Mobile Apps: A Critical Piece In The ECommerce Growth Puzzle

By Devdutt Manay
07 November, 2022

Ecommerce has come under tremendous pressure lately for a few reasons:

  1. The unsustainable growth fueled by the pandemic is tapering
  2. Increased competition has led to higher acquisition costs 
  3. Stringent privacy policies introduced on platforms such as apple make it challenging to reach customers like before

Brands are increasingly turning to mobile apps to solve a plethora of challenges. While eCommerce growth has its own challenges and numerous aspects are crucial for online retail growth (such as shipping costs, payments, and marketing), the mobile app emerges as a critical channel with tremendous revenue potential and the ability to provide a best-in-class customer experience.

Let’s start by looking at data that will put things in perspective:

Mobile user growth climbing consistently

According to a Statista report, there are currently a little over 6.5 billion smartphone subscribers worldwide, and it is estimated to touch almost 8 billion in the next 5 years. And it’s not showing signs of slowing down anytime soon. 

Ecommerce shifting rapidly to mobile

Shopping on mobile has taken off in recent years and with the rise in features, it’s adding more convenience and personalization to the entire shopping experience.

According to an Insider Intelligence report, by 2025, retail m-commerce sales should more than double to reach $728.28 billion and account for 44.2% of retail eCommerce sales in the US.

This means that nearly half of all eCommerce purchases will be through mobile devices in the US three years from now. And the story isn’t any different in other parts of the world where mobile shopping is on the upswing.

Mobile app driving CX in eCommerce

According to Adjust Mobile app trends 2022, e-commerce app installs increased by 12% year-over-year in 2021, and sessions rose 15%. This shows that app installs are consistently growing and, more importantly, buyers are spending more time on apps.

From the above data, it is clear that mobile users will continue to grow, consistently bringing in new users to mobile shopping. Mobile apps have established their dominance in the experience space, resulting in more apps being built, downloaded, and used.

With that said, let’s dig a little deeper into why consumers and brands love mobile apps.

Exceptional customer experience

Ecommerce has been the most consumer-centric vertical given its immediate impact on the business. Brands have innovated in every aspect, including product catalogs, streamlining payments, shipping options, personalized offers and discounts, and more. This has contributed significantly to offering superior experiences across different touch points.

Additionally, enhanced security measures have built trust and confidence in online shopping.

But while mobile-friendly websites have evolved quite a bit over the last decade, it needs to match up to the sheer delight a mobile app can bring to the overall shopping experience.

And there is a good reason for that. Like many other online shoppers, you and I are used to pulling out our phones to look for products and learn about them. Most of the comparing and buying decisions happen from where you are, including access to ratings and reviews. But with a mobile website, this experience is ridden with friction and leads to high abandonments. Imagine if your brand had an app – you could collect valuable data for nurturing and driving higher conversions. It is no surprise that 49% of buyers have made impulse purchases after receiving a more personalized customer experience via apps.

Billie, a direct-to-consumer women’s razor brand, is shaking up the industry with its exceptional customer experience. The Billie app is designed to be user-friendly and intuitive. It’s easy to navigate, and there are helpful tips and tricks for using Billie products. The app also features product videos and tutorials, as well as behind-the-scenes footage of the Billie team. All this along with a great design leads to an exceptional experience.

Personalization at scale

A mobile app gives you the power of data-driven tactics to personalize the experience for every user at scale. This can translate to a personalized home screen, discounts, and offers based on past purchases or delivering content related to recent searches on the app. It’s all about how well you understand the customer and how effectively you use that data to delight them in their journey. Notification campaigns for new users, returning users, new launch broadcasts, or cart abandonment are great examples of personalizing user experiences to drive revenue, increase conversions or create more engagement. 49% of shoppers think their shopping experience would be better if retailers offered promotions or deals specific to past purchases, according to a Google survey.

Skinsei, a brand that sells customizable skincare products, has nailed personalization using a mobile app. The Skinsei app includes a quiz that helps customers determine their skin type and provides recommendations for the best products to use. The app also tracks your progress over time, so you can see how your skin changes as you continue to use the products. This data is used to further personalize your skincare routine, ensuring that you are always getting the most out of your products.

Customer retention powerhouse

Typically brands turn to retention only later on, but high acquisition costs have put the focus back on retention to create a stable revenue stream. LTV (lifetime value) has emerged as a popular metric to track, with the potential to cover higher CAC if played right. Brands with a mobile app typically see higher AOV and higher repeat rates. According to a recent report, loyal app customers produce 3.5 times more revenue than other shoppers and are 3 times more likely to make a repeat purchase. This is possible due to powerful segmentation and cohort analysis-based offers and discounts that are delivered effectively over a mobile app. In addition, in-depth retention strategies such as memberships, subscriptions, and loyalty programs help in a predictable revenue stream while building a community of loyal customers.

Under Armour is a brand that is known for its high customer retention rates. In fact, the company boasts a retention rate of 94 percent. This is largely due to the brand’s strong mobile app strategy, which includes customer loyalty programs. One such program is called “My Fitness Pal.” This program allows customers to track their food intake and exercise habits. In return, customers receive rewards for their efforts. These rewards can be used to purchase Under Armour products.

Take charge of your brand

Most young eCommerce companies focus heavily on sales, while brand building takes a backseat. Only once the category starts getting crowded do they feel the need to build a brand. A mobile app, if done right, can be a great extension of your brand both in terms of visual design and user experience design. Established brands have witnessed higher customer stickiness and better campaign response rates. A mobile app is a great medium to cement your brand within existing audiences and build brand affinity with new users.

For example, Lenskart is a brand that has nailed the visual design and user experience design on its mobile app. Lenskart uses creative visuals throughout the app to make the shopping experience more enjoyable. For example, when users view a product, they can see how it would look on them with the “try on” feature. This allows users to get a better idea of what the product looks like before making a purchase and creates a strong brand differentiation.

Move beyond 3rd party platforms

Let’s talk money! You have most likely started with a hero product on Amazon or a similar platform and driven audiences to your website that offers a more extensive catalog – a great strategy to lessen dependence on 3rd party platforms and improve the topline. But this strategy only pays off if you provide an experience similar to the 3rd party. Remember, it’s their app vs. your website. Not a fair contest. In Google’s survey, 59% of shoppers said that being able to shop on mobile is important when deciding which brand or retailer to buy from. A mobile app can bring critical air cover from a branding and personalization standpoint to increase sales by providing a benchmark customer experience.

‘Licious’, a popular brand for fresh and frozen food in India, moved beyond 3rd party platforms to give their customers a superior experience via their mobile app. One of the key features of the ‘Licious’ app is that users can customize their orders according to their dietary preferences. In addition, the app offers exclusive deals and discounts on food orders. The app’s 10 million plus downloads are a testimony to the successful creation of its own mobile channel.

Own the customer data

The most significant advantage of a mobile app is that the ownership of data stays with you, making it such a powerful channel. You can collect and analyze data points such as region, demographic, search trends, purchase history, shopping behaviors, feedback, and many more. Besides being useful for marketing, advertising, and improving services, this data lets you do revenue forecasts, strategize new products, and launch in new markets – the possibilities are endless.

Additionally, mobile apps offer usage data such as time spent on the app, most visited screens, etc., which helps guide your mobile app roadmap to deliver higher engagement and a better experience.

When you think of online shopping, the first name that comes to mind is probably Amazon. 

The company has long been known for its data-driven approach to business. And it’s no different when it comes to its mobile app. Amazon has a deep understanding of what its customers want and how they interact with the app. And it uses that data to drive its business decisions.

With your own mobile app, you can now collect, analyze and leverage this kind of data adding more power to your marketing efforts.

Final thoughts

Your customers spend more time on mobile and buy more via the mobile channel, which clearly indicates their preference for better and more convenient experiences. Brands must meet their customers where they are or risk losing market share and becoming irrelevant.

Mobile apps will play a vital role in the future of eCommerce as a hub that brings together all the other business elements and delivers it as one seamless experience. Your brand needs a mobile app, now more than ever, to build a brand of your own, and offer personalized experiences with an in-depth understanding of the customer, ultimately resulting in business growth and higher market share.


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