We hear it all the time; e-commerce is growing faster than we would ever have imagined.
Unsurprisingly, many believe that the future of retail, and more specifically e-commerce, lies within mobile apps. More and more purchases every year are made on mobile, and more specifically, within retail and e-commerce applications.
However, it turns out that users are just as fickle about their in-app experience as they are about their brick and mortar experiences. With 80 percent of time spent in just five apps, retailers need to spend time to win over their customers in their app experiences.
Despite rampant e-commerce growth, our new research shows that for those looking to drive sales through apps, the space continues to be a unique challenge, and one that requires significant (and strategic) investments and tactics in order to tap into that growth.
Notably, our data highlights that “retention” of users – keeping them coming back – for e-commerce and retails apps is lower than many industry averages. Additionally, “churn” – when users stop using the app all together – is remarkably high from the first month onward.
What this information shows us is that the clichéd fickleness that many shoppers show in brick-and-mortar stores is also present in their interactions on mobile apps. This is an entirely different kind of window shopping, but it’s also one that can be combated.
In the US, over two thirds of retail app users have stopped using the app in the first 30 days after download, increasing to eighty-one percent by the third month of an app's use.
The story is even more pressing on a global scale with 76 percent of app users churning in the first 30 days and a startlingly 88 percent gone three months in.
However, the statistics aren’t the same across the board.
Among the top performing e-commerce and retail apps the narrative is brighter. For the top class of apps, the split between returned users and churned user is 50/50 - a vast improvement over the average 75/25 split.
As we mentioned before, recent research from Forrester shows that users spend 80 percent of their time in just five apps. So, what differentiates these types of successful apps from other retailers?
This data might initially lead you to believe that apps aren’t worth the time or energy given customers’ propensity to stop using them. However, quite the opposite is true. More than ever apps are worth investing in, as the right strategies and tactics can harness the growing popularity of e-commerce, and turn a fickle, casual user into a long-time valuable customer.
For example, low retention and high churn rates in retail apps can be dramatically improved through using data to track usage throughout the entire customer journey from acquisition and engagement to retention. Usage insights, loyalty metrics, and revenue metrics all provide the foundation to create app marketing that is not only useful to your user but also highly relevant, personalized and targeted.
Marketing tactics like in-app messaging and push messaging, built upon a foundation of accurate data, can markedly improve these statistics. Finally, predictive app marketing, where you use all of the data you have about your customers to predict customer behavior and proactively engage them with personalized experiences, can help you to prevent users from leaving even before they do.
These tactics are no more necessary than for retail and e-commerce applications where users are more fickle than ever. With the right tools and strategies, you might just get them to pull the trigger on that new pair of shoes.
Localytics is the leading app lifecycle engagement platform for mobile and web apps across more than 2.7 billion devices and 37,000 apps. Localytics processes 120 billion data points monthly. For this study, Localytics examined the average monthly user retention and churn of retail and eCommerce apps and compared it to a subset of brand leaders (i.e. “The Best Apps”) in the vertical. Retention is defined as the percent of new users who open the app one month after download. Users who were not retained in the following months were defined as churned. “The Best App” were selected from the top 10% in terms of size, as measured by monthly app users (MAUs).
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