Shopify LTV Benchmarks for 2024: How does your brand stack up?

2024 will be here before we know it, so Varos and Bamboo have partnered up to share the latest Shopify Lifetime Value (LTV) benchmarks and analysis across beauty, fashion, food & beverage, and home & garden verticals. We hope it helps with 2024 planning.

To see how your granular KPIs stack up against other companies just like yours, try Varos today. Takes just 2 minutes.

If you want support to drive more profitable growth in 2023, reach out to the team at Bamboo. 

Here are the benchmarks and analysis: 

Top beauty brands earned an extra $40 per customer by Month 12. They achieve this by earning more revenue per customer in Month 1 and then continuing to expand that revenue per customer until LTVs flatten out around Month 7. Beauty appears to have lower retention rates after Month 7 than some other verticals we analyzed, so we recommend that beauty brands ensure they are profitable on customers well before that point. For Bamboo’s top beauty clients, we generally aim to be profitable on customer acquisition in Month 1.

Top fashion brands also out-earned their peers in Month 1 and continued doing so through Month 6. The end result is an extra $59 per customer by Month 12 for top performers. LTV curves flattened out for Fashion brands around Month 5, so we recommend ensuring profitability on new customer acquisition before that. For Bamboo’s top fashion clients, we like to see profitability on customer acquisition costs by Month 2 (preferably month 1). 

In Food and Beverage, monetization after Month 1 is clearly what separates the best from the rest. Top F&B brands continue stacking lifetime value each month while the Median F&B brand earns less early on and stops monetizing customers almost entirely by Month 6. Top F&B brands are earning $40 more per customer in Year 1 and appear to keep on earning revenue from customers after that point. If you’re an F&B brand who has strong repeat rates, you should be okay with longer customer acquisition payback periods – possibly up to 6 months or more.

In terms of Lifetime Value, top Home and Garden brands outperform every other vertical. 

H&G also has the biggest gap between “the best” and “the rest”. Top H&G brands earn almost triple the revenue per customer in Month 1 and end up earning a whopping $122 more per customer by the end of Year 1. This gap makes sense in a vertical that includes both furniture and small H&G items, but it’s clear that the market potential for any H&G brand is large for brands that can monetize well upfront and then upsell customers successfully over time.

When we look at the overall roll up, it’s clear that top Shopify brands monetize their customers better early and they monetize their better in later months too. The best Shopify brands earn an extra $56 per customer in Year 1 by outperforming their peers in both acquisition and retention.

CONCLUSION: In our CAC and ROAS obsessed industry, many teams ignore 50% or more of the value they capture when they successfully acquire a customer. Top Shopify brands earn more value at every stage of the customer journey, not just in the customer’s first month. With that, it’s critical to understand how your full customer journey stacks up to your peers! 

To see how your granular KPIs stack up against other companies just like yours, try Varos today. Takes just 2 minutes.

If you want support to drive more profitable growth in 2023, reach out to the team at Bamboo. 

Source: Varos

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About the Author

Yarden Shaked

Co-founder & CEO at Varos

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