December 13, 2022

Merchandise Category: Customer Composition

Have you ever looked at "how" a merchandise category generates customers? It's fun stuff!

Let's evaluate a category.

  • Last Year's Buyers = 21,315.
  • Rebuy Rate This Year = 6.5%.
  • Existing Buyers Repurchasing = 1,386.

The merchant might believe that his/her customers are loyal. They are not loyal. Nope.

How about all of the other customers who bought from the brand last year but did not buy from this category?
  • Last Year's Buyers = 669,200.
  • Rebuy Rate This Year = 0.85%.
  • Brand Buyers Repurchasing = 5,696.

Almost none of the brand buyers from last year (but no category purchase) decided to purchase from the category this year. Seriously ... it's less than 1%. And yet ... more than 4x as many customers came from this segment as came from existing category buyers repurchasing from the category. In other words, it's important for this category to generate success from last year's brand buyers who did not buy from the category.

How many customers were new/reactivated and bought from this category?
  • 6,701.

Let's summarize the three segments.
  • 1,386 buyers were existing category buyers purchasing from the category again.
  • 5,696 buyers were existing brand buyers purchasing from the category.
  • 6,701 buyers were new/reactivated to the brand, in total, and bought from the category.

This category is fully dependent upon new/reactivated buyers and from brand buyers who did not buy from the category in the past year. As are most categories, to be honest.

Know these facts, and guide your category marketing approach appropriately.

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