Cohort Analysis
Pronunciation: KOH-hort
A method of segmenting customers into groups based on a shared characteristic or time of first purchase, then tracking their behaviour over time.
Full Definition
Cohort analysis in retail analytics groups customers who share a common acquisition date, promotional exposure, or behavioural milestone and monitors how those groups perform across subsequent periods. It allows analysts to distinguish genuine behavioural trends from compositional changes in the customer base. Common retail applications include evaluating loyalty programme sign-up cohorts, comparing seasonal shoppers across years, and measuring the long-term effect of a price change. Editors should not confuse cohort analysis with segmentation, which groups customers by static attributes rather than time-based entry points.
Usage
Usage note: 'Cohort' should not be used loosely to mean any customer group or segment; it specifically implies a group defined by a shared time-based event.
In Context
- "A cohort analysis of customers acquired during the January sale showed 40% higher 12-month retention compared to non-sale acquirees." — CRM analytics report
- "The editorial team was asked to ensure that 'cohort analysis' and 'customer segmentation' were not used interchangeably in the report." — Editorial review note