NEW SHOPPER METRICS
New Shoppers are very important to a store’s customer base as they have the potential to add incremental sales and replace Top Shoppers or Occasional Shoppers lost to attrition. However, retailers must realize that New Shoppers are initially low spenders and exhibit a high rate of defection. Retailers should be careful not to over-allocate their marketing budget to attracting New shoppers.
New Shopper retention rate typically runs at 40%, which is much lower than both Occasional Shoppers and Top Shoppers. Furthermore, only about 1% of New Shoppers ever become Top Shoppers and only 3% ever become Occasional Shoppers. In other words, 96% of New Shoppers will either remain low spenders or defect over the course of one year. It’s easy to see why retailers get much more bang for their marketing dollar by focusing on their Top Shoppers as opposed to an all-out strategy to acquire New Shoppers.