The economy is always changing, and the first half of 2025 has been no exception. Market uncertainty has caused customers to cut back on spending. This has led to changes in key ecommerce metrics. Even though consumers are hesitant to spend, a nimble strategy and good partners can help you find opportunities to succeed.
As a Decile Fashion & Apparel client examined their March 2025 metrics, they noticed a drop in returning customer revenue Year over Year (YoY) and wanted to learn more about that perceived dip in performance. Together with Decile, they investigated the data, allowing the brand to uncover which factors contributed to the decline – and identify the specific customer segments that they could take immediate action on to get back on track.
Revenue Isn’t Everything
Revenue is an important metric, but in this case, it didn’t tell the whole story. For a fuller picture, the brand took a look at average order value (AOV) and order volume, comparing March 2025 to March 2024.
They found that:
- Net revenue decreased ⬇️
- Order volume decreased ⬇️
- AOV increased ⬆️
While returning customers in March 2025 spent less overall and purchased less frequently, the value of their orders was higher than March 2024. High LTV customer spending was strong, but the orders would ideally need to be more frequent.
Zooming Out
In seeing the dip in returning customers, the Decile team and the apparel brand examined if it was isolated to that segment, or an overarching trend.
Comparing the same periods for all customers (not just returning), the story was different:
- Net revenue increased ⬆️
- Order volume increased ⬆️
- AOV decreased ⬇️
Even though returning customer revenue was down, the business was still outperforming the previous year.
To see how this was possible, we looked at first-time customers only. If overall revenue is up but returning customer revenue is down, we can infer that first-time customer revenue increased enough to overcome the dip. As we looked at the new customer group, we found metrics that mirrored the overall customer comparison:
- Net revenue increased ⬆️
- Order volume increased ⬆️
- AOV decreased ⬇️
Double-Clicking into Returning Customers
Returning customers is a broad term, so we wanted to see if certain types of returning customers stood out.Treating the returning customer segment as the total, we looked at performance across segments within the returning customer group. Two stood out in particular: customer tenure and age.
Looking at tenure (how long someone has been a customer), we found that all tenure buckets experienced drops in order volume. However, two buckets saw a larger drop than the average of 15%.
For customers who were acquired between 3-12 months ago, order volume dropped almost 50% more than the average. The AOV for this group was average compared to the full segment.
For age, we wanted to see if the drop was coming from the brand’s target age groups, or from customers who weren’t in the target bracket. We discovered that ages 25-45 had the highest decline in order volume with a dip 50% higher than the average. This segment closely aligned with the bulk of the customer base. AOV for this segment was up 26%, which was not enough to compensate for the loss in orders, resulting in a net decrease in revenue.
Is This the Result of an Internal or External Factor?
To understand the difference between performance of first-time and returning customers, some questions to consider are:
- Was there a meaningful shift in the ratio of marketing spend between new and existing customers?
- Have there been any campaigns or focus on new customer acquisition?
- Was there a change in marketing strategy towards returning customers?
- Was there a shift in product offerings that could ostracize returning customers?
- Did something happen externally (i.e. going viral) that led to a large increase in new customers?
Taking Action
As for the two segments of customers that underperformed, a few strategies can be considered:
- Learn more about the products that are purchased most frequently with this segment.
- Are you sold out of a popular item?
- Have prices changed?
- Has the quality of the item changed?
- What is their sequential product purchasing preference?
- Create personalized campaigns.
- Was the drop in performance a result of scaling back on personalized promotions to these groups? Encourage more purchases with campaigns that target these specific segment’s preferences.
Conclusion
As we saw with this brand, monitoring your success metrics can help you discover any concerning trends and make quick adjustments. With the help of Decile, they were able to break abstract questions into tangible, focused analysis with easy-to-access data.
Inclined to dig into your own data? Take a look at the New and Returning and Snapshots & Trends Ecomm Reports in Decile. We’re here to help you access and understand your data, and fine tune strategies.