Varos Glossary

Repeat Purchase Rate

Repeat purchase measures how many people made more than one purchase from your store over a certain period of time. It is expressed as a percentage of your eCommerce store's total orders.  

The Importance of Understanding Your Average Repeat Purchase Rate

Caption: With Varos, you can automatically calculate your repeating order ratio and assess it in the context of several other KPIs. 

As is the case with customer return rate, your repeat purchase rate is closely connected with your eCommerce brand's health and success. It's essentially a direct measure of your customer retention rate. A higher percentage of repeat purchases means that you've cultivated a loyal and engaged following within your core audience. 

Repeat purchase rate is best contextualized and assessed alongside the following metrics: 

  • Customer Acquisition Cost. How much your eCommerce brand must spend to acquire new customers.
  • Average Order Value. How much each customer typically spends on an order. 
  • Conversion Rate. The percentage of visitors to your store that make a purchase. 
  • Refund Rate. The frequency with which customers return or refund products to your store.
  • Customer Lifetime Value. The estimated total revenue an average customer will generate for your company. 
  • Abandoned Checkouts. The percentage of shoppers that make it to checkout then abandon their cart.

Customer retention is essential for sustainable long-term growth in the eCommerce space. It's not enough to simply attract customers, you must also ensure they're willing to return and shop with your company again. After all, it costs less to bring back a returning customer than it does to acquire a new one. 

Returning customers aren't just better from a profitability perspective, either. The most loyal and engaged can also end up being a steady source of new customers themselves as they tell friends, family, and loved ones about your brand. 

How to Calculate Repeat Purchase Rate

To calculate your customer repeat purchase rate, you'll first want to tally up how many customers made multiple purchases during a given timeframe. Once you've done that, the formula is as follows:

(Returning customers/total customers)x100.

What's the Difference Between Customer Return Rate and Repeat Purchase Rate? 

In the context of eCommerce, repeat purchase rate is functionally just another way to express your store's customer return rate. They both measure customer retention, and both can be contextualized in a similar fashion to identify bottlenecks in the sales process. The only notable difference is that the former is expressed as a percentage whilst the latter is expressed as a numerical value. 

Repeating order ratio is another word for repeat purchase rate — and coincidentally, how we refer to the metric within the Varos dashboard. 

How to Increase Repeat Purchase Rate

Caption: If your repeating order ratio is trending downward over time, there has to be a reason why — and Varos can help you uncover it. 

Because repeat purchase rate is a customer retention metric first and foremost, it follows that the best way to increase it is by examining your eCommerce brand's retention strategy. This includes, but is not limited to: 

  • Identifying and eliminating bottlenecks in the customer journey. 
  • Identifying specific demographics that make repeat purchases with greater frequency and determining why. 
  • Assessing repeat purchase rates for individual products and categories. 
  • Incorporating lead recapture strategies such as abandoned cart emails. 
  • Implementing a solid omnichannel marketing strategy which includes social media, paid advertising, email, and SMS. 
  • Exploring the possibility of discounts, loyalty programs, exclusive offers, etc. 
  • Making an effort to engage with your customers on a personal level. 
  • Consider the buying life cycle of your products — does your current sales strategy mesh with that life cycle?