The Impact of Post-Purchase Upselling in 2023 (Report)
Despite the challenges, 2023 was a good year for eCommerce. Even though 64% of businesses said they’re still recovering from the pandemic, worldwide eCommerce sales were up 10% compared to 2022, totalling a whopping $6.3 trillion.
As we look back at the eCommerce landscape of 2023, one thing is clear: change is the only constant. Brands who are ready to adapt to change stand the best chance of flourishing in the uncertain economic times ahead.
In this report, we analyze the role of post-purchase upselling and its impact in 2023. We’ve drawn on proprietary data from over 40,000+ active merchants selling in the United States, the United Kingdom, German, Spain, France, Ireland, Italy, Israel, Japan, Sweden, New Zealand and Australia.
Additionally, we surveyed our users to gain quantitative and qualitative insights from industry leading retailers, eCommerce founders and CRO experts. Together, these findings form the foundation of this report.
We present the key ways in which post-purchase upselling can help you adapt and overcome some of the core challenges you’ll face in the year ahead.
Drawing on data points from tens of thousands of brands, you’ll discover the impact that post-purchase selling can have on your business as we move into 2024.
The State of Post-Purchase Upselling at a Glance
- ReConvert users collectively generated $2.42Bn in additional sales
- For every $1 spent on post-purchase upselling, retailers generated $686 in sales
- Post purchase upselling resulted in a 5.6% uplift in average order value
- Top performing stores generated 12.7% of revenue via post-purchase upselling
- The average one-click upsell conversion rate was 4.7%
- The top post-purchase upsell offers converted at 28.3%
- The average thank you page upsell conversion rate was 1.7%
- Customers viewed the thank you page 2.2 times per order
- 91% of ReConvert users recommend post-purchase upselling as an effective strategy for more sales in 2024
- 79% of ReConvert users say that post-purchase upselling gives them a competitive advantage
- 95% of Reconvert users generated additional revenue within a week
The Impact of Post-Purchase Upselling in 2023
Understanding the revenue impact of post-purchase upselling strategies is crucial for merchants seeking to optimize their sales processes and enhance customer lifetime value.
💰ReConvert users collectively generated $2.42Bn in additional sales
In 2023, ReConvert users generated an additional $2.42Bn in sales from post-purchase upselling strategies. This equates to an average of an additional $60,450 per user last year.
Given that our user base represents approximately 0.4% of eCommerce stores worldwide, this sales volume demonstrates the massive untapped potential of post-purchase upselling in 2024.
Despite upsellings proven effectiveness, strategies such as one-click upsells and thank you page offers are still largely underutilized by most brands.
With nearly all stores pursuing alternative post-purchase strategies such as email marketing and SMS, post-purchase upselling is an undiscovered strategy that’s easy to implement and offers greater returns for considerably less effort.
📈For every $1 spent on post-purchase upselling, retailers generated $686 in sales
You’ve probably heard the often touted email marketing statistic; for every $1 invested, you can generate $36 in return.
As impressive as email’s ROI is, our analysis of 2023 revealed that for every $1 spent on post-purchase upselling, sellers generated a whopping $686 in return (almost 20x greater return than email)
Put another way, in 2023, ReConvert users got an average of 68,500%% return on investment against app fees charged.
In a year where economic uncertainty looms, stringent cash flow management is critical.
It’s essential to seek out growth opportunities that offer the highest ROI to offset the impact of rising inflation and maintain profitability.
🔦Brand spotlight: How Tushy used post-purchase cross-sells to generate an extra $191,786/mo
Bidet retailer Tushy introduced a range of products that complimented their initial offering. But the challenge was how to encourage customers to actually buy these products?
After looking at various upsell and cross-sell solutions for Shopify, they found that most were clunky or seemed to impede the customer’s experience.
Then they found ReConvert. ReConvert empowered Tushy to move their cross-sell offers to the thank you page and create a smoother buyer's journey.
Tushy figured out which products customers were likely to buy together and set up specific thank you page triggers and recommendations based on customer behavior.
The result? Over the next month, their smart product suggestions tempted 2.8% of shoppers to add at least one additional item to their order (many added more).
These conversions had a meaningful impact on Tushy's numbers. The cross-sells widget added an extra $191,786 in sales, just 30-days after installation.
🚀Post purchase upselling resulted in a 5.6% uplift in average order value
Sometimes as marketers we focus too much energy on increasing traffic to our site when it would be more impactful and profitable to increase our AOV.
In 2023, ReConvert users achieved an average increase in AOV of 5.6% across millions of transactions via post-purchase upselling strategies.
By strategically offering complementary or upgraded products or services during the post-purchase phase, sellers were able to capitalize on the customer's buying momentum.
The beauty of post-purchase upselling is that you’re concentrating on visitors who already bought from you. They’re high intent, and easy to sell to again.
As the customer acquisition treadmill speeds up in 2024, post-purchase upselling is an easy way to counteract increasing marketing spend and extract the maximum value from every conversion.
🌟Top performing stores generated 12.7% of revenue via post-purchase upselling
Given that you can implement ReConvert’s post-purchase upsells with a single click, many retailers simply install ReConvert’s standard templates and don’t optimize any further.
While this approach still generates additional revenue, brands who’ve properly optimized their post purchase upselling techniques achieved a 12.7% boost in sales on average.
Unsurprisingly, brands who leveraged segmentation and triggers to personalized offers performed better on average than those opting to go with the standardized template.
💸The average one-click upsell conversion rate was 4.7%
Brands used ReConvert to serve 16.9 million one click upsell offers to customers last year, which generated an additional 1.13 million orders.
The average conversion rate for post-purchase upsells was 4.7%. Meaning for every 100 orders generated by users, ReConvert added approximately 5 additional orders.
In our survey, 73% of ReConvert users said that post-purchase upsells convert better when compared to their other marketing channels.
Indeed, when you consider that the average CTR for email was 1.89% last year, you can see how potent one-click upsells are in your post-purchase strategy.
As additional orders from upselling require no additional marketing spend, a conversion rate (not just click through rate) of 6.7% can have a tangible impact on your bottom line.
The gross margin on upsell-generated sales is typically far higher than regular orders, as there’s no additional acquisition cost.
🔥The top post-purchase upsell offers converted at 28.3%
ReConvert’s average post-purchase upsell rate of 6.7% is impressive. But by the nature of an average, it doesn’t highlight the true potential of post-purchase upsells.
The top 5% of ReConvert users achieved an average conversion rate of 28.3%, with the best users achieving a CVR of up to 37%.
While every store is different, and such extraordinarily high conversion rates may not be possible for every brand, it’s nonetheless useful to understand the truly impactful nature of well-designed post-purchase upsells and the untapped potential they represent.
🤑The average thank you page upsell conversion rate was 1.7%
The Shopify thank you page remains one of the most overlooked opportunities to generate additional sales.
In 2023, brands deploying thank you page offers achieved an average conversion rate of 1.7%. While not as high as the one-click upsells, it’s still a sizable growth in sales, with no additional acquisition costs.
Brands that deployed thank you page offers, in conjunction with one-click upsells, generated the most revenue, highlighting the effectiveness of building a complete post-purchase upselling journey.
🔦Brand Spotlight: How Ava Estell generated an extra £20,000 revenue in 30 days with thank you page cross-sells
Cosmetics brand Eva Estelle were looking to increase their average order value and boost their revenue per visitor.
In consultation with eCommerce CRO agency Shivook, the brand implemented ReConvert’s conversion monster template, and configured the birthday collector on their thank you page.
Over the first 30-day period, ReConvert generated over £21,000 in additional sales for Eva Estelle. They achieved a post-purchase conversion rate of 8%, with those who converted, adding an average of £51 to their order value.
On top of immediate extra revenue, Ava Estell collected 15,000+ customer birthdays on their thank you page. Combined with their Klaviyo automation, this flow achieved an average open rate of 51% and click rate of 9% - generating an additional $7,268 in the last 6 months.
👁️Customers viewed the thank you page 2.2 times per order
Thank you page optimization remains an underexploited step in the post-purchase experience. It’s your first opportunity to make an impression on new and returning customers.
Most brands use an email flow to enhance the post-purchase experience. While this is a worthwhile activity, combining it with a customized thank you page yields best results.
Thank you pages essentially have a 100% open rate; i.e. they’re seen by almost every customer. What’s more, data from ReConvert revealed that customers viewed the thank you page 2.2 times per order on average as they check for shipping updates.
“Thank you page customization provides incredible value - many merchants don't realize how many times their customers see their thank you page. The impressions are crazy - two, three, even up to four times per order is standard. When you think about it, that’s more impressions than any other part of the funnel - so optimization is non-negotiable”
Jacob Elbaum, CEO of Shivook, eCommerce CRO agency
Remember, customers who just bought from you are highly likely to do so again if you give them the opportunity to do so.
🔦Brand Spotlight: How feey Builds Better Relationships With Thank You Page Videos
Facing the challenge of maintaining a stellar customer experience in a margin-sensitive plant retail industry, Feey sought to enhance profitability without compromising product quality.
Recognizing the importance of the thank-you page as the initial interaction with new customers, Feey implemented a personalized post-purchase experience.
Feey utilized ReConvert's video widget to express gratitude, build rapport, and tease future videos, resulting in a memorable customer journey that fostered repeat business. They used ReConvert’s segmentation functionality to present unique videos for first-time, second-time and third-time customers.
The result? A 6.8% conversion rate on their thank you page cross-sells and, more importantly, a 22% uplift in repeat customer rate.
📣91% of ReConvert users recommend post-purchase upselling as an effective strategy for more sales in 2024
In the face of economic uncertainty and increasing acquisition costs, a whopping 91% of retailers using the strategy said that they’d be very likely or extremely likely to recommend it to another online seller in 2024.
What’s more, 72% of users said post-purchase upselling was the most impactful strategy to improve their AOV and boost profit margins in 2023.
"I've been using ReConvert for my e-commerce store, Tampon Tribe, and I'm absolutely thrilled with the results! The app has significantly boosted our ROAS, increased our Average AOV, and improved our conversion rates. ReConvert has become an invaluable tool for our business growth, and I highly recommend it to any e-commerce entrepreneur looking to optimize their store's performance."
Jennifer Eden, CEO of Tampon Tribe
💪79% of ReConvert users say that post-purchase upselling gives them a competitive advantage
As more and more players enter the market, competition is growing faster than the market is expanding.
With competitor brands vying for your customer’s attention and wallets, gaining an edge is crucial.
79% of ReConvert users say that post-purchase upselling gave them a competitive advantage in 2023. What’s more, 100% of those users say that post-purchase upselling will be equally or more important for increasing profitability in 2024.
At Mounteen, our mission is to continuously enhance customer satisfaction. ReConvert has been pivotal in this journey, offering a seamless, one-click solution that not only tailors the shopping experience to individual preferences but also strengthens our connection with customers. It's more than just upselling; it's about creating a personalized journey that customers love, resulting in increased loyalty and significant growth in our profit margins. This tool has truly redefined the win-win experience in eCommerce for us.
Vad Pishkov, Manager, Mounteen
💲Four out of five eCommerce retailers say post-purchase upselling has moderately or significantly increased gross profit margin
Rising inflation will likely impact retailers and customers in 2024. Therefore, preemptive measures to offset increased costs are essential.
More than four out of every five retailers in our survey said that post-purchase upselling moderately or significantly increased their profit margin in the 2023 trading year.
”Reconvert has been a game-changer for our business. Their innovative strategies seamlessly integrated into our system and, in just the first three months, reconvert generated an astounding additional $60k in sales effortlessly. Their approach is not just effective but also remarkably efficient, making the entire process a breeze.”
Jim Clarke, Founder - Fkn Rich Clothing
⚡95% of Reconvert users generated additional revenue within a week
Investments in many eCommerce strategies can take a long time to come to fruition. Post-purchase upselling is unique because it’s easy to implement and generates results quickly.
With ReConvert over 60% of survey respondents generated additional sales within 24 hours of installation, while 95% of users generated additional sales within 7 days.
What’s more, 97% of respondents described ReConvert as user friendly and easy, or very easy, to implement.
“ReConvert is special in that it’s one of the only Shopify apps I implement that gets measurable results in less than 24 hours. Just get going - don’t think about trying to optimize everything or build the perfect funnel - launch something quickly, get results and optimize from there.”
Jacob Elbaum, CEO of Shivook
The Key Challenges For eCommerce Sellers in 2024
In the ever-changing realm of 2024's ecommerce landscape, you’re likely to encounter challenges ranging from intense market competition to rising acquisition costs.
This section examines these hurdles and provides context for post-purchase upselling and other strategic solutions to enhance customer satisfaction and drive sustainable growth.
1. Rising customer acquisition costs & declining profitability
The (already high) costs of customer acquisition are set to keep rising in 2024. Research from SimplicityDX revealed that last year merchants lost $29 on average for every new customer acquired. While in 2013 they lost on average $9, indicating a 222% CAC rise over the last eight years.
Why will it get more expensive to acquire customers? Among the major reasons are:
- The phase out of 3rd-party cookies makes it more difficult to reach relevant audiences
- A reduced ability to track consumer behavior on mobile devices
- A greater number of advertisers driving up CPMs on auction-based platforms
In addition to rising acquisition costs, the sluggish economic outlook for 2024 means that shoppers are likely to cut-back on their spending, too.
Data shows that the average person is 102% more concerned about inflation than the coronavirus. So, this two-punch combo of rising costs, and lower consumer spending will likely impact profit margins in all sectors.
Against this backdrop, what are the key priorities to help offset rising CAC 2024?
- Increase revenue per order: Implement post-purchase upselling, product bundling and dynamic product recommendations to increase AOV and maintain profit margins.
- Data-driven personalization: Harness your first-party data to deliver personalized experiences and more relevant marketing that drive your higher conversion rates.
- Loyalty & Rewards: Bain reports that increasing retention rates by just 5% can increase profits by 25% to 95%. Design an enticing loyalty program that drives repeat purchases & fosters customer advocacy.
2. An unpredictable economic climate
Economic uncertainty has moved from a looming threat to a very real challenge. Rising inflation and interest rates, as well as geo-political turmoil, require an urgent strategic response.
High inflation poses a pervasive threat to your eCommerce operation - affecting suppliers and, consequently, cascading to your customers too.
A partial or complete recalibration of your business model may be necessary to secure a safer financial footing amid the incoming economic turbulence.
Here’s four ways to address this challenge and build a more resilient business:
- Rigorously manage cash flow: Implement stringent cash flow management procedures to ensure your business remains financially resilient in 2024 and beyond.
- Improve supply chain flexibility: Invest in building strong relationships with your suppliers, as well as diversifying your supplier base. Create contingency plans to preempt potential disruptions.
- Audit your costs: Optimize operational costs to maintain profitability and competitiveness. Reduce excess costs and free up capital to buffer inflationary pressures.
3. Evolving consumer expectations
Consumers now demand more personalized and seamless experiences. Meeting these expectations requires continuous innovation in product offerings and service delivery.
But how to meet (and surpass) rising customer expectations? Among some of the major priorities are:
- Invest in support: 52% of customers will switch to a competitor if they have a single negative experience (Zendesk) Invest in robust multi-channel support, with automated assistance and self-service options to build brand loyalty.
- Think personalization: 88% of online shoppers are more likely to continue shopping on a retailer website that offers a personalized experience, including 96% of Gen Zers and 97% of Millennials. (Elastic)
- Offer a free shipping threshold: Consumers expect free and fast shipping. Shopify’s 2023 trend report found that people spend over $3 more on the median average item & buy over $22 more on the median order with free shipping than with paid shipping.
4. Increasing Competition and Market Saturation
The eCommerce market is growing. But the downside is that it’s also getting crowded.
The proliferation of online platforms has led to a saturation of options, making it increasingly difficult for sellers to distinguish themselves.
On top of that a handful of big companies (Amazon, Walmart etc) continue to hoover up vast swathes of the market.
So it’s clear that standing out amidst the crowd is no longer just an aspiration but a critical necessity.
- Identify new products in new markets: Seek out opportunities to introduce new products in previously untapped markets, expanding your reach and customer base.
- Deploy revenue-boosting upsells: Generating additional revenue via one-click upsells and thank you page offers allows you to reinvest in marketing and outbid competitors.
- Focus on brand: Customers who feel emotional attachment to a brand have a 306% higher lifetime value with an average tenure of 5.1 years. Create meaningful connections with your customers to differentiate yourself from larger competitors, even if you can’t compete on selection or price.
Overall, 2024 poses four core challenges:
- Rising acquisition costs
- Unpredictable economic conditions
- Increasing customer expectations
- Greater competition for customers
All of these challenges are interlinked and require several prudent steps to overcome. You’ll need to focus on astute financial and logistical planning, strategies to squeeze the most out of every transaction and an emphasis on building customer loyalty to drive repeat purchases.
Final Reflections & Outlook for 2024
After reviewing the state of post-purchase upselling in 2023, and extrapolating the results into this year, it’s clear that post-purchase upselling offers e-commerce merchants a tangible opportunity to drive revenue growth, enhance customer relationships, and optimize their overall business performance in 2024.
As competition continues to grow faster than the market, it’s imperative that brands do everything in their power to gain an edge over other players in their respective verticals.
In the context of 2024, where increased acquisition costs and rising inflation pose a threat to profitability, post-purchase upselling represents an easy-to-implement, low-cost strategy that is proven to be effective in turbulent market conditions.
Rising CAC combined with reduced consumer spending may impact profit margins across the ecommerce world. This is where high-return growth strategies that maximize the value of every transaction become more and more valuable.
As you integrate these insights into your operations, consider the unique characteristics of your target audience and tailor your upselling strategies to align with their preferences and behaviors.
By doing so, you can use post-purchase upselling to position your business for sustained success in the ever-evolving e-commerce landscape.