Creating a Successful App Commerce Channel Requires a Solid Customer Acquisition Strategy

The growth of mobile commerce is due in large part to changing consumer shopping habits. The demand for an easy and seamless 24/7 shopping experience on the devices that never leave our side is growing. This constant access to smartphones translates into an increasing amount of time spent on devices — and mobile apps. In fact, research from Flurry finds 92 percent of time spent on mobile phones is in apps. Retailers are paying attention to these mobile trends, and the growing affinity for mobile apps in general. App analytics platform Apptopia estimates that worldwide, shopping app downloads grew to 5.7 billion in 2018, up 9.3 percent over 2017.

Findings from our own platform confirms that mobile apps are growing five times faster than the industry average. Moreover, retail revenue per user on app is 2.5 times greater than mobile web, and 1.4 times more than desktop. And brands are paying attention.

Shopping apps are now an important part of the customer journey. Whether you outsource app development or build it in-house, doing it right should take precedence. What happens once a retailer has the perfect shopping app? As great as “build it and they will come” sounds, that isn’t always how it works. Driving app growth doesn’t happen overnight. A thriving app commerce channel requires the right strategy to drive users into downloading the app and engaging them on a one-to-one basis, driving loyalty and continual app usage.

Let’s examine the three most important steps of mobile growth that occur on the path towards driving powerful app return on investment:

1. Let’s build a shopping app!

So, what prompts a brand or retailer to identify the need to incorporate app commerce into their retail strategy? The organic growth of mobile web traffic, the desire to nurture consumer engagement and brand affinity, consumer demand for apps, and the need to maintain a competitive edge are primary reasons. Brands have a variety of motivations to introduce a shopping app to their repertoire of shopping channels.

During this step, key stakeholders start to understand the importance of optimizing, refining and enhancing their mobile channels. It’s extremely important for company executives to thoroughly research their approach before diving into the development process.

The right partner will collaborate with the company to meet its customers’ needs and provide the best branded user experience throughout the shopping journey. This stage is critical for setting the foundation for mobile app success and growth.

2. Building your mobile app customer base.

A retailer’s priorities now shift towards customer acquisition. Customers usually spend three times more within an app than their mobile web counterparts. Therefore, it’s important to grow an app user base to maximize ROI. However, customer acquisition can require some investment. According to data from mobile app marketing company Liftoff, it costs about $4.12 to get a user to install an app

Don’t let this deter you. According to data from retailers across our platform, introducing an app delivers 15 percent additional revenue in the first year alone, and will generate 3.5 times more revenue per user than mobile websites. All in all, mobile apps will account for approximately 24 percent of all mobile revenue in the first year of launch.

It’s important that brands establish a cohesive, frictionless journey between all e-commerce channels, including their app. Those that don’t may see limited ROI from their initial customer acquisition phase. Without this unified journey it’s hard to unlock potential in-app revenue.

• How your company can avoid making this mistake: Let’s imagine a retailer realizes its mobile website sees a high volume of organic traffic, but visitors aren't converting. Also, the retailer knows this traffic has a higher chance of converting to purchase in-app. As a result, it places an app download button on its mobile website. When a user clicks this button, they're directed to an app store where they have to search for the app in order to install it. The extra step of having to search for the app causes frustration. It translates into a broken user experience and is a key reason that visitors bounce — perhaps to one of your competitors — instead of making a purchase.

• Here’s how the customer experience in this scenario can be improved: By using personalized, floating mobile web banners, visitors are prompted to install the retailer’s app by seamlessly routing them to the right place in the App Store or in Google Play. Once downloaded, visitors are delivered in-app, directly to the product they were previously viewing on the mobile web. Without this smooth experience, it’s more difficult to acquire customers that will come back to purchase again and again. Brands that don’t utilize their resources to solve customer problems like this may blame the app for underperforming. This would be a big mistake. Retailers may lose potential customers on the journey to downloading the app and, in turn, consumers are missing out on the superior shopping experience they're looking for.

3. Reaping the rewards.

Once a brand has successfully linked all of its channels, including email, social, paid ads and mobile web, it's on the right path to driving users to the app and reaping the rewards. At this stage, the investment and hard work of building a native app can turn into explosive growth. In fact, for many companies, stage three is when mobile revenue can double, triple, and even quadruple. In addition, companies can also focus on re-engaging the users they’ve acquired on different platforms to drive more conversions.

One thing is certain: customers are largely responsible for transforming online retail. They demand a fast, simple and flawless way to search and buy the products they want, which is more than likely on the device they carry night and day. For a successful mobile commerce strategy, brands must deliver a customer-centric shopping experience that encourages repeat purchases and customer loyalty. Mobile app commerce has proven to be the best way to accomplish strong customer lifetime value and meet mobile growth goals.

Mike Hann is president and co-founder of Poq, the app commerce company.