As mobile shopping continues to expand, there is significant potential for retailers to gain mobile wallet share through high-quality shopping app. The number of tablets in use throughout the U.S. is expected to reach 280 million by 2017, according to Yankee Group. Smartphone use is also expected to expand by 55 million to 250 million units in 2017. This growth presents a parallel opportunity to increase shopping app penetration: Today, 60% of the time consumers spend on their phones is devoted to mobile apps. Increasingly, these users are demanding more situational context and personalization.
Savvy retailers yearn to better understand and anticipate why and how consumers use Internet, brick-and-mortar and social retail apps. Using data to track and measure app user experiences and retention can deliver deep insights to those retailers intent on driving retail app engagement and revenue.
Consequently, a study conducted by Yankee Group and commissioned by Mobidia offers a new level of insight into shopping app penetration; engagement and usage in minutes; unique sessions; and more. Research results were exposed in a January 2014 white paper, titled: Does Your Shopping App Stack Up?. Among the findings, the report highlighted four top forces driving investments that improve customer engagement; evaluated OS app, brand and retailer usage data; examined the potential for apps to offer highly interactive and personalized experiences; and discussed the clear advantage of shopping apps over mobile web sites to provide better mobile user experiences.
“Retailers would benefit from designing a strong mobile first application experience, taking into consideration how they can use mobile to complement and enhance a physical experience by leveraging smartphone features such as location, payment capability or social network accessibility,” said Chris Hill, VP of Marketing for Mobidia, in an interview with Retail TouchPoints. “Retailers should consider thinking beyond simple mobile shopping experiences and incorporate shopping aids, loyalty and rewards programs and other shopping enhancements and aids.”
Top Four Drivers
The top four opportunities driving the mobile app market, according to Yankee Group, were discussed in detail. They included new kinds of consumers, experiences, opportunities and technologies.
For example, consumers demand mobile applications that are updated constantly, personalized and unique to meet their needs, according to Yankee Group research. Capturing data such as individual user’s location, stated preferences, behaviors and social interactions helps businesses deliver more customized app experiences. Mobile apps provide unique opportunities to reinforce brand, increase accessibility, push communications of special offers, generate repeat purchases, increase social sharing and develop rich profiles of customers. And while 93% of marketers want to test and personalize apps, only 75% of IT personnel want to analyze, leverage data and fine-tune app marketing. New technologies allow marketers to create app more independently, similar to the online world.
"Mobile shopping is all about mobile applications and the data clearly shows the correlation between high app quality with enhanced user experiences and higher shopper engagement and usage," said Sheryl Kingstone, Director of Enterprise Services at Yankee Group, and author of the white paper. "Retailers that want to drive more engagement with mobile shoppers need to understand what apps are being used — not just downloaded — and the features of those apps that are driving the increased usage. Tracking and measuring these metrics on a regular basis and benchmarking the results to the competition is key to a retailer's success"
Mobile App Trends
The white paper identified several trends related to mobile app quality, experience and engagement. Among them:
- Social shopping applications such as Shopkick and Groupon drove the highest level of application engagement, at 49%;
- Internet retailers such as Amazon and eBay followed closely, with 47%;
- Traditional brick-and-mortar retailers such as Walmart and Kohl's trailed with 43%, but had the largest distribution of engagement results, with some companies well above the average.
- Apps offering customer services to enhance the mobile shopping experience drove more engagement. For example, engagement at Kohl's (73%) and H&M (61%) was higher than most apps in all segments. The apps for both of these companies offer features other than just purchasing options, such as inventory checks, rewards, and look books.
- Great apps not only help retailers acquire new customers but also enhance loyalty campaigns;
- Many mobile apps offered different experiences and qualities in their Android and iOS versions. Engagement metrics clearly showed iOS apps benefiting from better applications; and
- Well-made apps provide a much better user experience than mobile web sites. They deliver a different experience by harnessing key enablers such as camera, local storage, push notifications, augmented reality, accelerometers, offline access and more.
In conclusion, the white paper noted that situational context and personalization will become increasingly important throughout 2014. Recommendations included using competitive insight to benchmark experiences; tracking engagement over time and avoiding aggregation; and comparing app sessions and minutes per user for deeper insight.
As mobile shopping expands, “brands with strong mobile apps will continue to gain share of the mobile wallet,” stated Hill. “Smartphone users don't have the patience or attention for bad apps, and are quick to move on to apps that offer a better experience.”