Head of Direct Marketing, Reteno
September 4, 2023
In e-commerce, success isn't just about making a sale — it's also about turning customers into loyal buyers. If you are looking for ways to increase your repeat purchase rate and build a tribe of devoted customers, keep reading.
This article looks into a collection of the most effective strategies tailored to boost your repeat purchase rate. You will also find out how e-commerce market leaders use these strategies to propel businesses forward and cultivate lasting customer loyalty.
A repeat purchase refers to a scenario in which a customer makes a subsequent purchase from a business or brand after their initial transaction. Repeat purchases signify positive outcomes for the e-commerce business, as well as customer satisfaction with the purchased products and the shopping experiences they had.
Repeat purchase rate (RPR), or repurchase rate, is a metric used to measure the percentage of customers who've made more than one purchase within a specific time frame. This metric is crucial for evaluating the effectiveness of an overall retention strategy.
Unlike the customer retention rate, which measures overall customer loyalty and engagement, repeat purchase rate zooms in specifically on the behavior of customers who have made repeat purchases.
The average repeat purchase rate in e-commerce varies depending on the business model and industry. A reasonable benchmark for a healthy repeat purchase rate in e-commerce could range from around 20% to 40%.
In order to calculate the repeat purchase rate, you need to follow these steps:
Choose a specific time period for which you want to calculate the repeat purchase rate. Common timeframes include monthly, quarterly, or annually.
Count the number of unique customers who made at least one purchase during the chosen period. Then, calculate the number of customers who made more than one purchase during the same period.
Finally, use the following formula to calculate RPR:
Repeat Purchase Rate = (Number of Customers with Repeat Purchases / Total Number of Unique Customers) × 100
For example, if you had 500 unique customers and 100 of them made more than one purchase in the given time period, repeat purchase rate would be:
RPR = (100 / 500) × 100 = 20%
This means that 20% of your customers made multiple purchases within the chosen time frame.
Although RPR provides important insight into customer behavior, marketers often need to use additional metrics for a more comprehensive understanding of repeat purchases. For example, it can be beneficial to analyze more granular data, such as the frequency of repeat purchases, the average time between purchases, and customer segments with the highest repeat purchase rates.
Since encouraging repeat purchases is crucial for sustainable growth and ensuring high customer lifetime value, we have prepared seven effective approaches that you can implement in your marketing strategy. So read on to boost your repeat purchase rates and foster long-term customer relationships.
The post-purchase communication is critical for fostering a long-term relationship between the customer and the brand. This phase of the customer journey is critical for building customer loyalty and increasing the chances of repeat purchases. It not only helps build trust but also keeps your brand in the customer’s mind.
Post-purchase engagement involves the interactions that take place after a customer purchases from your e-commerce store. There is a variety of post-purchase engagement practices you may want to consider. Apart from basic order confirmation and
shipping and delivery updates, you can use “thank you” notifications, and requests for reviews and feedback. Even more advanced practices may involve sending relevant educational content.
One e-commerce brand that shows effective post-purchase engagement is Warby Parker, a popular eyewear retailer known for its direct-to-consumer model and emphasis on customer experience. For example, after a purchase, Warby Parker provides educational content about eyewear care, lens cleaning, and tips for choosing the right frames. This content adds value to the customer's experience and ensures the longevity of their purchase.
Your post-purchase communications can also include suggestions for complementary products. By analyzing the customer’s purchase history, it is easy to suggest what else the customer could be interested in and provide relevant recommendations. For example, if a customer bought a camera, you could recommend accessories or photography courses.
Amazon has mastered the art of leveraging user data to provide highly relevant and effective product recommendations. The e-commerce giant showcases a section on product pages that displays products other customers have purchased along with the selected item. This feature taps into social proof and encourages cross-purchases.
Another efficient strategy is implementing loyalty programs that reward customers for repeat purchases. Points, discounts, exclusive offers, or early access to new products can encourage customers to return.
The approach isn’t new, and its effectiveness has been proven through the years. Loyalty programs tap into the psychology of reward and recognition. People feel a sense of achievement and satisfaction when they accumulate points or earn customer rewards, which can create positive feelings associated with the brand.
Some examples of effective loyalty programs are Amazon Prime, Starbucks Rewards, and Sephora Beauty Insider.
Remarketing and retargeting are powerful digital marketing strategies that target users who have previously interacted with your website or brand. These strategies help re-engage customers who have previously bought from you.
You can use online ads to target previous customers with relevant products they've shown interest in. This can remind them of your brand and products, increasing the chances of a repeat purchase.
Farfetch is an e-commerce brand that effectively utilizes remarketing and retargeting strategies in the mobile e-commerce space. The luxury fashion and beauty product retailer effectively re-targets users on social media platforms, ensuring that the ones who have interacted with their brand on mobile continue to see relevant ads on platforms like Instagram and Facebook.
Win-back campaigns are designed to increase the number of returning customers by re-engaging those who have become inactive or haven't made a purchase in a while. These campaigns aim to recapture their interest and encourage them to start shopping with your e-commerce store again.
Win-back campaigns are often executed in e-commerce as mobile push notifications and emails with product recommendations as well as discounts, prompting customers to visit the app and explore new or discounted products.
The e-commerce brand that excels in implementing win-back campaigns effectively in e-commerce is Sephora. For example, Sephora provides compelling reactivation offers to help customers return to their mobile app or website. These offers usually include freebies, discounts, or exclusive deals.
Seasonal offers create a cycle of engagement, purchase, and anticipation that fosters customer loyalty and encourages repeat interactions with your e-commerce store. By consistently delivering value and memorable experiences, you can establish a positive feedback loop that drives higher repeat purchase rates over time.
Seasonal offers are promotional campaigns that capitalize on specific times of the year, such as holidays, seasons, or special occasions, to attract and engage customers. These offers leverage the excitement and spending tendencies associated with these times to drive sales and encourage repeat purchases.
A great example of a mobile e-commerce company that implements seasonal offers successfully is ASOS, a popular online fashion retailer. ASOS is known for effectively using seasonal promotions and offers to engage customers and drive repeat purchases. So, don’t miss your chance to drive repeat purchases during Summer Sales, Black Friday, and other relevant seasons.
Personalization stands behind all successful customer retention strategies. A holistic analysis of customers' browsing and purchase history can give you a cutting edge over competitors in terms of providing offers and messages that align with your customers' needs. With this data, you can make the shopping experience more convenient and offer more relevant products for your users, increasing the chances of repeat purchases.
Personalization in e-commerce is about tailoring interactions, recommendations, and experiences that meet individual customer preferences and needs. By making customers feel understood and valued, you improve customer satisfaction and, therefore, increase the chances they will buy from you again.
Personalization in e-commerce apps can be effectively achieved with the help of specialized tools and technologies that leverage customer data, behavior analysis, and automation.
One of the tools able to boost the success of your e-commerce business is Reteno. Our solution for mobile retention empowers businesses to tailor user experiences, product recommendations, and communication to individual customer preferences.
With Reteno, you can automate push notifications and in-app messages to ensure efficient post-purchase communication and, as a result, increase the number of repeat users. Smart segmentation, personalized messages, and automated marketing campaigns will help you increase in-app purchases and drive your m-commerce business success.
Don't miss out on the opportunity to build lasting customer relationships, boost revenue, and take your e-commerce business to new heights. Supercharge your e-commerce strategy with Reteno.
Repeat purchase rate plays a crucial role in determining and enhancing return on investment (ROI) for an e-commerce business. To drive repeat purchase rate, implement effective post-purchase engagement, personalized recommendations, loyalty programs, and targeted win-back campaigns to foster customer loyalty and encourage repeat transactions.
It’s crucial to remember one thing before utilizing the strategies described in the article. The best thing you can do to encourage repeat purchases is to ensure great service for your e-commerce customers. High-quality service is the cornerstone of fostering customer loyalty and driving repeat purchases.
Customers feel valued and connected to a brand when they have a positive and seamless experience characterized by helpful support, efficient problem-solving, and personalized attention. This emotional connection, coupled with trust built through exceptional service, compels repeat customers to return to the store for future purchases, contributing to long-term business success.
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