Understanding How Consumers Make Online Repeat Purchases: Factor and Metrics

Understanding How Consumers Make Online Repeat Purchases: Factor and Metrics

The estimated number of internet users worldwide in 2022 is 5.3 billion, up from 4.9 billion the previous year. This proportion represents 66 percent of the global population. This skyrocketing speed of the internet has grabbed your attention with free apps, eCommerce growth, and more, thus making your life easier in many ways.

Customer loyalty and frequent purchases are essential for eCommerce's existence and profitability. When a buyer makes an online purchase, they are influenced by several things. Some major factors that influence the frequent buying behavior of consumers include price, convenience, sentiment, confidence, security, time, after-sale service, return, and discounted products.

Virtual stores also have to understand the new trend in customer shopping behavior, conversion rates, customer retention, frequent purchase trends, and loyalty influenced by the pandemic. The driving forces are usually different. It often turns from luxury to emergency or basic needs. This article will discuss the factors behind online repeat purchases and the metrics to understand how consumers buy repeatedly online.

The Rise of Online Shopping
Factors Influencing Online Repeat Purchases
Metrics for Understanding Repeat Purchase Behavior
Tips for Increasing Repeat Sales and Improving Customer Retention

The Rise of Online Shopping

According to Statista, in the pandemic year of 2020, nearly 2 billion people enjoyed online shopping, with global eCommerce sales exceeding $4.2 trillion. In 2021, it was 2.4 billion, which means nearly 27% of the global population. Despite the slowing growth, total spending by 2025 will surpass $7 trillion.

Retail Ecommerce Sales Worldwide
Retail Ecommerce Sales Worldwide

Some facts to understand consumer behavior in digital stores:

  • In 2022, retail eCommerce sales were estimated to exceed $5.7 trillion worldwide.
  • The US eCommerce retail sales are likely to cross $740 billion by 2023, and by 2024, the Indian market is estimated to be worth $111 billion.
  • Shipping costs, the need to re-enter card information, and the presence of fake or expired discount codes are three prime reasons to abstain from making a final decision or making frequent purchases.
  • The top 3 reasons for constant online shopping are to shop anytime, find things quickly, and save time.
  • Shoppers decide on a final purchase based on a clear product image, followed by a product review.
Customer Retention Strategies

Factors Influencing Online Repeat Purchases

The 4Ps of marketing (product, price, place, and promotion) are not enough to retain customers in the digital market, where the monopoly is fading away with the advent of many new players. Reports have warned that loyalty and retention processes are declining daily. Now, shoppers have become more selective as they do their own research on social media and various other channels rather than making an online purchase blindly. The following are some of the factors that directly or indirectly influence online repeat purchases:

Price

Price is one of the most crucial factors for online customers when making purchasing decisions. Customers are more likely to make repeat purchases if the prices are reasonable, competitive, and offer good value for money. Discounts, promo codes, and bundled offers can also influence repeat purchases.

Convenience

Online shopping provides a convenient and hassle-free shopping experience for customers. If the online store offers a user-friendly interface, easy checkout process, fast delivery, and multiple payment options, customers are more likely to return and make repeat purchases.

After-Sale Service

After-sale service plays a critical role in online customer retention. Customers appreciate it when the online store provides prompt and efficient customer service, including quick resolution of any issues, personalized assistance, and hassle-free return policies. Satisfied customers are more likely to return and make repeat purchases.


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Effective Communication for Online Customer Retention

Relationship marketing is a crucial component of retaining loyal customers in the online marketplace. In the Web 2.0 world, two-way communication is an essential force behind frequent purchases. When queries or issues arise, effective communication allows businesses to quickly resolve problems and gain a better understanding of their customers. For eCommerce retailers, it is essential to maintain clear, convenient communication channels to make buyers feel important and encourage future purchases.

Various communication channels can be used, such as verbal, chat, and AI support, to retain consumers. A good communication channel helps to deliver product information, solve queries, and provide customer support. Therefore, the convenience of communication has a significant impact on customer satisfaction, which, in turn, influences the likelihood of repeat purchases.

Personalization in Enhancing Online Customer Loyalty

Personalization is a powerful tool for enhancing customer satisfaction by meeting their specific needs and desires. Online stores can implement personalization in various ways, such as addressing customers by their names, providing customized product recommendations, and allowing users to interact with the website according to their preferences. Personalization is a key factor that influences online repeat purchases by customers.

By tailoring the online shopping experience to individual customers, businesses can create stronger connections and build customer loyalty. For example, Amazon uses personalization to recommend products based on customers' browsing and purchase history. Such personalization makes customers feel valued and understood, which can lead to increased loyalty and repeat purchases.

Payment Security and Privacy Concerns

Payment security and privacy concerns are significant deterrents for online repeat purchases. Customers are less likely to make repeat purchases if they have concerns about the safety of their credit card details or the misuse of their personal information. To address these concerns, eCommerce retailers must ensure they have robust payment security measures in place and are transparent about their data privacy policies. Logistics providers can also use specific codes to maintain customers' residential privacy and earn their trust, which can increase the likelihood of repeat purchases.

Leveraging Customer Data for Retention Marketing

Ecommerce businesses can leverage customer data to enhance retention marketing efforts. Tracking customer browsing behaviors and purchase history can provide valuable insights into their preferences, interests, and needs. By analyzing this data, businesses can make personalized recommendations and target customers with relevant promotions and ads.

Leveraging customer data can be an effective way to encourage repeat purchases. For example, Amazon uses customers' purchases and browsing history to suggest similar products or offer personalized promotions. By providing relevant and targeted recommendations, businesses can keep customers engaged and encourage them to make repeat purchases.

Loyalty Programs

Offering loyalty programs or rewards for repeat purchases is an effective way to incentivize customers to return. This can include discounts, free shipping, or exclusive access to products or events.

Social Proof

Social proof, such as customer reviews or testimonials, can help build trust and credibility for an online store. Positive reviews can encourage customers to make repeat purchases, while negative reviews can discourage them.

Common Ways People Find the Perfect Product
Common Ways People Find the Perfect Product

Metrics for Understanding Repeat Purchase Behavior

To understand how consumers behave when making repeat online purchases, online stores can use the following metrics:

Browsing Behavior

According to research, about 74% of customers browse online before visiting brick-and-mortar stores. An online store's SEO tools, speed, promotional activities, and advertisements influence browsing behavior. These factors are crucial in attracting potential customers and converting them into loyal ones. By analyzing browsing and purchasing patterns, online stores can gain a better understanding of consumers' requirements and preferences.

Before the advent of internet shopping, only 40% of people had purchase decisions in mind, with others just curious about prices. In the early stages of internet shopping, people jumped from one website to the next to enjoy variety and compare prices. Nowadays, people look for various products and categories on various different sites before making a single purchase. Thus, browsing behavior is a critical metric for online stores to understand and retain customers.

Online Traffic

Internet traffic flow is a useful tool for tracking how customers navigate an online store's pages and how many times they do so. Billion-dollar eCommerce giants can be identified by their traffic flow. Online stores can use this information to create an optimal navigation path for customers to reach their most popular products or categories.

Page Visits

In the United States, the typical internet shopper spends $3.46 on every visit. The number of pages that customers view during each visit is an important metric to understand customer behavior. Online stores can use this metric to identify the most and least popular website pages and improve their strengths and flaws. A high page-per-visit metric can help increase click-through rates (CTR) and overall conversions. However, it is important to note that only 4-5% of site visitors actually make a purchase, and the number of frequent visitors is even lower. Nevertheless, these frequent visitors contribute significantly to the trillion-dollar eCommerce industry.

Session Duration

The average session time provides a clear indication of how long visitors stay on the eCommerce site. It is a non-sensitive data track process. Longer session times indicate the flow of potential customers toward making an online purchase at the end of the session. This potential mass can drive towards frequent purchases or loyalty. Online store owners can track customers' travel history from the home page to checkout.

Social Media Influence

More than 330 million people joined the social media addiction club in 2021. Social media addiction can turn into customer loyalty or influence frequent purchases through promoted advertisements, stories, debates, and webinars. Several social networking networks have taken advantage of increased eCommerce demand by adding more facilities, allowing shoppers to browse and purchase products from participating online stores without ever leaving the platform. These platforms are tightly connected with online retail systems, allowing virtual store operators to effortlessly promote their products across omnichannel. In 2021, social commerce accounted for 4% of overall eCommerce sales in the US, as per Statista data.


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Tips for Increasing Repeat Sales and Improving Customer Retention

The customer lifecycle looks like this: Reach > Acquisition > Conversion > Retention > Loyalty.

The average conversion rate is nearly 3% which is a great concern for small players. The average cart abandonment rate is almost 70%, the final nail in the coffin. How is it possible to get investors' confidence with such a small final sales rate? A repeat purchase story looks like a daydream for many small players where the rejection rate is 95 times higher than the conversion rate. So, here are some important tips for accelerating repeat sales and improving customer retention:

  • To ensure that your customers return, make shopping less complicated by building up an excellent mobile shopping experience. You can't ignore skyrocketing growth of mobile commerce.
  • Indulge in remarketing or retargeting as it can scale up frequent visitors up to 50%.
  • As a startup, focus on organic growth than spending on promotion. Startups should focus on thank you call with a customized offer for the next purchase ( no sales call, please), handwritten notes, and, if possible, make some personal delivery also!
  • Please share stories and the best content on social media, and then publish them on your website's blog. Try to engage customers with real-life experiences.
  • Selling intention is secondary for early birds while selling a better experience should be a priority (for retention or loyalty)
  • When 'friction' enters the purchase decision-making process, it reduces the conversion rate. Try to fix friction. Identify lost customers and start a reactivation campaign.
  • Packaging care is a must even if you have a third-party logistics carrier; it creates first after-sales memory.
  • Make AI-based data, purchased data, demographic data, and data-driven strategies for good results in retention marketing.
  • Try to push the FOMO (fear of missing out ) strategy for email subscribers with a discount code. Inject value with a personalized experience.

However, it's important to note that these tactics may not work equally well for all businesses, and it's essential to analyze data and adjust strategies accordingly.

Conclusion

In conclusion, the modern consumer is more selective than ever before, making customer retention a challenging task. However, by focusing on building a positive customer experience through strategies such as personalized messaging, mobile optimization, and advocacy marketing, businesses can foster trust and loyalty with their customers. Additionally, leveraging data-driven insights and addressing friction in the purchasing process can further enhance the customer experience. By prioritizing the needs and preferences of their customers, businesses can unlock the key to success and sustainable revenue growth in today's competitive market.

FAQs

What factors influence online repeat purchases?

Some of the factors that widely influence online repeat purchases are price, convenience, effective communication, personalization, payment security, privacy concerns, leveraging customer data for retention marketing, social proof, and loyalty programs.

How to understand repeat purchase behavior in consumers?

The repeat purchase behavior of consumers can be understood with the help of metrics like browsing behavior, online traffic, page visits, session duration, and social media influence.

What are the five stages of the customer lifecycle?

The customer lifecycle looks like this: reach > acquisition > conversion > retention > loyalty.

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