Within the first year, new e-Commerce customers spend approximately $154 with retailers. Most (69%) of this amount is spent within the first 30 days, according to research from RJMetrics. However, only 32% of consumers place a second order with retailers within that year.
Marketers need to respond by increasing focus on retaining customers and maximizing customer lifetime value (CLV). CLV is the sum of all purchases a customer makes in a given time period, with the report calling it “the most important metric for understanding your business.” In fact, the fastest-growing e-Commerce retailers acquire a CLV 79% higher than their peers after a full year.
RJMetrics released the 2015 Ecommerce Buyer Behavior Report, which includes data from 176 e-Commerce retailers and 18 million customers, in order to uncover online shopping behaviors and trends.
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The report concluded that retailers’ overall dependency on customer acquisition varies by their vertical. For example, houseware/home and computer/electronics retailers rely more significantly on new customers spending a large amount of money up front, while food, drug and mass merchants rely more on repeat purchases growing over time.
E-Commerce retailers can use this insight to make predictions about which customers will turn into big spenders, and they can segment this data further by analyzing:
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Product category;
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Acquisition source;
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Number of items in each order; and
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Days between orders.
The fastest growing companies are improving CLV because they excel at acquiring more high-value customers and increasing the value of their existing customers. Additionally, purchase rates increase steadily with each incremental purchase during the first year. While the likelihood of a consumer making a second purchase after a first is relatively low, the likelihood of a third purchase jumps to 53%, and increases to 64% and 70% on the fourth and fifth purchases, respectively.
Click here to access the complete report.
