E-commerce tips
How to increase repeat purchase rate (With benchmarks & examples)
By
Emma
on
Summarize this post by:
or
Table of content
- Repeat purchase: Definition and why it matters
- Benefits of having customers make repeat purchases
- How to calculate the repeat purchase rate
- What is a good repeat purchase rate? Benchmarks by industry
- Understand customer behavior to drive repeat purchases
- Best strategies for increasing repeat purchases (With real-life examples)
- Driving repeat purchases and customer loyalty with store credits
- Final thoughts
- FAQs
Increasing repeat purchases has always been the ultimate goal for merchants and retailers. Not only do returning customers save you money, but they're also seriously more valuable to your business over time.
According to business.com, acquiring new customers costs 5 to 10 times more than selling to current customers, who spend 67% more compared to those new to your business.
But here's the catch. Getting people to come back isn't easy. What works for one business might not work for the other. Think about it: a coffee shop needs daily visits, but furniture stores might see customers once every few years. Different businesses need different strategies.
That's why you need to know your customers well. You need to pick the right ways to bring them back.
In this article, we’ll break down what repeat purchase means, how to calculate it for your store, the psychology that drives customers to buy again, and the best strategies to boost your repeat purchase rates.
Repeat purchase: Definition and why it matters
Repeat purchase is when customers buy from the same brand more than once. They might purchase the same products or services as before, or try something different offered by that brand.
This differs from brand switching, which is the act of switching from one brand to another within the same product category. Regardless, repeat purchase is the result of when someone likes what you're offering so much that they come back for more.
Repeat purchase is a typical example of brand loyalty. When a repeat customer decides to trust you, they tend to buy more and build an ongoing relationship with your business. In fact, repeat customers spend twice as much per order compared to new customers and one-time buyers.
Let's dive into the specific benefits that make focusing on repeat customers one of the smartest moves you can make as a Shopify merchant.
Benefits of having customers make repeat purchases
While most merchants get caught up in attracting new customers, the real magic happens when they decide to come back for more. The most obvious benefits of repeat purchase include:
Lower marketing costs: When people already know and trust your brand, you don't need to spend much to convince them to buy again. According to Demandsage, retaining existing customers is also five times more cost-effective than acquiring new ones.
More revenue over time: Customers who buy again spend more with you as time goes on. Instead of earning one-time revenue from casual customers, you get steady sales from people who keep coming back.
Better word-of-mouth: Repeat customers are your best salespeople. When people truly love what you do, they start telling others about you. But this doesn't just happen. You need to give them great experiences that make them excited to share.
Steady growth: When you have loyal customers, your revenue becomes easier to predict. As customers keep returning, they create a sustainable purchasing cycle that keeps bringing in more revenue.
More sales per visit: Every time a customer returns, you have another chance to introduce them to what you have to offer. Because they already trust you, they’re more likely to consider these recommendations, leading to higher average order values.
How to calculate the repeat purchase rate
The repeat purchase rate, often called repeat rate or repurchase rate, measures how many percent of your past customers come back within a specific period. With this number, you will understand how likely your customers will return after their first purchase.
But you need to be mindful that your product offering will have an impact on your repeat purchase rate. For instance, your repeat rate will be higher if you sell affordable or perishable goods, like toiletries. in contrast, your rate will be much lower for expensive products such as technologies or luxury items.
Repeat purchase rate formula
Breaking down the formula:
The number of repeating customers means that a customer who has made more than one purchase.
The total number of customers is all of your paying customers within a period of time.
Remember to clear out customers who create an account just to have items sitting in their basket. Also, keep in mind that repeat customers can span across different periods, as long as they continue to come back for what you offer.
Let’s take a look at this example: If your business has a total of 600 new paying customers in 5 months, with 200 of those having made repeat purchases, then the repeat purchase rate for your business would be 33.3%.
Since no two brands are the same, consider a timeframe that matches with your products and customer behaviour. For high-frequency and perishable items, define a repeat customer as someone who makes multiple purchases within 6 months. On the other hand, low-frequency and high-value items can extend longer, up to several years.
How to collect repeat purchase rate data on Shopify
To find information relating to the repeat purchase rate on Shopify, go to Analytics > Reports. On the Reports page, click on the Category dropdown, and you should see a Customers option to filter the reports that display only Customers reports.
There are 2 reports that you could use to view or calculate your repeat purchase rate:
New vs returning customers: Displays the number of first-time and returning customers for a given period of time.
Returning customer rate over time: This metric shows the percentage of customers who have made more than one purchase, along with how this rate has changed over a given period.
What is a good repeat purchase rate? Benchmarks by industry
If you’re wondering what a good repeat purchase rate is, there’s no single correct answer to this question.
However, research from Metrilo (which looked at data from thousands of e-commerce stores) found that most businesses see around 28.2% of their customers making a second purchase. But here's the thing – this number bounces around quite a bit depending on your industry.
Let’s look at the benchmark for repeat purchase rates in some of the most popular sectors:
When you have a high repeat purchase rate, it means your customers are happy and they're buying more from you. But you need to keep a close eye on this number.
Always check other relevant metrics and look for possible explanations to justify your repeat purchase rate, especially if you notice any anomalies.
Understand customer behavior to drive repeat purchases
Customers make repeat purchase behaviours for both practical and emotional reasons. That’s why you need to understand these motivations to encourage repeat purchase intention from your customers.
Here are some of the key factors of repeat purchases:
Loving good deals: Everyone loves offers and deals. People feel good when they save money. And when people feel like they got a great deal? They walk away with a smile and good feelings about your brand. That's what brings them back.
Enjoying easy shopping: According to PwC, 43% of consumers would pay more for greater convenience. Think about it: when your checkout is smooth, you offer flexible payment options, and your delivery is fast and reliable, customers feel valued. This makes them happy to spend more with you.
Feeling special: When customers feel valued beyond just a sale, they build a stronger bond with your brand. This personal touch makes them want to come back. In fact, MobiLoud states that around 60% of consumers are more likely to become repeat buyers after receiving a personalized experience.
Connecting with brands they believe in: When customers resonate with a brand, they gain a sense of belonging. This concept of brand love transforms buyers into loyal advocates. Typical examples include iconic brands like Apple, Harley-Davidson, and Sephora with a community of devoted fan bases.
Best strategies for increasing repeat purchases (With real-life examples)
Set up customer loyalty program
One way to encourage repeat purchases is through loyalty programs. Loyalty programs tap into something many people respond to: getting rewarded for their continued support. When done right, these programs make customers feel good about your brand and want to return.
SSENSE is a great example of this. The Canadian fashion boutique doesn’t just reward points for purchases. They create three levels that make customers feel special. The higher your level, the more perks you get. This is smart because spending money feels like earning your way to something better.
But be careful when setting up loyalty programs. Customers need to buy several times before getting rewards. If the benefits aren't clear or easy to get, people lose interest fast.
Make sure your program is easy to understand. Tell customers exactly what they get and how to get it. At the same time, design a reward system that feels valuable without giving away so much that you lose money.
However, most loyalty programs are often treated as afterthoughts. Many businesses don't think about what customers really want. Some companies don't even have enough data about their customers. So, they end up giving the same deals to everyone. Arrivia points out that 80% of program executives in the US feel their program is too similar to others in the industry.
Engage with customers after purchases through discounts
The person who just purchased from you is your most likely next repeat customer. But, this is when your customers are most vulnerable to guilt that arises after making a purchase. If you disappear during this moment, you risk losing their trust and missing the chance to build a lasting relationship.
This is the perfect time to make them feel smart about their decision and excited about coming back. For example, the accessory atelier LaCkore Couture combines discounts and email promotions to create a sense of exclusivity for its customers.
Instead of making it like a desperate grab for more sales, it feels like they're letting customers in on something special. When the follow-up discount feels aligned with that identity, it becomes a powerful way to encourage customers to return.
However, frequent discounting will hurt profit margin. What started as a special offer becomes the expected price, and suddenly, nobody wants to pay your regular rates anymore.
For brands that identify themselves as luxury or high-end, frequent discounts will affect brand perception. People will question whether your brand is as premium as you claim it to be. Think about how it would feel if Rolex started having monthly sales.
Another disadvantage of a discount is that there is no lock-in effect. Despite what type of discounts you are using, the moment the deal ends, customers can shop wherever they want next time. Nothing is binding them to you for future purchases.
Set a minimum spend for free shipping
Another effective way you can increase repeat purchases is by offering free shipping thresholds. Many store owners use this trick to remove the mental block customers hit when they're thinking, "Is this worth paying extra shipping for?"
Take Native Deodorant as an example. They offer free shipping on orders of $15 or more, making it easier for customers to shop around without worrying about additional fees.
But this trick can backfire if you don't do it right. If the threshold is too high, customers may hesitate whether to add more items or pay for shipping, which can ultimately lead to customers abandoning their carts.
Even worse, some customers will just save items in their cart and wait to buy later to hit that free shipping target. The problem? Life gets busy, people forget, or they change their minds completely. What started as "I'll come back and add more items" turns into "I'll just buy this somewhere else" or "Maybe I don't need this after all."
Streamline the shopping journey with a subscription model
Repeat purchases are easier when you sell products customers need regularly. Instead of reordering every time, a subscription model saves your customers time and effort. It makes shopping simple and more convenient.
Take Amazon as an example. The e-commerce giant introduces the Recurring Reservations, which helps customers slot weekly grocery pickup and delivery orders. Customers are charged only when they are ready to check out. Once customers become familiar with this level of convenience, switching to competitors feel cumbersome.
Despite convenience, the subscription model also has some limitations that you should be careful.
First of all, it makes customers feel pressured into buying your products. This perception arises when customers receive things they don't currently need but are still being charged for.
And here's when things can get really messy. People forget they signed up for things. If they see unexpected charges on their credit card, they get frustrated. The frustration gets worse when the cancellation process is too complicated.
So, be upfront about what the subscription includes and give people realistic expectations about timing. Before the charge date, send your customers an email reminder about the upcoming payment. At the same time, make it easy for your customers to pause or adjust their frequency.
Create a network of repeat customers with referral programs
Getting your current customers to return isn't as easy as it sounds, not to mention talking about your business to their social circle.
That's where smart referral programs change everything. When customers refer friends and get rewarded, they have a reason to return. Meanwhile, people who get referred are more likely to stick around because they discovered you through someone they trust.
For example, Rothy’s runs a “Give $20, Get $20” referral program to drive new customers. Shoppers can give their friends and family a $20 discount while earning $20 for themselves. Existing customers have a reason to return and use their discount, while new customers get a good deal from someone they trust.
Still, the limitation is that you completely depend on your existing customers. Your customers can be satisfied with your offering, but make no referrals at all. On the other hand, some people will exploit referral programs dishonestly through:
Self-referrals: The act of customers creating multiple fake accounts to refer themselves instead of genuine new customers to claim rewards.
Return abuse: A customer uses a referral link to buy a product. The referrer then receives a bonus for the purchase. After that, the customer returns the product and asks for a refund.
Final thoughts
There are many ways to increase repeat purchases. No matter which methods you choose, it is important to remember that what works well for one store may not work for another.
This is why tracking your metrics is so important. You need to understand how your store performs and how it compares to others in your industry. The most successful merchants do not try to do everything at once. Instead, they choose one or two strategies that match their customers’ behavior.
Start by understanding where your store stands today. Stronger repeat purchase rates will follow naturally.
Driving repeat purchases and customer loyalty with store credits
Koin sees store credit as more than a way to keep revenue in your business. It acts as a tool that helps build a self-sustaining customer ecosystem, where every interaction adds value.
This ecosystem follows a simple idea: each purchase helps drive both customer growth and loyalty.
For example, a customer may return to use their store credit. As they become happier with your brand, they may start sharing it with friends and family. In return, they earn more credits and become more loyal to your business. Over time, this cycle creates a strong group of customers who keep coming back and actively promote your brand.
FAQs
-About Author
Emma C.
As the Chief Marketing Officer at KOIN app, I’m here to build a robust ecosystem by collaping with Shopify apps. Together, we can create seamless integrations that add more value to our shared customers.
KOIN helps merchants retain customers, increase repeat purchases, and drive loyalty by offering cashback and store credit rewards.
📩 Let’s connect! emma@getkoin.io
