Having a high number of returning customers is a dream of every eCommerce business. It means they love your product and will purchase it again and again, bringing more money to your online store!
What’s a good returning customer rate?
Every brand or online store has a different idea of a good return customer rate. It depends on your niche, product, price, and competition. For example, consumable products like food, body care, hygiene products have a higher repeat purchase rate than bags, shoes, and electronics. Cheaper eCommerce products tend to have a better repeat customer rate than premium products. Nevertheless, it doesn’t mean that a good repeat customer rate of inexpensive products guarantees more revenue for your online store. You need to have healthy margins, high AOV, and a high conversion rate 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 average repeat customer rate for eCommerce
1. Retarget your customers
Often online stores focus on bringing new customers and totally forget about those who made a purchase already. It’s a good idea to set aside an ad spend budget to retarget people who already purchased from you. It will serve as a reminder for them to visit your store and purchase again. You can sweeten the offer by giving them a special discount for returning customers only.
It can be an extremely effective strategy to increase your average repeat purchase rate, but be mindful of your customer avatar. You don’t want to overdo it and bombard them with the online ads when they are not ready yet to make another purchase.
2. Build and Nurture Your Email List
Sending targeted emails to drive repeat purchases is a time-proven eCommerce strategy. However, don’t flood your customer’s inbox with daily newsletters that have no value to them as they may simply unsubscribe or put your emails into a spam folder. You need to optimize the frequency to match your customer persona and deliver value.
However, there are 2 time-proven newsletter types you should send (always!!!). One of them is Welcome Email Series that are triggered when someone subscribes to your newsletter. It’s a good idea to include a special discount code and introduce your brand story. Another type is Abandoned Cart Series that are triggered when the customer doesn’t complete the purchase. On average, abandoned cart emails result in a 4.64% conversion rate compared to 0.17% of the average for newsletters.
A Winback email can be a great way to retain your customers. It serves as a reminder to come back and discover new collections or products that they may like. It’s a good idea to offer some sort of incentive (discount or a gift), which will surely increase your average repeat customer rate.
3. Loyalty program
A loyalty program is a holy grail for increasing returning customer rates for eCommerce. On top of that, it helps you increase the purchase frequency and AOV (average order value). Loyalty and reward programs foster customer engagement, so they choose you over the competitors increasing repeat purchase rate. By offering redeemable points and gifts, you can increase purchase frequency and build brand loyalty. Once you establish an emotional connection with your customer through the loyalty program, you can introduce a referral program, it will not only bring more customers to your online store but will motivate referees to spend their points.
Personalization can help you tailor your messaging and offers to individuals’ unique preferences based on their purchase or on-site behavior. There are 2 main types of eCommerce personalization you can offer.
Personalized product recommendations – If you are using Shopify, there are plenty of apps that can offer product personalization on your online store. For example, you can show your returning customers products they viewed before or products from the same category as they purchased before. Such activities will raise the odds of them purchasing from your again.
Personalizing emails – If you are using Klaviyo for your email marketing, it’s a good idea to turn on personalization for the product feed in the emails. More personalized offers your customers get, the chances are they will purchase from your again.
5. Buy now, pay later
By now, pay later can increase your eCommerce repeat customer rate by up to 80%! On top of that, you can increase the conversion rate and average order value of your online store significantly. Buy now, pay later system is convenient, transparent, and flexible. It boosts trust and fosters customers loyalty. As a result, customers are more eager to come back and buy from you again!
Gamification does miracles, you can see some of our case studies here. 2 types of gamification that can increase the repeat customer rate: long-term and short-turn gamification. 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 enjoy gamification as well. You can use apps like Optimonk to offer games like Spin the wheel or scratch cards.
Longer-term gamification usually implies obtaining certain incentives for repeat behavior, such as loyalty programs that we mentioned before.
Offering a subscription in your online store can really make 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 make sure 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
Humans are visual creatures. Social media plays a big 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
Push notifications are messages that show up on the users’ screens while they are connected to the Internet. It allows eCommerce store owners to quickly share offers or other important information. It’s super easy for consumers to subscribe and unsubscribe from push notifications. Since not so many online stores use this feature, you still have a chance to stand out and grab customers’ attention online.
It is important to personalize your push notification to show only highly relevant information that your customers will like. For example, PushNinja monitors users’ previous activities, purchases, location, and taste and, sends push notifications to the appropriate audience, which is more likely to engage and come back to your site.
10. Limited-time products
Limited-time products create a sense of urgency. By giving exclusive priority access to people who purchased from your before, you can increase returning customer rates and brand loyalty. However, you have to be careful with the duration of such a campaign. You don’t want it to be too long because customers will feel cheated. If you don’t want (or cannot) to create new products, you can always create limited-time bundles, gift wrapping, or cross-promotional kits (think Adidas and IVY PARK).
11. Ask for feedback
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, they ask customers to DM them and share their experience with the brand, in return customers get a surprise discount that they can use towards their next purchase. This is a genius marketing strategy that not only allows Nuud to establish a connection with its customers but also increases 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 the product images with the review. You will see tremendous growth in the repeat purchase rate! In eCommerce, reviews play a key role in building customer trust!
Creative competitions can be a great way to stimulate repurchasing behavior for eCommerce! 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 give the rest of the competitors’ discounts that they will surely use!
14. Search Engine Marketing
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 simply advertise a secret discount. To do so, you will need a separate landing page for your eCommerce store featuring a secret discount that is only available to people coming from search engine ads. It will be a true delight and surprise to your customers, who are likely to purchase from you again.
15. Voice commerce
Voice commerce is a trending technology. 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. It means 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 very powerful strategy for generating repeat purchases that really works! There is an element of surprise and delight that most of us would enjoy.
17. Add-on services
You want your customers to feel special, so they could establish that emotional connection with your brand and come back to you to purchase again. For example, Luxe Botanics offers a free Esthetician consultation to support their customers on their 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 just 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, increasing repeat purchase rate for your online store!