Why do consumers like retail apps?

Discussion
Sep 02, 2016
Al McClain

A new report from research group Arc by Applause finds a variety of reasons why consumers prefer one app versus another.

In its analysis of 1.2 million consumer reviews of apps from the top 50 global retailers with the most sales from mobile apps, the top-ten scoring retail apps were:

  1. Groupon
  2. One Kings Lane
  3. ModCloth
  4. REI
  5. Rue La La
  6. Gilt
  7. JackThreads
  8. Zara
  9. JD (Germany)
  10. Overstock.com

Groupon’s app success was attributed to giving customers control over their mobile device experience to discover food, fun, fashion, wellness and professional services.

Rue La La and Gilt ranked high because of their flash sales, daily inventory updates and mobile-exclusive offers. Overstock.com earned kudos for enabling customers to create lists, see flash deals and join its rewards program. REI enables customers to find the closest store, check product stock, scan to add items to a wish list and for its customer reviews.

While many retailers on the list saw big positive sentiment swings — including American Eagle Outfitters, Etsy, Staples, GNC and Abercrombie & Fitch — Peapod was among those seeing notable negative swings. Peapod’s underwhelming score was traced to freezes, slow performance, error messages, intrusive ads, and temperamental updates.

The big potential around apps continues to be mobile sales, and it’s happening. According to the Internet Retailer 2016 Mobile 500, mobile sales from apps have grown to nearly $60 billion in 2015, a nearly 70 percent increase from the year before

Yet consumers download apps, according to a May survey sponsored by Branding Brand, largely to save money.

The number one reason to download a retail app was to gain loyalty/rewards points for downloading, 71 percent; followed by receiving app-only coupons/discounts, 67 percent; and to receive a discount on first order, 64 percent. Less miserly, 59 percent said they downloaded a retail app because they frequently purchase from the retailer.

While Arc by Applause’s list of the top 50 global retailers with the most sales from mobile apps included Apple, Gap, Staples and Toys “R” Us, many mega-giants, such as Walmart, Target and Amazon, failed to make the cut.

Discussion question: Why do retail apps seem to be highly relevant to the shopping experience at some retailers and irrelevant at others? What key features should all retail apps have at this point?

Braintrust
"I don't know if any of us will live long enough to see a Harry Winston frequent shopper app that notifies us about a flash sale on diamonds."
"One of the reasons the mega-giants didn't make the list in tracking sales from their apps is that they are not capturing one vital piece of data..."
"The similarity between these online retail successes isn’t just their demographic, but that their apps offer the ability to comparison shop."

Join the Discussion!

15 Comments on "Why do consumers like retail apps?"

Notify of

Sort by:   newest | oldest | most voted
Lyle Bunn (Ph.D. Hon)
BrainTrust

As the mobile app sits between the online website and the physical store, its role is the same — traffic and conversion. The tactics of loyalty offers, on-app specials and discounts have found a new voice in apps, which offer an additional touchpoint with the consumer.

Apps add shopping minutes to the retailer’s benefit as prospects and customers browse while in transit, relaxing and watching TV making the “phablet” (mobile phone or tablet) the new store access point.

Max Goldberg
BrainTrust

Unless there is significant savings to consumers they will not download retail apps. And once downloaded, if the savings don’t continue, they won’t use the app. Regardless of the results of this study, most consumers consistently use only a handful of apps and none of them, with the possible exceptions of Amazon and Starbucks, are retailers’ apps. Retailers’ apps need to deliver coupons, discounts, loyalty programs and the ability to checkout on their apps. Few, if any, do this and that’s why retailers’ apps are largely ignored.

Kim Garretson
BrainTrust
One of the reasons why the mega-giants like Walmart and Target did not make the list in tracking sales from their apps is that they are not capturing one vital piece of data: an in-store visit to examine an item. Seventy percent of buyers of considered purchase items like an appliance or TV research their options before going into a store. Why? They want to see the product first. A large percentage of these buyers then return home and make the purchase on desktop. If they open the retailer’s app while standing in front of the product to review the… Read more »
Ryan Mathews
BrainTrust
Some retailers draw more discount-oriented shoppers than others. I don’t know if any of us will live long enough to see a Harry Winston frequent shopper app that notifies us about a flash sale on diamonds ten carats and above. There may or may not also be a correlation to age cohorts. It seems logical to assume retailers catering to Millennials and Generation Zers will have more success getting their customers to leverage technology. The most critical factors — as illustrated by the Peapod example cited in the article — are easy navigation and seamless function. If that app is… Read more »
Lee Kent
BrainTrust
It’s all about what’s in it for the customer. People are very likely to download an app for the initial points or discounts. Look at all the loyalty programs folks join and may never use again. If retailers want their apps to stick, they need to serve the customer. Much like the Starbucks app and now the Chick-fil-a app that let the customer go to the head of the line. Otherwise the app is nothing more than a loyalty card and instead of having distinct apps that take up prime real estate on my phone, I’d rather be able to… Read more »
Adrian Weidmann
BrainTrust

There is overwhelming evidence that the large majority of retailer apps simply don’t resonate on a sustainable basis with shoppers. A recent study shows that while a typical digitally empowered shopper uses six to 10 apps per week, two-thirds of newly downloaded apps are discarded after a single day and 97 percent of all apps are abandoned within a month of being downloaded. The ‘apps’ that have life are those that integrate mobile payment and loyalty (e.g., Starbucks) or create a consistent “surprise and delight” shopping experience (e.g., Gilt).

Patricia Vekich Waldron
BrainTrust
Patricia Vekich Waldron
Retail and Marketing Expert; Former IBM Executive
1 year 3 months ago

Unless they are essential in function and efficient to use, consumers will not use apps regularly, and they will become zombies.

Brian Kelly
Guest
1 year 3 months ago

Tech savvy shoppers like apps
Less tech savvy shoppers like apps less

We are living in a time of austerity
Therefore shoppers are especially “miserly”

All shoppers are always looking for the best deal
And the best deal is saving money
All shoppers want to think they are smart
And great providers for their families

So apps have to provide the best deals
That comes from coupons, special savings, brand currency, secret sales

Brand relevance dictates app relevance
REI is preferred to LLBean among tech savvy shoppers
And so on.

*why is Groupon on the list of retailers?

Shep Hyken
BrainTrust
The app is another channel for the consumer to buy. It crosses into the online retail, but really is a channel unto itself. The immediate gratification of loyalty and reward points is a great strategy, but getting the consumer to engage and use the app is another issue. Three parts of the app should be about marketing (as in discounts, sales and anything related to pushing more merchandise), a value-add in the form of information/content and an opportunity to engage with the customer community. There will be a point at which apps become a bigger part of the retail experience… Read more »
Kenneth Leung
BrainTrust

I am surprised Amazon didn’t make the list. What this tells us is that consumers will buy from an app if there is timely discount/deals, basically apps drive immediate action from discount shoppers. The question here is whether an app helps a brick-and-click retailer. I believe the answer is yes, but the volume of traffic for the app is going to be lower than pure-play apps, that’s just how it is. It needs to be good enough to not hurt the brand, but comparing apps from brick-and-clicks to pure-plays is comparing apples and oranges.

Doug Garnett
BrainTrust
I think the data on App sales is far, far too high. Total e-retailer sales in the US for 2015 were only $360B. So for there to be $60B in mobile sales via app stretches the way numbers work. That said, it could be that number counts “Safari” on my iPad as an “app”… in which case it’s misleading. Interesting read. My own behavior with retail apps is I rarely use them. Most don’t offer a shopping advantage — only discounts and sales. But we need to be a bit cautious about this. As Zyman observes, in the absence of… Read more »
Jasmine Glasheen
Staff
Jasmine Glasheen
Contributing Editor
1 year 3 months ago

The similarity between these online retail successes isn’t just their demographic, but that their apps offer the ability to comparison shop. They feature multiple brands and users can search for the best price.

Modcloth offers many of the same brands as Amazon, with a slightly higher price. They do it by allowing users to upload photos of themselves wearing their purchase along with their reviews of the product. This allows potential customers to have a personal(ish) experience with the product and creates an online community. People are willing to pay for that. The “experience” factor doesn’t end with brick and mortar.

Peter Charness
BrainTrust

I’d be interested in a few statistics, like who used the app for the 4th time, and the amount of time they interacted. (As opposed to those apps that mysteriously open all by themselves on your phone). Betting there’s a big drop off after the 2nd use.

Ralph Jacobson
BrainTrust

If there’s no compelling reason to use the app, then it won’t be used long-term by the shopper. Some of the ones listed as well as a couple others have exciting promos to keep the interest generating. You cannot just “set it and forget it” when it comes to apps. If they look just like they did the last time I signed in, then I’ll lose interest. Change them up often!

Ken Morris
BrainTrust
Consumers are continually bombarded with retailers and other companies trying to get them to download their mobile apps. There are only so many pages of screens that consumers want to scan through so they are becoming more selective when deciding what apps to download. Everyone seems to be reaching app fatigue. That said, there is hope, as savvy retailers are figuring out the secret sauce to get consumers to download their apps and use them on a regular basis. Overstock.com has more than 5 million users of their mobile app and Starbucks is driving as much of 20% of their… Read more »
wpDiscuz
Braintrust
"I don't know if any of us will live long enough to see a Harry Winston frequent shopper app that notifies us about a flash sale on diamonds."
"One of the reasons the mega-giants didn't make the list in tracking sales from their apps is that they are not capturing one vital piece of data..."
"The similarity between these online retail successes isn’t just their demographic, but that their apps offer the ability to comparison shop."

Take Our Instant Poll

When will retail apps become an essential part of the shopping experience for most retailers?

View Results

Loading ... Loading ...