September 14, 2023

Messing With Rebuy Rates

One of the mysteries of FORECASTING SEASON is understanding the impact of price increases on repurchase rates, orders per buyer, and items per order.

It's common to see the following (your mileage will vary greatly ... averaged, you get the outcome below).

  • Rebuy Rates Decrease by 5%.
  • Orders per Buyer are Not Significantly Impacted.
  • Items per Order Decrease by 5%.
  • Price per Item Purchased Increases by 10%.
  • New/Reactivated Buyers Decrease by 5%.

When this happens, you end up with fewer customers ... with fewer customers, it is harder to grow in the future in spite of the price increase.

As prices went up in 2022 and stayed high in 2023, we traded higher prices for fewer customers. Now that FORECASTING SEASON is upon us, it's hard to show that 2024 will be robust after two years of customer count declines due to price increases.

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