When it comes to generating revenue and increasing profits, most online businesses today work tirelessly to improve brand awareness, reach a greater audience, and generate new sales. But the fact is, existing customers are 60 - 70% more likely to make another purchase over prospects who have never bought from you yet.
So what does this mean for fashion e-commerce? Creating better customer experiences can secure those coveted repeat sales, and be better for the future of your business.
Repeat customers spend more over their lifetime
It’s in our nature as humans to feel more comfortable with the familiar and predictable. This can also translate into our shopping habits, as most of us tend to stick with a particular brand or company when we find products and services that we like. With online apparel shopping, trial and error in finding quality products, a good user experience and customer service, with products that also align with our style and fit preferences can be frustrating and exhausting.
Which is why when we do find that perfect fit, we tend to stay loyal. It’s estimated that repeat buyers spend on average 300% more in their lifetime than one-time shoppers, making them a necessary demographic for our time and attention.
It’s also why it’s important to get the first impression right. Once you’ve convinced a buyer to make a first-time purchase, it’s crucial to provide a good experience in order for them to return. This manifests itself in many different ways. One being quick and easy delivery, the products and packing being clean and organized, the quality of the products being as expected, and the style and fit being right.
If there is a misstep in any of these areas, it is still possible to retain a dissatisfied customer with easy returns and highly communicative customer support. But the goal is not to make returns easy for customers, you want to make it so they never have to return anything. This will ensure you are more likely to get their business in the future. You can do this through having more accurate size and fit solutions, and methods in place that help customers to make their purchasing decisions easier.
Repeat customers are better for marketing ROI
Because existing customers are already in your CRM and follow-up is easy, the return on investment (ROI) of your marketing and sales activities can be much higher. As repeat customers spend more over time, your average cost per acquisition (CPA) of that customer decreases. Generating new sales is much more expensive and time consuming.
Another important point to mention is that existing customers also generate referrals. Especially if you provide an excellent customer experience in combination with great products, your existing customers are more likely to talk about you to their friends, family, and colleagues, which is practically free marketing for your business. But you have to be able to provide experiences worth talking about.
When you want to make the most of your resources for encouraging sales, one of the best things you can do is invest in solutions for making online shopping experiences easy, pleasant, and accurate. By doing this, your are much more likely to spur brand loyalty, and generate referral sales that can help to rapidly grow your customer base without more effort from you on the sales front.
Repeat sales contribute to more predictable ARR
In a business industry and economic climate that can sometimes be fickle, having predictable returns can feel nearly impossible. But actually, the more loyal customers you can secure, the more you can accurately forecast annual recurring revenue (ARR) and your future profits.
Economic predictions are based on patterns that we can see emerging over time. When businesses aren’t focused on getting repeat customers, and are instead forever chasing new sales, these patterns don’t emerge so easily. But you can better leverage customer data to know how and when our customer base wants to shop so that you can take business decisions that lead to secured revenue.
For example, by analyzing customer data, you can see what time of year is better for having sales and promotions, or conditions in which customers are most likely to have the highest average purchase value. Customer data can also help you to know the types of inventory you should keep, which is affected by size and fit preferences, and understanding the materials, fabrics, and colors your customers are likely to buy. This also reduces the amount of unsold products, reduces return rates, and when you provide what your customers actually want, they become even more likely to make repeat purchases.
The fashion e-commerce marketplace is competitive and temperamental. But by focusing on improving your customer experiences and ensuring the satisfaction of first-time buyers, you are much more likely to produce loyalists and repeat customers.
Repeat customers will be a major part of your recurring revenue, can improve your marketing ROI, especially when they refer new customers, and provide immense amounts of data that can be used for better forecasting and resource allocation. This is why focusing on generating repeat business, rather than just new sales, is much better for your business.