Repeat Purchase Rate, and how to calculate it

Your store’s repeat purchase rate shows you how loyal your customer base is. The more customers who come back and buy two, three, or even ten times, the more valuable each customer is.

This is called your repeat customer rate, re-order rate, or customer retention rate. Whatever the name, they all measure what percentage of your customers come back for another purchase.

Calculating your repeat purchase rate in Shopify is pretty easy. For this example we’ll do it for a single month but you can do it for any time period, including the entire time your store has been in business.

1. Find the number of customers who have placed an order

First you need to count how many customers have placed an order.

You can use the Sales by customer report for this.

sales-by-customer

In the example above, there are 26 customers.

(Depending on your Shopify customer configuration, you might have customers in your database who have placed 0 orders. Ignore them, they shouldn’t be used in this calculation.)

2. Find the number of customers who placed a repeat order

Next you need to count how many customers whose order was a repeat order.

The closest report for this is to:

  1. use the Sales by customer report
  2. sort them by the order count column
  3. count the number of customers with more than 1 order

sales-by-customer

For the example above, that would be 8 customers.

3. Divide

Finally divide the repeat customers (#2) by the total customers (#1).

 Repeat customers
------------------
 Total customers

You’ll end up with a decimal number from 0 to 1. Multiply that by 100 to get your percentage (27%).

In this example 8 / 26 = 0.307 so the repeat purchase rate is 30.7% for last month.

Industry averages

Each industry has different levels of "good" rates and each store will be different.

The more subscription or consumption-based products you sell, the higher your repeat rate should be. Stores selling more durable products tend to have a lower reorder rate. Stores with larger product catalogues will also tend to have a higher rate because there is a greater selection of products to drive customers back to your store.

That said, a repeat purchase rate from 20-40% is a good range to be in. Shopify has found that a 27% repeat purchase rate is considered a good baseline.

Are you struggling to grow your repeat purchases? Get help deciding where to optimize your store for retention and repeat customer purchases.

You'll learn about:
  • Why your repeat purchase rate is an excellent measure of your future success
  • How to calculate your repeat purchase rate and average order values
  • Why defining the path of your ideal customer can help you evaluate marketing and retention tactics
  • Why focusing on repeat customers can have an out-sized ROI impact on your revenue
If you're wanting to learn how to guide your retention decisions with metrics and data, this will give you the knowledge and tools that make that happen (and boost your revenue at the same time).