It's the single clearest indicator of whether a business compounds or has to buy every sale. A brand where 8% of customers reorder is buying growth continuously. One at 25% is accumulating an asset.
The window matters and is frequently left undefined, which makes the number meaningless. A 12-month repeat rate and an all-time repeat rate are different metrics, and all-time flatters older businesses. Pick a window that reflects your natural purchase cycle and hold it constant.
For consumables the useful window is usually 90 days; for considered purchases, 12 to 24 months. Measuring a mattress brand on 90-day repeat rate tells you nothing.
Formula
Repeat Purchase Rate = Customers with 2+ Orders ÷ Total Customers (in window)
Always state the window. An undefined repeat rate is uninterpretable and, in practice, usually chosen to look good.
Why Repeat Purchase Rate matters
Repeat purchase rate sets your maximum acceptable customer acquisition cost, which determines whether you can win competitive auctions. A brand at 22% can bid roughly 20% more than one at 8% for the same click, on identical products — and over months of auction pressure that gap compounds into market share.
The bid-ceiling arithmetic
Two brands, identical $90 product, $40 contribution per order. At 8% repeat rate, lifetime contribution is about $43. At 22%, about $51. The second brand can pay nearly 20% more per acquired customer and remain profitable — so it wins auction positions the first can't afford, and acquires more customers as a direct consequence of retaining them better.
Benchmarks
- Consumables (90-day)
- 25–40%
- Apparel (12-month)
- 20–30%
- Considered purchase (24-month)
- 10–15%
Ranges drawn from Digital Squad client accounts and published industry data. Treat them as orientation, not targets — your category may differ substantially.
Common mistakes
Not defining the measurement window
The most common error. Without a stated window the number can't be compared to anything, including your own past performance.
Ignoring time-to-second-purchase
Two brands at the same repeat rate behave very differently if one's second purchase comes at 30 days and the other's at 200. The earlier one recovers CAC far faster.
Counting subscription renewals as repeat purchases
Auto-renewals measure churn, not repurchase intent. Mixing them overstates genuine repeat behaviour substantially.
Not segmenting by acquisition source
Discount-acquired customers repeat at measurably lower rates. A blended figure will lead you to overinvest in the channels producing your worst cohorts.
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