Most studies estimate that e-commerce companies typically see repeat purchase rates between 20% and 40% (percentage of purchases coming from repeat customers versus new customers). The latest available data from 2020 shows that the repeat purchase rate is about 27%. However, this figure can vary widely between different e-commerce platforms. The impact of COVID-19 on repeat purchases is less clear. While repeat purchases have gone up during the pandemic, this might be completely driven by the general increase in e-commerce demand. This assumption is plausible because other data shows that customers are more open to trying new e-commerce brands during the pandemic.
- The repeat purchase rate is the most commonly used metric to determine the percentage of e-commerce purchases that are made by repeat customers. The repeat purchase rate measures the percentage of total customers that come back for a second purchase to the same e-commerce platform.
- It should be noted that the repeat purchase rate measures the number of customers that placed their second order with the same e-commerce platform. Shopify, one of the largest e-commerce interface providers, claims that “once a customer returns for a second time, their likelihood of purchasing again jumps to 45%. The fourth time a customer returns, the odds of them buying again jump to 56%.” Therefore, it seems that the likelihood that the customer will purchase from the same e-commerce store grows exponentially with their number of previous purchases from that store.
- Most studies estimate that e-commerce companies typically see repeat purchase rates between 20% and 40%. Repeat purchase rates tend to vary depending on the industry the store is operating in. For example, certain types of products like groceries naturally have a higher rate of repeat purchases than electronics products. The size of the e-commerce platform is also a factor, with larger and more diversified e-commerce stores like Amazon getting more repeat purchases than specialized e-commerce stores.
- The latest available data from 2020 shows that “73% of first-time purchasers won’t make a second purchase” from the same e-commerce store. Put differently, this survey shows that the repeat purchase rate is about 27%.
- Shopify’s own study, conducted in 2018, seems to confirm this figure. Shopify found that its stores (operated by independent e-commerce businesses) had an average repeat purchase rate of 27%.
- Finally, Alex Schultz, VP of Growth at Facebook says in his YCombinator startup class, “If you can get 20–30% of your customers coming back every month and making a purchase from you, then you should do pretty well.”
Impact of COVID-19 on Repeat Purchases
- The COVID-19 pandemic had a strong and indisputable impact on the rise of e-commerce, impacting metrics like average order values and purchase frequencyplatform (order frequency) to a significant degree. However, the impact of COVID-19 on repeat purchase rates is less clear.
- Second purchases in e-commerce stores have definitely increased since the pandemic in all major sectors (see image below). However, it is unclear whether the increase in second purchase rates can be completely explained by the general increase in demand for e-commerce.
- Cart abandonment rates have increased in 2020 in most e-commerce sectors. This means that customers are more frequently deciding not to proceed with purchases, including repeat purchases, at the last minute.
- Customer loyalty to e-commerce brands has been increasing over the years. A survey by e-commerce marketing platform Yotpo from November 2019, shows that customers are becoming more loyal to e-commerce brands. However, customers seem more willing to try new e-commerce brands during the pandemic, and a McKinsey report found that more than 75% of consumers have tried new brands, places to shop or methods of shopping so far during the pandemic. This can be partially explained by inventory issues that were caused by the surge in demand for e-commerce. Sometimes, customers have been forced to switch to a different e-commerce platform during the pandemic because the one that they were previously using was out of stock of certain products.