The impact and challenges of shopping apps

In today's rapidly evolving retail landscape, shopping apps have emerged as powerful tools that redefine how consumers interact with brands and make purchases. We explore the usage of shopping apps, the benefits they offer to both consumers and retailers, and strategies for retailers to effectively engage their customers through these digital platforms.

The software company ironSource has analysed the use of shopping apps in a survey of 4,771 US-Americans. Here are some of the results:

• ½ of respondents have 2-4 shopping apps on their phone
• 29% of respondents have 5-9 shopping apps on their phone
• 95% of respondents actively use a shopping app at least once a month
• ¾ of respondents use two or more shopping apps at least once a month
• ½ of respondents are likely to download a new shopping app if it offers special promotions
• 44% of respondents would like their favourite app to notify them about offers and promotions

Shopping apps are very popular and are used by users of all generations. And retailer apps can score points with discounts or special offers.

ironSource also asked users how they decide which retailer apps they use.

• ⅓ of respondents have deleted a shopping app in the past year to free up space on their phone
• 42% of Gen Z respondents would delete an app to free up space on their phone
• 27% of respondents have deleted a shopping app in the past year that they only downloaded for a specific purchase
• ½ of respondents would shop on one shopping app over the other because of cheaper product prices
• 39% of respondents would shop on one shopping app over the other because of a more convenient user experience

Competition between shopping apps is fierce. If the user experience is poor, internet-savvy users will quickly switch to an alternative. The number of apps on a smartphone is a threshold that retailers need to overcome. Just because a customer buys from a retailer once, the app does not remain on the mobile phone or in use permanently.

Shopping apps can have a number of advantages compared to webshops or other e-commerce channels.

Consumers appreciate the faster experience an app can provide, since apps often operate faster than even mobile-optimized websites. This speed can lead to lower bounce rates, fewer abandoned carts, and higher conversion rates.

Shopping apps also offer a very direct way to engage with customers using push notifications. These mobile-specific messages allow you to re-engage buyers by reviewing or recommending products. Discounts or location-specific offers can increase the likelihood that consumers will keep your app on their phone and actively use it.

Mobile shopping apps can help retailers and brands deliver a more personalized shopping experience. Using the customer accounts as well as their purchase and search history, companies have more opportunities to provide personalized product recommendations. This pushes engagement, successful cross-selling and upselling as well as conversion rates.

The more benefits and value users derive from a mobile application, the more likely they are to use it regularly.

With the further development of artificial intelligence, customised suggestions are getting better and better. AI can draw on a wide range of data, including order and viewing history, general behaviour patterns, cross-selling data, current trends and much more. This makes product recommendations more accurate and successful.

The search functionality is also improving with suggestions and an understanding of complex consumer queries. A search that a consumer can operate using images or speech makes a mobile application particularly attractive. The same is true for a chatbot or a digital assistant that helps with enquiries in the form of a natural dialogue.

Another powerful feature is an enhanced user interface that adapts and responds to the user's habits and needs.

Even if you invest time and money in developing an excellent shopping app, it is difficult to get your customers to keep your app not only on their smartphone but also in regular use.

A study that looked at the connection between holiday shopping events such as Black Friday and the use of shopping apps found that consumers downloaded the apps much more before and during Black Friday. However, they also deleted them again quickly after the promotions ended. One month later, only 20% of these users still had the app on their mobile phone.

According to a 2023 survey by Airship, retailers need to showcase their app’s relevance very quickly: 57% of consumers only use an app once or twice before deciding whether to delete it.

Smaller retailers and lesser-known companies face even greater challenges than large retailers with extensive store networks when trying to get their apps onto consumers' mobile phones. It's important to remember that developing a fully functional app is costly, and typically, separate versions are needed for both Android and iOS.

Nevertheless, the topic of mobile commerce still has great growth potential. Smartphones have become an integral part of most people's customer journey, which is why retailers and brands should position themselves well on mobile. Whether it's their own app, a presence in third-party apps, a perfectly mobile-optimised website, a progressive web app or an extensive social media presence, every company has to find the best way for itself.

Sources: Blog ironSource, News PRO CARRIER, News Digital Commerce 360