l example of a company with growing cohorts. At the time of IPO, Chewy sold pet products online to nearly 11 million active customers. Their cohort repeat rate is so strong, “existing customers account for approximately 90% of our net sales in any given period,” and “our net sales in fiscal year 2018 would have grown by 20% fiscal year over fiscal year as a result of increased spending among our customer base without any net increase in customers.“ As an example, the 2015 cohort generated sales of $287mm in 2018 which was 165% higher than sales generated in 2015. A chart of healthy repeat cohorts looks like the below:
i) they expanded the breadth of products they offer customers and now have 45,000 SKU’s; iii) they improved the customer experience with things like overnight shipping, which they can do to 80% of the US thanks to 7 strategically placed fulfillment centers. In summary, growing your cohort spend is not just about offering more products, it’s about offering a better experience and more ways for your customers to buy.
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