Cohort analysis tracks and analyzes the behavior of a customer cohort over time. It is an important part of retention analysis where you see how different customer groups behave and how their loyalty progresses.
Cohort analysis usually is displayed in the form of a table of matrix, where all orders of the customer cohort are recorded. Thus, you see when people shop, how the average time between orders plays out in practice and when each group is ready for re-engagement.
Cohort analysis lets you compare the retention metrics of various cohorts - by product bought, by campaign of acquisition, and so on in order to optimize your marketing and double down on efforts and products that bring loyal customers. Also, cohort analysis helps you run targeted campaigns for select customers - a win-back campaign for those that are slipping away and a VIP perk one for the most loyal for maximum relevance.
Here's how cohort analysis by product looks in Metrilo: