Apps in retail are suddenly a topic of parlour conversation again.

There are those who see them as a distracting use of resource, difficult to update and subject to the whims of the app store.

Others see them as the best way to create slick user experiences that allow loyal customers to convert on mobile.

Here's why it's now or never for retailers thinking about investing in native apps.

1. Mobile growth is quicker than anything we've seen

Mobile now accounts for 27% of ecommerce transactions globally, according to Adyen, and 30% in the US, according to a study by Criteo.

The speed of mobile commerce growth is outstripping that seen during the original ecommerce boom.

Though much of recent debate has focused on Google's cross-device tracking to understand how mobile impacts conversion, many retailers are still unable to offer a slick journey to purchase on a mobile device.

2. Native apps can be a joyous experience, if only more retailers got the basics right

A symptom of retailers repurposing ecommerce infrastructure for their apps is the prevalence of clunky registration and checkout experiences.

The majority of user frustration and bad reviews come from these two ends of the app purchase journey.

Judo Payments, a mobile payment specialist, has reviewed the checkout experiences of the IMRG Experian Hitwise Hot 100 Retailer list.

As the table below shows, 62% have a commerce app, but only 25% of these have a native checkout. The other 75% direct customers to a web-based payment system, likely to increase abandonment.

In order to create joyous native app experiences that will convert loyal customers, retailers must understand exactly what information they need from customers and make it easy to input.

The Trainline has recently dropped the need for registration from its app. Retailers should take heed.

native apps with native checkout

native checkout

3. Indexing and deep linking increase 'findability'...

One of the most common arguments against apps was articulated by Tim Berners-Lee at Le Web 2014.

Everyone loses if it’s not on the web. If it’s online everyone can see it and link to it, you are part of the conversation.

However, Google is now indexing app content and showing it in mobile search (whilst also admittedly penalising mobile websites with app download interstitials that cover the homepage).

Deep linking to specific app content has also been possible for a number of years. This allows retailers to direct customers to specific products or content within their app, from an email or a social post.

4. ...and findability is a red herring, anyway

Perhaps the number one gripe with apps over the years has been the difficulty in increasing numbers of downloads and reducing churn.

Dennis Jones, CEO of Judo Payments, makes clear that heavily marketing an app will inevitably lead to churn.

A retail app cannot be seen as 'a simple extension of ecommerce', with the same incentive to widen the funnel as much as possible.

Native apps should be considered a separate proposition for your most loyal customers.

20% of your retail customers will drive 60-80% of business. Either directly or through referrals.

5. Native apps convert

Research by Kony has shown that for iOS, conversion rate in native apps is 30% higher than web apps.

6. Consumers want consistent retail experiences

Amazon has succeeded by creating a trusted service, with reliable pricing and delivery. It's this same dynamic that will pull your loyal customers to a native app.

Customers don't always want choice, something that Google (even when searching for a specific retailer) pretty much guarantees as part of its revenue model.

Though Google Shopping is shortening the web funnel by adding 'Buy' buttons to ads, as well as improving page speed, consumers often want to find a trusted retailer as quickly as possible (and may even be wary of Google's suggested products).

It's a simple point I'm struggling to make clearly, as the mobile web becomes busier and more sophisticated, native apps still offer a way to cut through the noise. 

7. Success stories are convincing

Here are nine excellent retail apps, as reviewed by David Moth. Success stories, as opposed to poorly implemented solutions, are a simple and convincing argument for retail apps, with the slickest examples being native.

8. A great native app still offers competitive advantage

The same Judo Payments study I referenced earlier highlights some of the top retailers without a commerce app.

Debenhams, PC World, Currys, IKEA, Carphone Warehouse, Matalan, Clarks, Waitrose, TK Maxx, Urban Outfitters, Superdrug, Monsoon and Ann Summers are named.

What this shows is that however quickly the mobile space is moving, there's still room to delight your loyal customers where your competitors are failing to do so.

Moving now may represent the last chance to get a competitive advantage through a native app.

9. App usage is simply too big to be ignored 

Consumers are using apps more than ever, with some 2015 studies pointing to 85% or more of smartphone usage as in-app. Smartphone usage is increasing, too, of course.

The caveat that app 'haterz' add here is that the majority of that usage is consigned to a small number of apps; 80% of time is devoted to just five apps according to Forrester.

These are not the same five apps for every user, though. The chart below shows usage split by category, with a chunky 5% of time spent shopping.

Like it or not, users choose to shop in-app when the experience is good. If retailers are truly dedicated to customer experience, a beautiful native app makes sense.

time in app spent shopping

10. Retailers are dangerously bound to legacy infrastructure and teams

It's the speed of mobile growth that dictates the need for retailers to innovate and experiment. Doggedly sticking to team structures designed for traditional ecommerce has inevitably led to divided loyalties between native app and web.

Early investors in native apps have proven how successful the channel can be, particularly for obviously mobile propositions (e.g. Domino's Pizza).

Without continued investment in apps as a separate sales channel, retailers are more likely to fail their customers. As innovation on mobile continues and user habits continue to evolve, retailers restructuring for mobile conversion will be best-placed to succeed. 

For an alternative view on native apps, see Patricio Robles' posts:

Ben Davis

Published 4 November, 2015 by Ben Davis @ Econsultancy

Ben Davis is Deputy Editor at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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Comments (1)

Jeff Rajeck

Jeff Rajeck, Research Analyst at EconsultancySmall Business

Great post. Here are two more examples of retail apps worth talking about:

Sephora - millions of downloads, offers lots of features unavailable elsewhere. Designed in a CX lab in San Fran.

Target - experimenting with near-range iBeacon alerts through their native app in 50 US stores at the moment.

Read more at my recent multichannel post...

https://econsultancy.com/blog/67114-the-future-of-multichannel-marketing-in-apac/

almost 2 years ago

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