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6 Ways Retailers Can Increase Ecommerce Customer Retention

by EasyPost
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It’s no secret that ecommerce customer retention can be a challenge. In fact, the average direct-to-consumer ecommerce brand only retains around 28% of its customers, according to a report by Metriloopens in new tab. That’s why in this article, we’re breaking down the basics of ecommerce customer retention and sharing six ways retailers can improve their retention rates.

What is customer retention?

Customer retention is the percentage of customers who make a second purchase from a store. In other words, it’s a measure of how well a store is able to keep its customers coming back.

Many factors can impact customer retention, including the quality of products, the level of customer service, and the overall customer experience.

In ecommerce, customer retention is still the same measurement used in traditional retail, but it comes with a different set of challenges. First, ecommerce storefronts don’t have the opportunity to build relationships with customers in person, as the online experience is limited. On top of that, ecommerce shoppers have more options when it comes to where they shop online, so it’s important to stand out from the crowd.

Why is customer retention important?

In ecommerce, customer retention is important because it can be more difficult to build relationships with customers who shop online. With so many online retailers to choose from, it’s easy for customers to take their business elsewhere if they’re unhappy with their experience.

High customer retention also helps ecommerce stores make more money over time and builds a competitive advantage. The more loyal customers a store has, the more likely they are to recommend the store to friends and family, creating an extended network of new loyal customers.

How to calculate customer retention

The percentage of customers a business retains during a given period of time is its customer retention rate. It can be calculated with this formula:

((CE - CN) / CS)) x 100 = CRR

  • CE: Total number of customers at the end of the period
  • CN: Number of new customers acquired during the period
  • CS: Number of customers when the period began
  • CRR: Customer retention rate

For example, let’s say a store has 1000 customers at the beginning of a three-month period. During those three months, they gained 700 new customers and ended up with a total of 1100 customers. These numbers can easily be plugged into the formula.

((1100 - 700) / 1000)) x 100 = 40

After doing the math, we can see that 40% of customers were retained during those three months.

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Improving ecommerce customer retention

Ecommerce retailers can use several strategies to improve retention. We recommend these six strategies.

1. Excellent customer service

One of the best ways to improve customer retention in ecommerce is to provide excellent customer service. This includes responding to customer inquiries quickly and resolving issues efficiently. Whether it’s shipping delays, returns, or damaged products, a positive customer service experience can majorly impact the customer’s overall impression of a business.

When customers have a positive experience with customer service, they’re more likely to be satisfied with their purchase and come back for more. And, of course, this leads to increased profits. Simple changes, like using consistent policies, adequately training employees, and taking a positive approach to interactions, can go a long way in improving the customer service experience.

2. Seamless customer experience

Another way to improve ecommerce customer retention is to focus on creating a seamless customer experience. This means eliminating friction points and making it easy for customers to find what they’re looking for and checkout without getting sidetracked.

In ecommerce, customer experience is everything. Your website needs to be easy to navigate, your products need to be easy to find, and your checkout process needs to be simple and straightforward. Otherwise, shoppers may get frustrated and take their business elsewhere.

If you’d like to move beyond the basics, you can go above and beyond in your customer experience by offering features such as live chat, order tracking, and free shipping. This will impress customers and help them have a smoother and more pleasant shopping experience.

3. Loyalty rewards

Many businesses choose to reward customers for their loyalty. This can be accomplished by offering loyalty programs, discounts, and other incentives to customers who make multiple purchases from a store.

For example, you could create a loyalty program where customers earn points for every purchase they make, and those points could then be redeemed for discounts on future purchases. Or you could offer a discount to customers who make multiple purchases within a certain period of time. Get creative in ways that keep customers coming back.


4. Personalized marketing and community building

Personalized marketing communications can also support customer retention. This may include automated abandoned cart emails, order follow-ups, and social media advertising relevant to a user’s viewing history.

You can also personalize product recommendations to shoppers on your website based on their purchase history. This encourages them to find new and interesting products that they might not have considered otherwise.

While you’re at it, use those targeted markets to create a community around your brand. This can be done by engaging with customers on social media, hosting events and meetups, and generating content that specifically targets your customers' needs. Sharable content may even expand your brand’s reach.

Building a community is also a great way to learn about customer wants and needs. Responding to requests and following through on them is a great way to build relationships and keep customers coming back for more.

5. Trust and Confidence

Another way to improve customer retention is by building trust and confidence in your brand. Shopping online can be a risk, especially when it comes to personal information. Consumers visiting a website for the first time are often unsure if it’s a site they can trust.

Put shoppers’ minds at ease by taking steps to inspire first-time visitor trust, and you’ll see an increase in online sales. Trust indicators like BuySafe’s Shopping Guaranteeopens in new tab will boost their confidence with tangible benefits.

It works by displaying trustmarks throughout the shoppers’ journey on the bottom corner of your website and on your product cart pages, reassuring your customers that you are a trusted merchant. The Shopping Guarantee includes the following benefits for your shoppers:

  • Identity protection through Allstate for up to $10,000.
  • A product purchase guarantee that ensures the product will show up on time and as expected.
  • A lowest price guarantee that pays the difference if the price drops in the next 30 days.

Incorporating a third-party endorsement and shopping guarantee onto your site will convert a higher number of first-time visitors and will keep your satisfied shoppers coming back for more.

6. Customer feedback implementation

Finally, make sure to regularly seek customer feedback and use it to improve the customer experience. Businesses can accomplish this through surveys, customer interviews, and focus groups.

Customer feedback is essential to ecommerce retention because it gives businesses direct insight into what their customers want to get out of their shopping experience. It may uncover problems you weren’t even aware existed. Listen to feedback when given and use it to make changes to your website, improve product offerings, and enhance the overall customer experience.

Increasing customer retention with EasyPost

EasyPost’s suite of shipping APIs don’t just help you streamline logistics – they can also help increase customer retention. With real-time tracking, transit time predictions, and more, businesses can improve their customer experience and, in turn, increase customer retention.

And with our simple integration process, you can start using EasyPost in minutes. Sign up for free today, or get in touch with one of our shipping experts to learn about how you can boost your customer retention with EasyPost.