Decreasing the cost of acquisition with app commerce

According to Criteo, retailers that invest in both mobile web and shopping apps experience 66% of their mobile sales generated via the app channel. This is hardly surprising due to the intuitive UX that apps provide and a whole bunch of other reasons.

This suggests that when a customer wants to browse or shop a retailer’s products via their mobile device, they’re most likely to go directly to the app. If they don’t have an app, the customer is most likely to use the search bar in their phone’s browser and click through via Google’s results. Data finds that 41% of clicks go to the top three Pay Per Click adverts, costing retailers to land their best customers who were coming anyway.

PPC

Hosting a PPC advert protects retailers’ customers from being poached from a competitor, however, this is only a threat if the retailer puts it’s fate in the hands of Google and expects hardcore loyalty from it’s customers. If the retailer has an app, customers will go directly to the app instead of their browser and subsequently save themselves the cost of the PPC ad click as well as extinguishing the risk that the customer will switch to a competitor advertising on its brand name.

The cost of acquisition as a benefit of app commerce, is usually overlooked as evangelists of the category mainly herald the increase of revenue and conversion against the mobile web.

Affiliate marketing

App commerce’s benefits to acquisition aren’t just about saving costs and lowering risk from competitors but also about driving acquisition itself. For instance, many retailers work with affiliates to drive traffic, much of which is from existing customers. Affiliate marketers usually use the same marketing techniques as retailers (ads, email, social etc.), so when it comes to existing customers, this can be a waste of resource.

When retailers have an app, they can mix up marketing communications to existing customers with app-only functionality such as push notifications to drive customers directly back to them. This is especially exciting with the launch of rich push notifications which Urban Airship found can increase direct open rates by 56%. This avoids the additional costs of the affiliate’s fee and risk of the affiliates profiling their customers and driving them to their competitors.

But overall, once a retailer persuades it’s customers to download its app, they’re bound to increase loyalty and retention. Apps on the Poq platform have maintained a returning user rate of 67%, which is more than 2x that of mobile web and desktop.

Building a business case

Here at Poq, we’ve worked closely with retailers to build business cases that support the investment of an app from acquisition savings along. This is without considering the other benefits provided by apps. If you’d like one of our App Commerce consultants to take a look at how much you could save, just reach out.

Reported by Andy Whyte