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Repeat purchase rate

| Article: 2 min read | Customer retention

Repeat purchase rate is the share of customers who made more than one purchase in a chosen period. It shows how well a store brings buyers back.

In plain words

The metric is simpler than LTV and faster than a full cohort table: of everyone who bought, how many bought twice or more. It is the key part of retention for a store with no subscription. Retention here simply is repeat orders.

Note that there is no single "standard" formula: different sources use different periods and denominators. So always state how you calculate it.

Formula

Repeat purchase rate = customers with 2+ orders ÷ all customers who bought during the period × 100%

For a cohort: how many customers who first bought in one month placed a second order within, say, 90 or 180 days (cohort analysis).

Example (illustrative figures)

The figures are made up for the example. Over a year, a pet supplies store had 8,000 customers, of whom 2,400 placed 2 or more orders. Repeat purchase rate = 2,400 ÷ 8,000 = 30%.

Check the period too: over 12 months the share will be larger than over 3. The same store would show 30% for a year and about 15% for 90 days (illustratively).

Why not to chase this number

  • Products differ. Coffee, pet food and cosmetics are bought regularly, a refrigerator once in 10 years. A "low" share for appliances is normal.
  • A high rate with a falling order value is not necessarily good. Look at it together with AOV and margin.
  • Repeat purchases with promo codes can reduce margin.

As with LTV, benchmark figures from different sources depend on the industry and period, so compare yourself with yourself, using past cohorts, not with a "standard from the internet".

Common mistakes

  • Counting orders instead of customers. One customer with five orders is not five repeat customers.
  • Duplicate customers. Different phone numbers or emails turn one buyer into several.
  • Ignoring returns and uncollected cash on delivery orders.
  • A period that is too short for products with a long purchase cycle.

FAQ

What is repeat purchase rate? The percentage of customers who bought at least twice.

How do I calculate repeat purchase rate? Divide the number of customers with two or more orders by the number of all customers in the period.

What repeat purchase rate is considered good? There is no general norm; it depends on the category and period. Compare with your own previous cohorts.

How can I increase repeat purchases? Post-purchase emails, refill reminders, a loyalty program, segmentation by RFM.

Sources

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