Creating retail strategies that lead to repeat sales should be a priority for every retail business. After all, there’s little point focusing on customer acquisition if you then fall short on driving repeat sales and maximising the lifetime value of new customers. This isn’t to say that customer acquisition shouldn’t be a business priority. It absolutely should. But given how expensive it is, a dual focus and distinct set of repeat sales programs should be implemented to recuperate your investment. Repeat purchasing inherently drives long term loyalty and drives referral and word-of-mouth marketing. Studies have shown that:
- If a customer comes back to make a second and third purchase, they have a 54% chance of making another purchase (vs. 27% after just their first purchase)[1]
- A customer who has purchased with your store twice before is nine times more likely to convert than a first-time customer[1]
- Fashion customers purchase 67% more per order after shopping with a company for 30 months than they spent on their initial purchase[2]
Even a small improvement in the percentage of repeat purchases can have a major impact. When retailers introduce our recommended practices outlined below, typically we find this increases repeat sales by 4% – which equates to $34,000 additional annual profit per store.So how do you drive repeat sales?
The first step is capturing key profile data about a customer during their first visit (typically by signing them up to a loyalty program and / or email database) to be able to directly communicate with them over time. Once you have this in place, other can initiatives can follow such as;
Create a great welcoming experience – It’s often said that first impressions are the ones that last and the same goes for retail. So the first step (and perhaps one of the most important) is welcoming new customers after their first purchase to show how much you value them. This could include sending them a note to express your gratitude, encouraging them to sign-up to your loyalty program and following up with the customer after a relevant amount of time to find out if they’re satisfied with their product and overall experience.
Introduce a birthday campaign – Capturing your customers birthday date or month allows you to create one of the most effective sales driving and loyalty building campaigns in retail. Emailing or posting them a small gift, voucher and / or exclusive promotional offer does wonders to extend your relationship and increase your share of wallet.
Design a tailored second purchase program – Use data to tailor offers and communications to your customers, such as cross-selling high-margin complimentary items, offering loyalty points with their next offer, providing a time-limited offer, or reminding them if they need to replenish/stock up on their previously bought item. Receiving lots of offers and promotional emails can be off-putting to many customers so tailoring your communications will ensure they’re receiving only what is relevant to them. This can be done through segmenting your email database based on demographics or customer behaviour, rather than sending the same blanketed offer to all customers.
Introduce exclusivity and community – Make your customers feel special by offering a tiered loyalty program and then sending gifts, exclusive samples or inviting them to in-store events. Not only will this surprise and delight the customer but it will help build a genuine connection with you and your brand.
Roll out a re-activation program – Every retail business has customers who have lapsed – or are at the risk of doing so. Like the second purchase program, the best way to retain these customers is through attractive offers such as sending gift vouchers, offering loyalty points with their next purchase or providing them with a time-limited offer. Effective ways of sending these offers include email, messaging, direct mail and paid social targeted activity.
How to Add $120,000 Profit Per Year to Each of Your Stores
Driving repeat sales is just one of the 5 key drivers of profitable retail growth. By focusing on all them you could add $120,000 annual profit or more to each of your stores. Find out how much you could be adding to your bottom line with our free calculator.
Sources:
[1]https://blog.smile.io/repeat-customers-profitable-stats-to-prove
[2]https://www.accenture.com/t20180905t060744z__w__/us-en/_acnmedia/pdf-85/accenture-report-the-changing-consumer-and-the-new-definition-of-retail.pdf