Why retailers shouldn’t overlook the value of m-commerce apps

Recent stats suggest that the mobile web has the edge over apps in terms of m-commerce sales, but this doesn't mean retailers should dismiss apps.

Date published
September 07, 2016 Categories

Recent stats suggest that the mobile web has the edge over apps in terms of m-commerce sales, but this doesn’t mean retailers should dismiss apps. 

Five to ten years ago, after the release of the first iPhone and before the widespread adoption of responsive design, there was a genuine decision to be made between apps and mobile web for retailers.

For a time, before Apple’s rivals got their acts together, mobile web essentially meant iPhones. In turn, this meant that having a mobile commerce app was a real alternative to a mobile website, and could deliver a better user experience in many cases.

Now things are different, and few would argue that an app should be an alternative to a mobile web presence, but rather whether retailers should have an app as well.

In this article I’ll look at the stats, as well as the arguments for retailers building mobile apps to complement their mobile web presence.

Mobile web vs apps: the stats

Recent comScore stats revealed that, in five of the top European markets, the mobile browser is more popular than the app for shopping. 

A US Forrester/RetailMeNot survey (PDF) (August 2015), found that 43% of respondents had purchased by mobile browser in the previous quarter compared to just 30% who had purchased by app.

These stats suggest the mobile web is ‘winning’ but they don’t necessarily tell the whole story.

Indeed, in the UK, just 32% of retailers have mobile apps, while many more have mobile-friendly sites. So, many customers simply don’t have a choice between apps and mobile web, depending which retailers they choose to shop with.

Stats from a recent Criteo report show a different perspective. It finds that apps account for 54% of mobile sales among its clients, ahead of 46% for mobile web.

The conclusion to draw here is that, while mobile web will always win for volume of traffic, apps can compete on sales and transactions.

Or, to put it another way, mobile app users buy more.

Why might app users buy more?

There are a few possible reasons, mainly around the ability to store customer data and tailor the experience for users.

1. Loyal, repeat customers are more likely to download apps

Apps allow retailers to provide a better, more personalised experience for their most loyal customers.

These loyal customers are also the most valuable in terms of revenue for many retailers. It can pay to provide an app that enhances the shopping experience for them.

For example, I use the Majestic Wines app regularly as it records my purchase history and preferences. So I know which wines I’ve enjoyed when I need more.

I’ve never actually shopped direct from this app, as I tend to head to the local store, but it still adds value for me as a loyal customer.

Apps target these loyal customers and enable retailers to target this segment more effectively.

2. Data and personalisation

Apps can be great from a data perspective, as Olly Cooper, Co-Founder of Bijou Commerce explains:

“Apps can provide a wealth of data, and this can be extremely valuable in terms of product popularity, and also for understanding individual customers and providing a personalised shopping experience.

The level of data acquired through an app allows retailers to adapt and improve their service in real time. We know that personalisation drives sales, and an app is uniquely able to fulfil this.”

3. Ease of purchase

A well-designed mobile-friendly site should make purchase, and checkout, as smooth as possible.

However, saved payment and address details on apps can make the checkout process that much easier as customers will simply need to enter a username and password in many cases.

4. In-app notifications

Apps also have the functionality to send push notifications to users, informing them of special offers, new products, and generally prodding them to make a purchase.

It works too. A study by Netmera (2015) showed that push notifications increased the number of orders by a massive 180%.

According to Olly Cooper:

“The ability to send personalised offers that will be almost immediately seen by customers, with a track record of success, is a feature that singlehandedly proves the value of apps.”

5. Customer experience

Helen Colclough, Ecommerce Development Manager, River Island:

“Customers perceive native apps to be a cleaner shopping experience, more trustworthy when they consider signal speed or security and an easy way of quickly accessing their favourite retailer’s digital channels in comparison to the mobile web.

Apps are the new browser bookmarks, email newsletter, credit card AND shopping list. Habitual usage of your app both in store and online is the Holy Grail of the engaged returning customer and absolutely worth pursuing.”

So, do retailers need apps as well as mobile-friendly sites?

The answer to this question will depend on the retailer in question. Many will consider that just having a responsive or some other mobile-friendly site will be enough.

It may be for some, but retailers should at least consider the potential benefits of apps, as Olly Cooper explains:

This decision needs to be regularly reassessed, based on the changes surrounding the mobile and retail industries, competitors, and of course the individual situation of each business.

It may be more of a challenge to achieve app downloads, but ultimately, once you’ve managed to claim that real estate, the investment starts to pay off.”

One example of this is the Missguided app. The retailer recently decided to release an app, and so far it’s working.

Nitin Passi, founder and CEO, said:

The revenue run-rate of the Missguided shopping app went from zero to £30m within just four months of the app launch… the app now makes up 13% of our online revenue.”

There are potential downsides to apps. Retailers need to account for development costs, while it can be a challenge to get your app on customers’ smartphones, and to get them to use them regularly.

For this reason, apps may not be for everyone but it would equally be unwise to dismiss them altogether.

Apps can be great tools for improving customer retention, and they allow retailers to be more device-specific than the mobile web allows. Essentially, this allows retailers to tailor the customer experience more effectively and provide some of their most valuable customers with a better all-round experience.

Over on ClickZ Intelligence, we have some detailed best practice reports on m-commerce. These are:

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