This week we are taking a look at category buyer churn. There are three questions that we aim to shed light on.
How many buyers does a category lose and does this differ between “mega-categories”? Does the size of the category affect the churn rate? Are there levers that seem to help in gaining new category buyers?
Category churn differs between “mega-categories”
Category churn ranges from 22% to 34% depending on the type of category we are looking at. Like brands, the frequency of the category affects category churn. The lower the category frequency, the more churn we observe. Less frequently purchased categories have more light buyers, who are more likely to drop from the category altogether.
Larger categories are less affected by buyer churn
The size of the category is tightly linked to the number of people leaving the category. Categories tend to follow the same principle as brands – the larger the category the less churn it experiences. Across all category groups, we see that small categories have almost double the level of churn versus large ones.
Categories that increase assortment find more new category buyers
To offset category buyer losses recruiting new buyers is required. A path that seems to help in this regard is growing the category assortment. In Personal Care, for example, 90% of categories growing their assortment experienced an increase in the number of new buyers recruited vs last year.