This sponsored post is part of our Mobile Commerce Explosion series. Produced in partnership with Braintree, the series looks at the explosive growth in mobile and how it’s disrupting industries and impacting brands. See the whole series here.
It’s been declared “The Year of Mobile” for so many years that we’ve forgotten what it means, but it’s time to call it. The industry has revolutionized and the dust has cleared. Mobile commerce sales have tripled since 2012. That’s 30 percent of all ecommerce sales, and it’s expected to rise to 43 percent of all ecommerce sales by 2019 — which means a brave new world for retailers.
Companies need to figure out how best to meet the needs of customers who want the ease of buying goods and services on their phones — and that means deciding whether to throw your spend behind optimizing your mobile website or investing budget in creating a branded mobile app.
The early view: Betting on the app
As far back as 2010, Wired declared apps the answer and the web dead, pointing to the rise of service-based applications for social platforms, and entertainment brands like Pandora and Netflix stealing market share.
In 2014, The Wall Street Journal took up the chant, declaring that the web was finally, really, actually just about dead now. Companies were urged to leap into the walled-garden model of customer interaction, because the mobile web was slow, too vast for attention-challenged consumers, and going to be obsolete any second now.
The argument was that not only are apps faster and easier for users, but they keep customers loyal to your brand. When a customer has an app for a specific category, it was argued they were more likely to stick with it rather than download and use others.
Studies make a case for the ubiquity of apps in the hearts of consumers. 62 percent of digital media time is spent on mobile — and apps account for 54 percent of that time. Shopping app usage continues to grow more than any other app category — by 81 percent last year, in fact.
However, this early view of apps as a panacea for mobile engagement evolved as the mobile market ecosystem matured.
The updated view: Long live the mobile web
Recent research shows that apps aren’t hogging the spotlight quite as much as their evangelists would have liked you to believe. When you dig deeper into stats about app usage on phones, it turns out that 8 out of every 10 minutes a user spends in apps on their mobile device is dedicated to their three favorite apps. Mobile web is actually driving two times the site traffic of apps, and only 20 to 30 percent of a retailer’s mobile sales come from their app.
The upshot is that both mobile web and apps have their place in the mobile ecosystem, each with their pros and cons.
Branded retail apps: The upside
Once you’ve got an app on a customer’s phone, you’ve got the home screen advantage. Convenience, speed, and stored settings top the benefits that consumers list for apps, followed by incentives/rewards, personalized content, and access to “better deals.”
Customer reach and engagement. Apps improve direct marketing access, which, when used thoughtfully — via notifications for location-based deals, sales, discounts, and coupons — can dramatically increase conversions.
Fast, easy payments. An app is an easy way to integrate payment technology for the one-touch, in-app purchases that mobile-first consumers — especially impulse-buying millennials — are looking for. This functionality gives them the ability to pay instantly without extensive data entry each time.
Loyalty programs. Apps offer the most effective and efficient way to establish and administer a loyalty program, and can offer customers a quick and easy way to view and manage their rewards.
Customer service. Customers want instant service from the companies they spend money with, and an app has the ability to offer them an instant connection in their preferred communication channel immediately from their home screen.
Branded retail apps: The downside
While most companies will find that mobile app users become their most loyal and valued customers, the majority of companies have a difficult time driving users from a mobile web experience to a mobile app. The app stores host more than a million apps, but consumers will only focus on a handful of favorites, and over 70 percent of app usage is through the top 200 apps.
App fatigue is also very real now that the gold rush of app adoption has ended. Comscore’s latest mobile report showed that 65 percent of smartphone users downloaded 0 new apps over an average three-month period.
Retailers should also note that 60 percent of consumers have only two or fewer retailer apps installed and 21 percent have none.
What the mobile web offers
There are a wide variety of reasons to create a slick mobile site, and most of them are driven by discovery.
Influence buying behavior. 60 percent of consumers use the mobile web exclusively to search for information to inform their purchasing decisions.
Improve paid ROI. Organic search is often considered the holy grail, but to optimize your marketing budget, your paid search also needs to deliver real results. If you’re not directing mobile searches to a mobile-optimized site, you’re being overlooked. A mobile-optimized website improves conversions as well as lowers your bounce rate.
Boost local search. Mobile devices drive local searches. 80 percent of “nearby” searches happen on mobile devices, “near me” searches have grown by 33x in the last four years, and 88 percent of mobile users search for local information from their devices. Mobile users actively search for local business information, and search engines focus on ensuring local searches are as relevant as possible.
Do you have to choose?
The debate rages on: mobile web versus mobile app. When you drill down, it comes down to the best way to support casual users, loyal users, and users who haven’t yet found you.
If you’ve determined that your business has a good use case for an app, the question may not be whether you should choose between investing in a mobile app versus supporting your mobile web experience, but how you can use both to maximize ecommerce across the mobile ecosystem.
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