How Retailers are Using Mobile Apps: the Good, the Bad, and the OpportunityNov 8, 2017 - by Kristine Lowery
There’s no doubt that mobile shoppers are increasingly important to retailers. Mobile commerce will grow 58 percent this holiday season compared to last year, according to a recent prediction from eMarketer. The eMarketer team also forecasts that more than 16 percent of this year’s increase in overall holiday ecommerce sales will be driven by growth in mobile shopping.
Yet when we analyzed the mobile and personalization strategies of 100 well-known retailers for our recently-launched Retail Personalization Index, we were surprised to see that even some of the largest retailers continue to struggle with their mobile strategies. A few are using mobile technologies to make it easier for customers to shop wherever and however they like, and some brick-and-mortar stores are successfully using mobile to improve their in-store experiences. But others have apps so plagued with ads that they’d be better off using no app at all, while a third group has gone exactly that route — no app at all.
Here’s how we see the good, the bad, and the opportunity for retailers.
- Apps that function as online stores
The majority of the brands in our study are using apps to replicate their online stores. This is a good start, although it doesn’t really take advantage of mobile’s ability to help retailers connect with customers in a more relevant way. But it does make it easier for customers to shop no matter where they are. It also gives them another way to check in on their orders and to find stores’ physical locations.
Almost all of the apps in our research used a single digital profile to connect app activity with onsite activity. They shared customer preferences and shopping carts across both platforms.
- Apps that enhance the in-store experience
In a very few cases, retailers were using apps to improve a shopper’s experience in a physical store. Mostly, this came in the form of brands such as Walmart, Target, and Nordstrom using apps in conjunction with beacons. Those retailers can send customers push notifications with a personalized message or offer while they’re shopping in a physical store.
Home Depot uses its app to make it easier to find things in its stores. A customer can place items in their online shopping cart, and when they visit a store and open the app, the app will tell them where those items are located.
We found some smaller brands doing creative things, too. When a particularly valuable customer of Frank & Oak walks into one of its physical stores, the Frank & Oak app will alert the sales associate to offer that customer a fresh cup of coffee.
- Apps with non-transactional content or features
Some apps gave users a good reason to log in even when they weren’t immediately interested in buying anything. We found this was most common among fitness apps, from companies such as Nike, Reebok, and Adidas. The apps offered features such as fitness tracking and performance monitoring.
Sephora does this as well. Sure, customers can use the app to buy cosmetics. But they can also use it to manage the loyalty program and to learn about new content and community happenings produced by Sephora. If there’s a Sephora event near a shopper, or in an area the shopper frequents, Sephora will send a message to them through the app.
- Apps with intrusive advertising
This was as surprising as it was unpleasant. Retail brands should not be trying to monetize their mobile apps through advertising. Instead, they should be using mobile apps to better allow customers to engage with them wherever and whenever they want.
Yet about one in 10 brands littered their apps with pop-ups and interstitials that created a lousy user experience. In many cases, these ads were displayed multiple times per minute and repeatedly interrupted the sign-in process. The ads seemed to have been turned over to a third party to manage, without anyone from the brand paying much attention. The result: We often saw in-app ads for competing retailers.
- Other common mobile mishaps…of which there were many
Apps that were poorly designed, resulting in a poor user experience, and apps that seem to exist in a vacuum, without a messaging strategy. An app without a messaging strategy is just begging to be ignored. The most effective apps work in combination with a personalized messaging strategy that reminds customers when, where, and how they can be used.
- Build an app!
Much to our surprise, almost a quarter of the brands in the Retail Personalization Index don’t have an app. Sometimes a brand chose to invest heavily in the mobile web instead. Other online-only brands were still new, and may not have built an app just yet. The largest brick-and-mortar brands, however, invested in apps years ago, and many are currently working on their second or third iteration of their apps.
In many cases, brands without apps tended to use wholesalers as their primary distribution channels.
- Integrate communications across channels
Building an app is a great start. But retailers won’t get the most out of those apps until they link their mobile data with what they already know about their customers on other platforms. In many cases, customers shop on mobile but buy on desktop, so it’s important to make sure customer profiles, shopping carts, and preferences stay consistent across platforms. It’s equally crucial for messaging strategies to incorporate individual customer preferences, so that individual messages can be as relevant and timely as possible.
The Retail Personalization Index shows that many retailers – even some of most successful, seemingly digitally savvy ones – are still struggling with their mobile strategies. That’s both a warning sign and an opportunity for brands that understand the mobile shopper and her importance to commerce.
Ready to get a leg up on the competition with your mobile experience, or take steps to further the experience and connect the cross-channel experience? Contact Sailthru to learn how our solutions can help.