E-comm brands are losing customers faster than acquiring them: CleverTap
The e-commerce Industry Benchmark report from CleverTap highlights user engagement strategies that can help online retailers boost retention and customer lifetime value. CleverTap is a full-stack customer retention platform that helps consumer brands maximise customer lifetime value.
For e-commerce brands, high customer acquisition costs (CACs) and price-sensitive buyers impact the overall customer lifetime value and profitability due to low retention. With low entry and exit barriers, customers have a plethora of options to choose from even within niche categories.
The benchmark report, which analyses 3.1 billion data points across 18 million devices and 15 million unique users, provides user insights that will help growth teams benchmark their app’s performance against some of the most successful e-commerce apps. The report also covers strategies to help e-commerce brands improve user engagement and retention.
Almitra Karnik, Head of Marketing at CleverTap, commented, “The cut-throat competition in the e-commerce industry makes it crucial for brands to deliver a superior customer experience. Our research indicates that e-commerce brands are losing customers faster than acquiring them. On average, shopping apps lose 86 per cent of users within the first 4 weeks of download.”
Karnik further said, “Without focusing on retention, brands are trying to fill a leaky bucket, focusing on acquiring more users that don’t stick around for long. This impacts the top line as well as customer lifetime value for these brands.”
The benchmark report provides insights on how users flow from one lifecycle stage to another and provides recommendations to increase repeat purchase rate and hence user retention. Some of the other highlights from the report include:
- Registration: Only 16 per cent of new users complete the signup process within a week of installing the app
- Retention: Only 11.6 per cent of new users remain active in the first week
- Uninstalls: 42 per cent of new users uninstall the app within the 30 days of app install
- Reinstalls: Only 5.21 per cent of users reinstall within 30 days of app uninstall