The shift to mobile has profound consequences for retailers. Recent research estimates that almost half of online retail sales in the seven largest EU markets will take place on mobile devices by 2018. In the next three years, phone and tablet commerce in the UK alone is expected to grow more than 50%. A recent Deloitte mobile survey found that 83% of people interact with their smartphone within the first 60 minutes of their day. For retailers, the question isn’t whether to focus on mobile, it’s how.
All too often, retailers think of mobile apps as “nice to have” rather than a crucial component of a sophisticated cross-channel strategy. Shoppers are moving faster than ever before, hopping from device to device, buying wherever they are. Only those retailers that evolve at a shopper’s pace will thrive.
So you already have a mobile website, why invest in a mobile app? In the following pages we will set out the top 10 reasons why retailers should consider creating transactional mobile apps as part of their cross-channel strategy.
1. Apps can do what websites can’t
One fact that is indisputable is that native apps provide the fastest, most reliable experience to users. Compared to mobile web, apps are far more responsive and have far fewer connectivity issues. Mobile apps offer retailers a new way to relate to customers and to provide both more convenient and more personalised shopping experiences. Given that a huge subset of your customers will be interacting with their phone first thing in the morning, being able to place your logo at the front and centre of this device is a very powerful opportunity. Additionally, a native app enables you to send promotional push messages and in-app inbox rich messages. Push messages are a hugely effective marketing channel for brands. With open rates far higher than email, they’re direct, timely, and reach your customer wherever they are. Combine this communication tool with location-based technology and you’ll be able to reach your customers at the most opportune moments and enhance the customer journey. Apps can also incorporate smartphone features such as GPS, Bluetooth, address book and the camera for product and credit card scanning. Native apps also benefit from inclusion in App Stores, where they can be discovered by new customers.
2. Apps cater to the cross-channel customer
Thanks to the growing popularity of smartphones and tablets, more consumers now want to be able to shop using multiple channels. It’s not a face-off between bricks-and-mortar and online. Instead, with mobile devices at your customers’ side day and night, it’s become a matter of merging digital and in-store efforts into a seamless retail experience that engages shoppers at home, on the move and in-store.
As the divisions between online and offline blur further, we will see more and more retailers adopting a “cross-channel” approach. Retailers that enable customers to move easily between different channels are at the forefront of cross-channel commerce. It’s now widely accepted that customers spend much more when brands sell through a variety of well-connected channels. For example, House of Fraser figures show that shoppers who buy from the company over mobile, in store and online spend more than five times as much as those who only buy from the desktop site alone.
As consumers rapidly adopt new technologies as well as more convenient shopping and payment platforms, retailers must adapt to remain relevant. Part of that necessary evolution is the creation of a native mobile app. Your e-commerce app should be a crucial part of your cross-channel retail presence, not an optional add-on. The top e-commerce apps are integral elements of a much larger marketing strategy.
3. Meet consumer demands
96% of the Internet Retailing top 25 retailers and 43% of the top 125 retailers have transactional mobile apps. Why? The answer is simple, customers demand them. Mobile apps are becoming the preferred way of interacting with brands among the majority of consumers. According to recent research from Weve, Vodafone, O2 and EE’s joint mobile marketing network, 46% of 18- to 34-year-olds said mobile was their “first screen.” Take this in comparison to the 17% who cited TV as their most important screen, and think of the budgets many brands invest in television marketing.
4. Meet sales targets
According to Juniper research, the m-commerce market will reach £2 trillion in 2017, up from £93 billion in 2013. For many retailers, continued success will therefore depend on how well they anticipate, embrace and cater to changing consumer behaviours. Apps are the fastest growing segment in ecommerce. According to this year’s Internet Retailer Mobile 500 report, ASOS’s app brought in £40 million in revenue in 2014 (90% growth) and ASDA’s app brought in £81 million in revenue (91% growth) in the same time period. The same study found that retail apps capture 42% of mobile revenue for the top 500 retailers. Analysing our own data from 2014 compared to 2013, we found that our customers’ iPhone app sales had increased by an average of 67%, while iPad sales increased by 58% and Android increased by an average 206% in like-for-like sales. This upward trajectory is expected to increase further in 2015. It’s time to invest in mobile.
5. Increase conversion & window shopping
We consistently hear from our customers that both conversion and average transaction value are higher on their apps than their mobile sites. Additionally, tablet apps are showing a marked increase in profitability and conversion across the board. Our customers’ apps boast an average of 1.75% conversion (our highest being 3.14%) compared to an industry average of .98% for ecommerce mobile websites.
Mobile apps may not achieve as much revenue as mobile or desktop websites, but brands should not discount the window shopping (or “showrooming”) function of mobile apps. According to an ABI Research survey of US customers, 40.4% of respondents who had downloaded a retailer branded app said that as a result, they bought more of the brand’s products and services and 45.9% said the app caused them to visit the store more often. According to Walmart, customers who use its app spend 40% more than customers that don’t. Furthermore, Mothercare, an NN4M customer, finds that the conversion rate in its apps is more than double that of their mobile website.
6. Increase customer loyalty
As a loyalty tool, an app installed on a phone is a great way of keeping in touch with customers and allowing them to sign up for deals. Push messaging gives retailers the power to connect directly and personally with their customers. According to a survey by Responsys, promotional push notifications have a 50% better open rate than promotional emails. Unlike emails, push messages appear right on a smartphone’s lock screen and the recipient must act on each message (either by tapping to open it or tapping to dismiss it), which means that it is easier for them to be driven directly to your app. Tie this in with iBeacon technology, and you can greet customers when they walk into your stores, send them helpful information about the outfit on a certain mannequin, and even offer special discounts to customers who have downloaded your app. By offering engaging features beyond simple product listings and purchasing ability, such as style recommendations, how-to videos and exclusive offers, you will be able to keep your customers coming back again and again.
7. Improve in-store experience
Mobile apps offer unprecedented opportunities to connect with your customers while they are physically in your stores. Let’s take the example of a customer who walks into your store and who has your app on their smartphone. This is a customer who has opted in to interacting with the retailer and is more likely to be receptive to sales messages. It’s still early days, but geolocation-specific personalisation has the potential to be an incredibly useful tool for retailers. The possibilities are endless. You could use iBeacon technology to welcome this customer to your store, and if they have an item in their wish list, you could notify the customer if that item is available in their size. You can even add an “in-store mode” to your app with queue-busting technology including in-store checkout, barcode scanning, mobile receipts, maps and stock availability. If your customers opt in, you can track their location to provide them with an app designed specifically for that store. Your customers could make lists by speaking into their microphone and they could search for products by typing in a word or phrase, and the app would show them where the product is located.
8. Personalise your shopping experience
Mobile apps allow retailers the unprecedented opportunity to engage personally with their customers and facilitate a new kind of conversation between the brand and consumer. New developments in mobile technology enable you to use push messaging, in-app messaging and many other tools such as widgets and interactive notifications to send relevant and personalised communications to your consumers. The combination of push notifications and in-app rich messaging has created a truly powerful solution that has been proven to improve conversion, engagement and revenue.
Our customers report an average 35% response rate on messages sent. If the push message mentions a sale, we see an average 85% response rate.
Having a mobile app allows you to not only engage your customers, but to easily track and understand their behaviour. Our customers use our intuitive retail-focused mobile analytics tool to gather precious information on just about every aspect of how users interact with their app in general and at any given point in time. This enables retailers to further personalise their app-based interactions with customers as well as make informed business decisions.
9. Get to know your customers
Having a mobile app allows you to not only engage your customers, but to easily track and understand their behaviour. Our clients use our intuitive retail-focused mobile analytics tool to gather precious information on just about every aspect of how users interact with their app in general and at any given point in time. This enables retailers to make informed decisions about their product offering and the way they do business.
10. Simplified mobile payments
Apps make payment incredibly easy by using built-in smartphone features. Retailers can take advantage of the phone’s camera to allow credit card scanning, address book and saved customer details via a secure keychain. By mid-2015, UK retailers will be able to use the iPhone Touch ID to allow payment authentication via Apple Pay. This will prove indispensable if retailers plan to expand their in-store offering to include in-store mobile self-checkout, as some international retailers have done. By introducing self-checkout apps, retailers can fulfil the function of physical checkout stations at a fraction of the cost.