April 14, 2022

Rebuy Rates Can Lead To Misleading Strategies

I'm reviewing Category 21. Look at this.

  • 19.8% rebuy rate among 12-month category buyers, repurchasers spend $201.55 each.  104,463 buyers in the segment.
  • 5.5% rebuy rate among non-category 12-month buyers, repurchasers spend $162.48 each.  844,019 buyers in the segment.
  • 31,962 new/reactivated buyers spending $150.93 each.
The data tells you to focus on existing category buyers, as they have the best rebuy rate and highest spend per repurchaser.

But the number of buyers in each segment matter. Here's where annual share of sales come from:
  • $4.2 million from existing 12-month category buyers.
  • $7.5 million from non-category 12-month buyers.
  • $4.8 million from new/reactivated buyers.
Nearly half of annual sales come from non-category 12-month buyers. There are a lot of buyers in this segment, but paired with a low repurchase rate you get a lot of sales volume.

This is a common outcome, folks. We are continually told to focus on our best/loyal buyers. At a category level, outside of Dominant categories, the math changes ... you want to cross-shop customers.

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