We took $24 million from 160,000 orders this year: 96,000 first orders averaging $132 and 64,000 repeat orders averaging $177. A first order leaves $52 in contribution margin before marketing. Blended acquisition cost is $46, but paid social, which takes 63% of the $4.8 million budget and brings 52% of new customers, now costs $61 per customer, up from $38 two years ago. Four sitewide sales a year bring in 40% of new customers, and only 16% of them order again within 12 months, against 34% of those who first buy at full price. Overall, 27% of new customers reorder. Returns run at 11%.
Challenges- A first order from paid social loses $9 after acquisition cost, and most customers never place the second order that would recover it.
- Sales have trained a large part of our audience to wait for a discount. Sale shoppers buy one item, rarely return and pull down first-order value.
- One channel sets our growth and our costs. When paid social costs rise, we have no other source of new customers large enough to absorb the change.
We will focus on- Full-price buyers setting up or refreshing a bedroom, who buy sets and bundles and come back for the next room.
- The second order within 90 days, starting with the 212,000 past customers who have bought from a single category.
- Building creators, affiliates, referral and paid search into channels that together bring more new customers than paid social.
We will not- Four sitewide sales a year. We keep two, in November and June, and accept a lower new customer count in the months that lose a sale.
- Listing on online marketplaces. It would add order volume, but at a lower margin and without the customer's email, which is what the repeat strategy depends on.
- Podcast and connected TV advertising, which our agency proposed. We cannot yet measure them well enough to justify moving budget from channels we can.