ONE-AND-DONE SHOPPING: Fewer than 20% of online store customers place a second order

According to Konigle, online sellers are suffering from “one-and-done” shopping, with fewer than 20% of their customers returning for a second order, impacting profitability.

In a study of over 5 million customers of e-commerce stores, Konigle made several surprising discoveries relating to retention: Fewer than 20% of customers place a second order on a given online store. There is a sliding scale from there, so much so that only .2% of customers ever place a 10th order. These figures were consistent across brands in over 50 countries.

Online sellers face a difficult situation with these numbers. Even though they spend money and effort on getting their first order, it’s not very profitable. Less effort and money is spent on getting future orders, which makes their profits even smaller.

“These figures suggest that sellers are primarily focused on digital marketing strategies orientated toward acquisition. Placing equal emphasis on any tactics that aid in retention is an overlooked opportunity for merchants. Once they get them in the door, they need to find ways to keep them buying,” said Jatin Khosla, the co-founder & CEO of Konigle.

Online brands often focus on digital marketing strategies, like performance marketing, to acquire customers. But, if they want to be profitable, they need to use cost effective tactics to increase customer lifetime value.

Khosla argued that new brands prioritize acquiring customers more than keeping them because they don’t think much about making real money, aka profits. To demonstrate, he shared that people search “how to increase sales” seven times more often than “how to increase profits” on Google.

This is what Konigle is trying to change. The company is trying to democratize access to the enterprise-grade selling tools, including those related to retention.

Khosla pointed to Konigle’s customer loyalty pricing or the LTV Booster selling tools as  examples. Designed for brands running their stores on Shopify, enabling sellers to create customer tiers for different segments, such as those who have already made a purchase. The merchant can then offer different tiers different rewards, such as discounts on particular collections. Or they could use the LTV Booster tool to automatically give a discount for the second order.

These types of retention tactics are important because they can combat the one-and-done tendency of customers buying on ecommerce.

Khosla said, “We don’t realize how much we can influence customers to purchase. For instance, one of our customer brands increased their yearly sales by nearly 9% in just one day by using the flash sale feature on Konigle.”

According to Khosla, this customer loyalty pricing and the LTV Booster are just two tools among many tools offered by Konigle as part of its bid to pioneer the “profit improvement category.” Through easy-to-use, turnkey tools, Kongile aims to help sellers maximize profit across every stage of the customer’s life cycle. To this end, Kongile offers automated tactics ranging from charm pricing and flash sales to inventory management and deadstock prevention.

As part of the mission to help merchants maximize profit, Kongile releases Sellingnomics, a monthly magazine that educates sellers about different ecommerce strategies and tactics. The latest issue in January focuses on overcoming deadstock, which can be downloaded here: https://konigle.com/sellingnomics/dead-stock.