The Shift from Mobile Websites to Mobile Apps in Ecommerce

In the past, the focus of “mobile-first” design was on ensuring that websites worked well on smaller screens. Most ecommerce startups successfully optimized their websites for mobile use, as the majority of online shopping traffic now comes from smartphones. As a result, having a clunky mobile site has become a rare occurrence.

However, the real challenge lies in what comes next. While a mobile website is where customers initially land, a shopping app is a choice that customers make to keep on their phones. This decision significantly impacts the economics of the customer relationship. Shopping apps tend to have higher conversion rates and lower cart abandonment rates compared to mobile browsers. Despite this, many emerging brands still view the app as an optional extra or just another sales channel.

Atul Poharkar, CEO of app-building platform AppMaker, works closely with numerous ecommerce brands to address this issue. According to him, “Mobile apps are transitioning from being mere sales channels to becoming centers for enhancing customer experience and retention.”

Forward-thinking brands have already recognized this shift. However, Poharkar observes that many startups are investing in the wrong areas in pursuit of this transformation.

The Rise of Personalization in Ecommerce

One of the notable trends identified by Poharkar is the move towards dynamic storefronts. A significant percentage of new brands approaching AppMaker now seek personalized homepages and product listings that change based on individual customer preferences, browsing history, and past purchases.

This emphasis on personalization is driven by the fact that tailored experiences have become a key growth driver. Research by McKinsey reveals that personalization typically leads to a revenue increase of 10% to 15%, with results varying across sectors. Fast-growing companies derive a substantial portion of their revenue from personalization compared to slower-growing counterparts.

Personalization is effective in engaging customers, but its success hinges on sustained app usage. Leading brands are exploring innovative strategies such as online pet clinics, vaccine trackers, color guides, AI try-ons, and interactive games within their apps to enhance user engagement.

The overarching goal is to provide users with compelling reasons to open the app beyond just shopping.

For instance, Chewy’s “Connect With a Vet” service has facilitated over a million consultations, establishing a strong connection with pet parents. Similarly, Starbucks has leveraged its Rewards program to cultivate customer loyalty and engagement.

While not every startup can replicate Starbucks’ scale, the principle remains universal: an app’s value lies in its utility between purchases.

Navigating the Challenges Post Mobile App Launch

Many brands encounter hurdles after launching their mobile apps. Poharkar highlights a common gap between a brand’s vision for the app and its user adoption strategy.

He emphasizes the need for a comprehensive plan encompassing user acquisition, engagement, retention, and revenue generation post-launch. Without a well-defined strategy, an app risks becoming a forgotten download on users’ devices.

Research by Adjust indicates declining retention rates for ecommerce apps, underscoring the importance of post-install engagement. While feature development is crucial, sustained user engagement is the key to app success.

Poharkar advises against applying traditional web acquisition tactics to mobile apps, as the dynamics differ significantly. Instead, he advocates treating mobile apps as exclusive channels for high-value, loyal customers.

Based on AppMaker’s data, app users represent a small fraction of the customer base but contribute significantly to digital revenue. This underscores the value of nurturing a dedicated customer segment rather than expanding indiscriminately.

Maximizing Mobile Apps During the Holiday Season

As the holiday season approaches, Poharkar recommends launching an app ahead of time to capitalize on seasonal opportunities. Brands can enhance the holiday experience by offering personalized features, exclusive releases, and loyalty rewards through their apps.

Timing is crucial, given the increasing prominence of mobile shopping during the holidays. Adobe’s data underscores the growing significance of mobile sales during the festive period.

Poharkar emphasizes the long-term benefits of leveraging the holiday season to transition one-time buyers into loyal app users. By fostering direct relationships with customers, brands can secure repeat purchases and enhance customer retention rates.

While building an app internally entails substantial investment, startups can consider the trade-offs and focus on core product development to drive app success.

Ultimately, the key to mobile app success lies in cultivating relationships with a core group of loyal customers and providing compelling reasons for their continued engagement.

By prioritizing user retention and engagement, startups can harness the full potential of mobile apps as valuable assets in their ecommerce strategy.

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