Sunday, September 26, 2021

Retailers break online retention rates record

A new study by IMRG and Capgemini has revealed that online retailers are prioritising retaining customers over acquiring new ones. 

The retention rate for active consumers reached a record high in the period from May to July, peaking at 36.5 per cent, an increase of five per cent on the previous year.

This quarter represents a record high for customers returning to sites to make a purchase, but also shows a record low for first time consumers making purchases.

These unprecedented figures may be due to the costs of retaining customers being significantly less than fishing for new ones. Creating effective Google search terms is generally an expensive process, but one that is vital in gaining new fresh customers.

Following the EU referendum, retailers may have been taking a cautious approach to spending, opting to invest in retention rather than expansion.

RELATED: July breaks online international sales records

The effects of Brexit can also be seen in the discounting of items, with prices down nine per cent compared to last year, as retailers attempt to restore confidence with low prices as seen in the grocery sector.

“The record high customer retention rate suggests a more conservative approach to how retailers are assigning their marketing budgets, and a number of factors may have influenced the fall in average selling price per item – disappointing weather in May and June, concerns over the referendum, Prime Day etc,” chief executive officer Tina Spooner said.  

“Yet what‘s interesting is that overall online retail sales growth performed well over this period (up per cent year-on-year), with July‘s growth (up 19 per cent) the highest since November 2014. 

“The average basket value that shoppers are checking out with – which may include multiple items – was also up, despite the fall in individual item prices.

“So ultimately, as unpredictable a period as we may now be in, this approach seems to have kept customers engaged overall so far.”

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