In e-commerce, churn is implicit: a customer who has not bought in 12 months is considered lost. High churn forces you to replace the entire base every 2–3 years with new acquisition, making the business expensive to sustain.
There is no direct report — churn compares two points in time (who bought last year vs. who returned this year). Quick shortcut: use repeat purchase rate as a proxy (Shopify: Customers → Repeat Purchase Rate) — not exactly the same thing, but a number you can get in seconds instead of building a full cohort analysis with apps like Lifetimely or Triple Whale.
With 50% annual churn, you need to replace half your customer base just to maintain revenue. That means every dollar on retention competes directly with acquisition, and acquisition typically costs 5–7× more.
| Status | Range |
|---|---|
| Healthy | < 35% annual (retention > 65%) |
| Alert | 35–55% annual |
| Critical | > 55% annual (single-purchase business model) |
The main cause of churn in e-commerce is not price but lack of purchase occasion. A loyalty program with points or second-purchase benefits reduces churn 10–20 percentage points in most cases where it is properly implemented.
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