Retail Revenue: Why Apps Make Cents


To app or not to app? That is the question many online retailers are asking themselves in 2018. While it may seem like only behemoth retailers like Amazon, Walmart, Target and the like are exploiting the enormous potential of apps, many innovative small to mid-size retailers are already in the game.

It wasn’t that long ago that metrics around shopping apps weren’t all that impressive. However, the tide has turned and the payoff is compelling. Globally, year-over-year growth of in-app revenue as a percentage of all online sales jumped 48% (from 31% in Q4 2016 to 46% in Q4 2017).

I have researched and compiled five additional benefits to consider, if an app is on your radar:

#1:  Higher Conversions = Higher Revenue

While most retailers have a mobile site, the reality is that mobile apps convert significantly better than mobile sites. How much better?

According to a recent report by Criteo, North American retailers (with a mobile site and an app) saw their apps convert at a whopping 21% in Q4 2017. This number is 3X-5X higher than the average mobile website conversion rate.  Even more impressive is the fact that native retail app generated 66% of all mobile commerce revenue – twice as much revenue as mobile websites. Apps even outperformed desktop eCommerce sites—accounting for 44% of all online sales in Q4 2017, versus just 33% for desktop.

#2: Deeper Engagement With Your Best Customers

OK, so apps convert better….but who will download your app? Remember, apps are not for ALL your customers, they are for your BEST customers. Statistically-speaking 8% of your customers generate 40%+ of your sales. These are the customers that are most likely to download your app.

Apps also offer a unique opportunity to engage on-the-go, allowing retailers to interact and ‘touch’ customers proactively including:

  • Push notifications:  Specific calls to action can be delivered to those most likely to be interested and act upon the offer presented.
  • In-store engagement and/or location awareness: Everything from barcode-scanning functionality, location based targeting, to buy online and pick-up in-store.
  • Loyalty programs: Go beyond the traditional concept of loyalty programs. Some retailers are adding ‘extra’ rewards for app users. Treating your app-download customer base as a special subset of your customer base can generate big rewards.  

#3: Personalization

As consumers come to expect an experience tailored to them, across all touch-points, apps provide a unique opportunity to not only track the buyer’s journey, but enhance that journey by providing an integrated and personalized experience. While this can take many shapes, there is one feature that is getting a lot of buzz these days, and for good reason:

  • Augmented reality (AR):  Fast-becoming the new ‘must-have’ feature for top apps, companies like Sephora, Ikea, and Lowes are using apps to tap into on-board cameras to power experiences that allow consumers to marry products with their lives, prior to purchase. This personalized, contextual selling is a powerful new app-specific tool that is on-track to be a game-changer. Research from Digital Bridge shows that 69% of consumers expect retailers to launch AR apps within the next six months. Data from Google show that 34% of users say they would use AR while shopping, and 61% say they would prefer to shop stores that offer AR.

#4: Speed Drives the Frictionless Experience

According to a Google study, when mobile page loads get to 10 seconds, the probability of a bounce increases 123%. The same study showed that the average mobile site loads in 9.6 seconds. In comparison, over 50% of current native iOS apps load in less than 5 seconds.

As desktop websites become more and more clogged with features, responsive design mobile sites are slipping farther and farther behind regarding performance. Even the best responsive web design sites cannot hold a candle to app speed and convenience.  Also, app checkout can be powered by Apple Pay and Android Pay. The result? Checkout speed is lightening fast, and there are far fewer barriers to buying. Just swipe and buy!

#5: Your Customers Are Likely Expecting An App

No matter who your ideal customer is, it’s likely they would welcome your app. One might think keeping up with technology advances is more interesting to the younger consumer. But, in a recent study by DigitalBridge older shoppers – those aged 35-44 – were most disappointed by the lack of technology in retail with nearly half (48%) saying the current offerings are underwhelming. They are joined by the younger generations as well with 43% of 25-34 year olds and 35% of 18-24 year olds of the opinion that the technology being used today in retail could be better.

One of the best aspects of mobile apps is they are inherently geared toward the mobile audience, by design. Custom UI and retailer-specific features can all be built with a mobile first mindset, to meet specific needs. Because apps are purpose-built from whole cloth, the sky is the limit, regarding UI and functionality.


Retailers who want an omnichannel advantage over their competition should be looking at apps. The metrics are conclusive and the conversion rate lift increase alone should mean app development is an imperative initiative in 2018.

Annie Dossey from ClearBridge sums the trend up well. “Branching out into the mobile app market is a win-win for retailers. Mobile apps provide retail brands a creative opportunity to give consumers the immediate, personalized shopping experience they prefer. At the same time, retailers can leverage mobile features and in-app analytics to attract, retain, and intuitively understand the purchasing behavior of their customers.”  

To thrive in an ever-increasingly mobile world, market leading, smart retailers will be evolving and offering a deeper, more-personalized online shopping experience. Apps make this possible in immersive and custom ways responsive mobile sites simply cannot.  

Native apps should be designed to support your brand, built well and fully integrated with eCommerce, to leverage and extend current operations. But they should also provide compelling app-specific native utility and specific benefit to your best customers.  Although they have to be marketed to drive discovery and download, the ROI is typically faster than you might think, given the metrics. Apps can also be built rapidly, especially if a solution provider is used that is pre-integrated with popular ecommerce platforms and can deliver iOS and Android apps in the context of a single project.

In my opinion, the trend is now inescapable and the question is not ‘whether’ to get on board, it’s ‘when’ can you make it happen.

Have more questions about developing a native app for your business? CLICK HERE

-Wilson Kerr

Hello and Happy Spring from Boston! If you are an online retailer considering a native app, you are not alone. In my latest blog post, I have researched and presented 5 key benefits to consider. I hope helpful….