Agathe Westad

Figuring out how to turn first-time shoppers into repeat customers is the stuff of retail dreams.

Unfortunately, faulty assumptions or, worse, scattershot marketing blasts can spoil the party, turning the dream into a nightmare of high acquisition costs and ineffective discounts that only cannibalize revenue, according to Optimove’s Agathe Westad.

“Fifty-nine percent of first-time customers never come back,” Westad said, before delivering even more sobering news: In the fashion and luxury space, she figures the number is closer to 80 percent.

Luxury, in particular, throws a lot of effort into acquiring customers, spending “a lot of time and effort on making beautiful pieces of content, of thinking about our brand meaning, of thinking about authenticity and how to convey that to differentiate,” she said. “And then we get customers through the door, and they don’t come back.”

The issue should be self-evident for retailers, but Westad laid it out for attendees: Acquiring a new customer is four times as costly as keeping one. And when it comes to retention, that second order is pivotal.

“You’re actually not just getting the money from the revenue from that second order, you’re increasing the lifetime value of your customer,” she stated.

“Because you’re increasing their chances of coming back after and after and after — it gets easier and easier and easier.”

As a marketing automation and customer data platform, Optimove  — which works with clients like Stitch Fix, Dollar Shave Club, Lime Crime, Sweaty Betty and Sephora, among others — has seen it all before. The firm helps retailers and brands get the most out of data, even breaking it down into game plans they can follow for critical strategies, including how to get those valuable second orders.

The key, according to Westad, lies in knowing what kind of data to analyze and how to organize it. Do it right, and it reveals the best days and times to target first-time shoppers with marketing messages, what kind of content or offers work best and for what products or categories.

It all starts with timing.

“You’ll have a first purchase and then you’ll have 10 days, 15 days, however long that lasts. And then you have a drop, and that drop means that people are less likely to come back. You need to understand where that drop is,” she said, and it can vary — 30 days, 60 days, 200 days or another period.

Properly timing an encouragement for a return visit after the first purchase is crucial. Too late, and the chances the shopper will come back dramatically falls. Completely miss the window, and the customer becomes a one-timer.

Pulling out an array of tables and charts, Westad showcased the sort of glee that only people who love analyzing data can have for spreadsheets. It’s necessary work, and the good news is that many brands already have the information they need. It just needs to be crunched.

Sorting data into buckets — like percentages of first and second purchases on each day of the week, time of day, order amounts and product categories — and then cross-checking those factors help brands understand the best days and times to target first-time shoppers with marketing messages, what kind of content or offers work best and for what products or categories.

For instance, throwing sales at consumers at a time when they’re not receptive could blow that delicate balance. And if certain product categories work better for building loyalty, perhaps save others, like high-volume, but low-loyalty products for another time. Segmenting shoppers, or combining like customers into groups, can shed a lot of light on buying trends and other likely behaviors.

If the process works, brands will know who their best, most loyal patrons are — and which first-time shoppers are most likely to become them, based on the data.

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