Multichannel Merchant: What Are You Waiting For? Hurry Up and Get That Second Purchase
We recently reviewed data from hundreds of retail clients to find out just how soon after making an initial online purchase shoppers make that crucial second purchase. I shared the findings - which may surprise you - with Multichannel Merchant:
Although the main reason the Gregorian calendar was introduced in 1582 was to change the date of Easter, it also forever changed the way we measured days, weeks, months and years. Overall, an obviously wonderful and useful thing, but I’d like to suggest that we sometimes rely on it too much.
Take for instance the wait periods a majority of merchants automatically use to schedule their post purchase emails.
Most online retailers are painfully aware of the fact that, on average, only 15% of first-time purchasers will return to purchase again, so getting the second sale is crucial. What they may or may not know is that by converting a one-time buyer into a two-time buyer, they also double the propensity of that buyer to purchase a third-time.
Post purchase email campaigns are a proven way to help secure the important second sale; however I think merchants would be wise to challenge the assumptions about when to send the first post purchase loyalty or thank you email. While confirmation and shipping emails are important and certainly can even have respectable conversion rates, the importance of that first thank you/loyalty email to keep the first- time buyer engaged with your brand should not be underestimated.
Typically, after a subscriber buys for the first time, retailers wait a while to reach out, and they tend to wait a tidy seven or maybe even 14 days. At Listrak, we recently took a look at roughly 20 million transactions across 1,000 retail merchants and made some very interesting discoveries.
Ten percent of first time buyers purchase a second time within a day. As you can see, that number plummets to less than two percent within two days and, despite some occasional blips, continues to drop steadily every day after.
Taking a look at the second purchases by hour within the first day of purchase may help to explain:
As we see here, more than 18% of those who make a second purchase within a day make it within an hour of making the first purchase. It’s pretty safe to assume that many of these are the forehead smackers who completed their first purchase just in time to realize they had forgotten something they also intended to buy. In any case, these findings suggest a few important things I encourage retailers to ponder:
Second-time buyers who purchase very quickly after the first purchase are essentially still first-time buyers. It is important to work to secure their next purchase as though it is their second.
The propensity to make a second purchase (or third, for those quick repeat purchasers) decreases dramatically starting day two, so it is important to get the second order as quickly as possible after the first. So why are so many merchants waiting a full week to send the first loyalty email?
And while we might infer that the blips we see around weeks one two may be attributed to the effectiveness of seven and 14-day loyalty emails (that would entail another study to confirm, since our data is based on all transactions, not just those from email subscribers) why not try to get that important second order sooner?
Those retailers who strike while the iron is hot, so to speak, and reach out to first-time buyers very quickly after the sale, most likely do not need to sacrifice margin by offering a discount. Armed with the data from the purchase, the first loyalty email provides the perfect time to serve up personalized recommendations based on the same brand, different category, for example, or items frequently bought together with the first purchased product.
Just because we’ve done something the same way for a long time, does not mean that we should continue to do it the same way. Take a close look at when your customers are purchasing over time and you may very well discover that there is nothing magical happening on days seven, 14 or even on the 30, 60, 90 or 365 day wait periods often reserved for win back campaigns for that matter.
Donna Fulmer is the Marketing Research Manager at Listrak