Flash sale retailers capture an additional 385% of the amount a customer spends in their first 30 days during the remainder of their first year as a customer, according to [pdf] a report released in June 2012 by RJMetrics. By comparison, customers of traditional online retailers spend 94% of the amount of their first purchase within the first year. Interestingly, all “next-generation” retailers performed better than traditional online retailers. Daily deals customers returned to spend 143% of their first purchase amount in the first year, while group buying customers spent 150% of their first purchase amount.
Research has shown that daily deals customers do offer repeat business. According to ForeSee survey results released in March 2012, roughly 9 in 10 daily deal shoppers said that after redeeming their most recent offer they either made another transaction with the same company (44%) or plan to do so (47%). And data from a February 2012 report from Localeze and 15miles, conducted by comScore, indicated that 45% of daily deal customers have purchased multiple daily deals from the same business, while a further 41% intend to do so.
Next-Gen Customers Buy More Frequently
Data from the “Summer 2012 RJMetrics eCommerce Customer Lifetime Value Benchmark Report” indicates that next-generation (group buying, daily deal, and flash sale) customers buy almost twice as often as customers of traditional online retailers. The median times between purchases for daily deals (48 days), flash sales (49 days), and group buying (52 days) customers were closely grouped, all much less than the median time between purchases for customers of traditional online retailers (89 days).
Traditional Retailers See Higher AOVs, Though
Next-generation retail customers might purchase more often and grow their average spending by a greater amount, but tempering this is the finding that customers of traditional online retailers spend a significant amount more per order. The average order value (AOV) for a traditional online retailer was $105, easily outpacing the AOVs for group buying ($82), flash sale ($61), and daily deal ($61) sites.
- The top 10% of retailers are extremely adept at driving repeat purchases. These retailers have customers who return to spend more than 600% of their first purchase amount in their first years as customers.
- Customers acquired through Facebook ads spent 8% more in their lifetime than those acquired through Google ads ($159 vs. $148), and 30% more than the average customer acquired via Groupon. The report notes that this analysis does not consider conversion rates or the cost of acquisition, meaning that the relative cost-effectiveness of the campaigns may vary.
About the Data: RJMetrics collected anonymous, aggregated sales data from 48 online retailers in the areas of traditional retail, flash sales, daily deals, and group buying sites. This information included metrics such as lifetime spending, repeat purchase rates, and time between purchases. When possible, these metrics were also segmented by business model, customer referral source, and other dimensions. When segmenting by referral source, only data sets with at least one hundred customers per referral source were included.