Lindsay MacDonald
Content Manager @ Yotpo
October 25th, 2022

It’s time for eCommerce brands to redefine retention.

Table Of Contents

We’re hearing a lot about retention these days. 

It’s not surprising, right? Consumer spending has slowed down while acquisition costs have continued to rise, which means that brands are spending more only to gain less when it comes to winning new shoppers. 

As a result, brands are shifting focus to retain their first-time shoppers, and they’re activating their existing loyal customer base in order to drive growth.

But, retention is complex, and because of that, it’s often thought of only as the final step in the buyer’s journey. It takes work to acquire a new shopper, and for many brands, retention feels like yet just another task to be completed, often coming secondary to other initiatives.

But, in order to build lasting relationships with customers, brands have to be more intentional about retention from the very beginning. Gone are the days when acquisition is simply the act of acquiring new shoppers — today, it means acquiring new relationships — and retaining them.

To achieve those relationships, retention is becoming a bigger focus for brands. But, what does that actually look like in practice? We wanted to know more about this shift to retention, and we wanted to know from the brands themselves. So, we sent out a survey and asked questions to help us get to the bottom of this.

In August 2022, we surveyed 57 global eCommerce brands of all sizes, and their answers might just surprise you. Let’s dive into our top takeaways.

Retention is complex, and while many brands understand the importance of retention, they don’t exactly know where to start.

We found that over 52% of eCommerce brands said they were more focused on retention this year, but over 40% haven’t made any changes to their strategy in order to improve retention

And, over one-third (34%) of the brands we surveyed said their biggest challenge when it comes to retention is simply the lack of strategy. (See chart below).

Sometimes, the toughest part is just getting started.

It’s obvious to brands that retaining their loyal customers should be a focus, but actually putting that into action is far more complex than it seems. Brands need guidance on how to actually build a comprehensive strategy that works for them and their customers, because retention isn’t one-size-fits-all, either.

Brands aren’t taking a holistic approach to retention tracking.

Over 72% of brands are primarily defining retention rate as their repeat purchase rate. RPR is an important metric, but it’s not the only one brands need to look at when measuring retention.  

So it comes as no surprise that over 70% of respondents report that their retention rate has either stayed the same or gotten worse over the past year. This is because brands are only looking at a singular number rather than tracking retention comprehensively. 

Retention metrics can be confusing, and that’s one of the primary reasons brands don’t know where to start with their strategy. If you aren’t confident in the data you’re tracking to measure retention, or you’re not sure you’ve even tracking the right data points from the start, then it’s easy for your strategy to feel less impactful.

Repeat purchase rate is an easy metric to track. You can clearly go into your dashboards and understand who’s a repeat buyer, what they’re purchasing, and maybe make some educated assumptions about their product preferences and shopping behavior.

However, repeat purchase rate doesn’t account for every touchpoint that should go into measuring retention, because it’s only focused on transactions — purchases. But, brands have to pay attention to their customers’ engagements in between purchases as well in order to track retention effectively. 

Brands struggle to understand the value of customer actions beyond purchases.

Over 42% of brands say their biggest retention challenge is driving customer engagement between purchases.

So, while engagement is extremely important to take into consideration when assessing the success of your retention strategy, we understand that it’s also complex to actually measure. 

Take a step back and think about all of your customer’s interactions with your brand. Do they follow you on social media? Are they an active member of your loyalty program? Do they interact with your text messages? 

This engagement data, along with repeat purchase rates, helps measure customer lifetime value.

There’s a clear value to a multi-channel approach when it comes to improving retention.

Over 52% of brands have invested in an email marketing program this year to drive retention, followed closely by a loyalty program (43%), SMS marketing (30%), and subscriptions (23%).

And, of the 33% of brands whose retention rate has increased over the past year, 76% launched or optimized a loyalty program.

Diversifying your channels may not seem like a completely groundbreaking takeaway, but take a step back for a moment. Typically, brands speak about omnichannel strategies when it comes to acquisition — not retention — and that’s what we want to change.

When you start to consider retention from a multi-channel perspective as well, brands can better understand every single customer interaction, no matter where it takes place, from the very beginning. 

Moving forward with a new outlook on retention.

Retention is tricky, but integrated tech can help. With a platform solution, brands have fewer solutions to manage but more holistic data, and you can use that comprehensive data to engage shoppers more successfully in between purchases across more channels.

To learn more about how your brand can build an effective, multi-channel retention strategy, talk to a specialist here.