April 12, 2022

Where Do Your Buyers Come From?

When analyzing Customer Development within Categories, certain truths about "how" a category develops emerge.

In my recent analysis, I analyzed Category 17.

  • 2,316 buyers were prior 12-Month Category Buyers.
  • 10,394 buyers had not purchased from the category in the past year but were 12-Month Buyers.
  • 6,483 buyers were New/Reactivated.
The way this category grows is to cross-shop other customers into the category.

Now, let's look at the story for a different category. Here is Category 16:

  • 14,574 buyers were prior 12-Month Category Buyers.
  • 36,725 buyers had not purchased from the category in the past year but were 12-Month Buyers.
  • 35,439 buyers were New/Reactivated.
Category 16 skews more toward New/Reactivated Buyers than Category 17.

Here is Category 09:
  • 156,363 buyers were prior 12-Month Category Buyers.
  • 63,899 buyers had not purchased from the category in the past year but were 12-Month Buyers.
  • 97,242 buyers were New/Reactivated.
Category 09 truly owns customers - nearly half of the customers who buy from the category bought from the category last year.

You'll hear merchants talk about "my customers". For dominant categories, that is certainly the case.

The story is different for other categories. Some categories "borrow" customers from other categories. Some categories deliver new/reactivated buyers. Know what the purpose of each category is, ok?

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