What is repeat purchase rate?
Repeat purchase rate is the share of your customers who have placed more than one order, measured across a defined group of buyers and a defined window of time.
Formula
Repeat purchase rate = customers with more than one order ÷ total customers × 100
Worked example, not a result
Counting a cohort rather than a calendar month
Say a store looks at the 5,200 people who placed a first order during one year, and checks how many of them had ordered again by the end of the following year. If 1,196 of them did, the repeat purchase rate for that group is 23 percent.
The cohort framing matters. If you instead ask what share of last month's orders came from returning customers, you get a completely different number that moves for reasons outside your control. A big month of new customer acquisition pushes it down. A quiet month of ad spend pushes it up. Neither tells you whether customers are actually coming back.
Cohorts also show you the gap you can act on. If most second orders arrive within a defined stretch after the first, that stretch is exactly when a reminder, a replenishment prompt or a related product email is worth sending.
These numbers are invented to explain the method, not a target.
Why it matters
Repeat purchase rate is the fourth lever, and it changes the economics of the other three. When customers come back, you can afford to pay more for the first sale, which opens up traffic your competitors cannot afford. When they do not, every month starts from zero and growth is capped by the ad budget.
It is also the cheapest revenue in the business. An existing customer already trusts the delivery, knows the sizing and does not need persuading that the store is real, so the cost of the second order is close to the cost of sending an email.
For a store owner, the number sets a priority. If it is low and the product is genuinely repeatable, the next month of work belongs in post purchase email, replenishment timing and range extension rather than in the ad account. If the product is a genuine one off, the honest move is to raise order value instead and stop chasing a repeat that will never come.
Common mistakes
- Measuring repeat rate over a window shorter than the reorder cycle. If customers naturally reorder twice a year, a quarterly figure will always look poor and will always be misread.
- Mixing new and returning customers in a single monthly figure. That number mostly tracks how much you spent on acquisition, not how loyal anyone is.
- Assuming the rate is the same for every product. First orders of a starter size or a trial pack behave very differently from first orders of a full size item, and the average buries that.
- Trying to lift it with discounts alone. A code brings the order forward and takes margin with it, while the reasons people did not return, such as delivery, fit or the product itself, stay in place.
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