more customers that return to your store, the more opportunities there are to build relationships and demonstrate the value of your products.
What's a good returning customer rate?
A "good" return customer rate means a different thing for every online store. It depends on your niche, product, price, and competition. For example, think about the items you regularly buy, such as consumables like food and hygiene products. You buy them more often than you shoes, bags, and electronics. It means that consumable products have a much higher repeat purchase rate.
Cheaper Ecommerce products tend to have a higher repeat customer rate than premium products. Nevertheless, stores with a high repeat customer rate selling inexpensive products don't necessarily make more money than premium stores with fewer repeat customers. Healthy margins, high AOV, and a high conversion rate are needed to capitalize on your returning clients.
What is a good average repeat purchase rate?
The average repeat purchase rate for eCommerce ranges from 20 % to 40% in most cases, with 27% being a sweet spot ( according to Shopify).
How to increase the average repeat customers rate for eCommerce
1. Retarget your customers
Many online stores focus on bringing new customers and completely ignore those who have already made a purchase. Set aside a budget for retargeting those who have previously purchased from you! It will serve as a reminder to them to revisit your store and shop. Retaining and motivating your customers requires generosity.
The best way would be to offer new or recurring promotions for returning customers. If you do that, they'll keep coming back. However, please don't overdo it. You don't want to bombard your customers with too many ads and promotions when they are not ready to buy yet.
2. Build and nurture your email list
Sending targeted newsletters can help you drive repeat purchases. It has been a time-proven Ecommerce strategy that can encourage customers to buy more often. However, it has recently come under scrutiny due to privacy issues. So, avoid spamming your customers' inboxes with daily newsletters with no value. They may unsubscribe or put your emails into a spam folder. It would be best if you optimized the frequency to match your customer persona.
- Nevertheless, there are two newsletter types you should send (always!!!). One is the Welcome Email Series, triggered when someone subscribes to your newsletter. Including a unique discount code and introducing your brand story is a good idea.
- Another type is the Abandoned Cart Series, triggered when the customer still needs to complete the purchase. On average, abandoned cart emails result in a 4.64% conversion rate compared to a 0.17% average for newsletters. The reason is that the customers see the abandoned cart emails after adding products to the cart, which shows their interest in the product. Thus, the customers are more likely to make a complete purchase.
- A Winback email can be a fantastic way to retain your customers. Through Winback emails, you can remind customers to come back to shop again. For many online retailers, sending winback emails is an effective way to give customers a heads-up about new collections, products, and price updates. Sometimes, it is a great way to nurture your customer relationships. Add an incentive (discount or a gift) to your winback email, which will likely increase your average repeat customer rate.
3. Loyalty program
Aparicio et al. and García-Jurado et al. studies confirm that loyalty and reward programs can increase user engagement and the number of returning customers. As a result, the purchase frequency grows as well. However, you need to consider your customers' desires to make your loyalty program effective and increase repeat purchase rates. Therefore, your loyalty program must be fun, easy to use, and offer exciting prizes and discounts. There needs to be more than a traditional 10% discount. Fun experiences and exciting prizes will help establish an emotional connection with your customer, who will return for more and will recommend you to their friends.
Personalization can help you create unique experiences and adapt your messaging and offers to individual customers on your site. You can offer two main types of Ecommerce personalization to your shoppers.
- Personalized product recommendations - If you are using Shopify, plenty of apps can offer product personalization on your online store. For example, you can show your returning customers products they looked at before or products from the same category as they purchased from you previously. Such products will raise the odds that they will buy from you again.
- Personalizing emails -If you send newsletter campaigns using Klaviyo, ensure personalization for the product feed. This way, your customers can receive relevant promotions and offers with a high likelihood of purchase. Therefore, the engagement rate and repeat purchases will increase.
5. Buy now, pay later
"Buy now, pay later" is a marketing strategy that allows customers to buy products in advance and pay the full cost in parts. Often, customers will get a gift or other incentives with the purchase. It can increase your repeat customer rate by up to 80%! In addition, "Buy now, pay later" can massively increase the conversion rate and average order value. You will also see a boost in trust and customer loyalty. As a result, customers are more eager to return and purchase from you again.
If you want to boost repeat sales, try the gamification techniques discussed in these case studies. We recommend two game techniques: long-term and short-turn. A great example of effective short-term gamification is the Cup Flip Game from Starbucks. It was a month-long digital game where participants had to flip in a Starbucks cup. Users could share their scores, earn points, and win vouchers. The engagement rate was a whopping 90%. Smaller eCommerce brands and generic online stores that use Shopify can also enjoy gamification to increase the repeat customer rate. You can use apps like Optimonk to offer games like Spin the wheel or scratch cards.
Longer-term gamification usually implies obtaining specific incentives for repeat behavior, such as loyalty programs that we mentioned before.
7. Subscription to boost recurring sales on autopilot
Offering a subscription makes a difference in your returning customer rate. It works particularly well for food-related and skincare stores. Fashion and accessories stores can also offer subscriptions to their users, such as bi-yearly mystery boxes. However, you want to ensure you have enough SKUs to avoid sending repetitive items. Subscription is the key strategy to generate long-term eCommerce sales.
8. Social media-only deals to build brand loyalty
Humans are visual creatures. Social media plays a significant role in increasing the repeat purchase rate for eCommerce. You want to post more product videos followed by deals available to social media subscribers only.
9. Browser push notifications for engagement
Push notifications are messages that show up on the users' screens while they are online. It allows eCommerce store owners to share offers or other vital information quickly. It's super easy for consumers to subscribe and unsubscribe from push notifications. Since not so many online stores use this feature, you can stand out and grab customers' attention online.
Personalizing your push notification to show highly relevant information that your customers will like is essential. For example, PushNinja monitors users' previous activities, such as purchases, locations, and tastes. It then sends the push notifications to the appropriate audience, who will likely engage and return to your site.
10. Limited-time products to build a sense of urgency
Limited-time products create a sense of urgency. You can increase returning customer rates and brand loyalty by giving exclusive priority access to people who purchased from you before. However, you must be careful with the duration of such a campaign. You want it to be a short time because customers will feel cheated. Suppose you want to avoid creating new products. You can always create limited-time bundles, gift wrapping, or cross-promotional kits (think Adidas and IVY PARK).
11. Ask for feedback to build relationships with your customers.
Ask your customer for feedback about your product or online store and reward them with a discount! A great example to follow is the Nuud brand. Nuud team asked customers to DM them on social media and share their experience with the brand. In return, customers get a surprise discount that they can use towards their next purchase. This genius marketing strategy allowed Nuud to connect with its customers and increase the returning customer rate.
12. Incentives reviews
Offering tiered discounts for reviews is a great strategy to make people buy more. For example, you can offer a 15% discount to customers who share their reviews on your online store or 20% to those who share their user-generated product images with the review. You will see tremendous growth in the repeat purchase rate! In eCommerce, reviews play a crucial role in building customer trust!
Creative competitions can be a great way to stimulate repurchasing behavior! For example, if you have an online t-shirt store, you can run a competition to select the best look. You can reward the winner with a special prize and reward the rest of the participants with discounts they will surely use!
14. Search Engine Marketing to delight and surprise your customers.
Imagine if your customers google for "alternatives" for your brand and go for the other store. There is a way to stop it. You can advertise a secret discount. To do so, you will need a separate landing page for your eCommerce store featuring a secret discount only available to people from search engine ads. It will be a delight and surprise to your customers, who will likely purchase from you again.
15. Voice commerce
Voice commerce is a trending technology that can increase your repeat customer rate fast. More people use Alexa to shop online and buy essential reusable products. According to Blue tag, 30% of people who buy reusable products via voice repeat those orders. You can significantly increase your repeat customer rate by enabling voice shopping!
16. Physical discount vouchers
Include a physical voucher offering a discount code for the next purchase. It's a simple yet potent strategy for generating repeat purchases. There is an element of surprise and delight that most of us would enjoy.
17. Add-on services to make customers feel special.
Do you want to increase your average customer retention rate? Then make them feel valued. In return, they will establish that emotional connection with your brand and return to you to shop again. For example, Luxe Botanics offers a free Esthetician consultation to support their customers on the journey to perfect skin. This is a great way to build customer loyalty and increase returning customer rates for your eCommerce store. Such an approach is not exclusive to skincare brands. If you sell food, you can share exclusive access to recipes. Fashion brands could offer a free stylist consultation. The possibilities are endless.
There are many more ways to increase a returning customer rate; you need to listen to your customers and delight them with an extraordinary digital experience. And this is where we come in. Book a free call, and let's discuss how we can help improve your online store and make your customers come back for more!
GARCÍA-JURADO, Alejandro, Mercedes TORRES-JIMÉNEZ, Antonio L. LEAL-RODRÍGUEZ and Pilar CASTRO-GONZÁLEZ. 2021. ‘Does Gamification Engage Users in Online Shopping?’ Electronic commerce research and applications 48, 101076.