Shoppers may finally be using retail apps

Discussion
Photo: Walgreens
Aug 27, 2018
Matthew Stern

A survey from financial services firm Synchrony indicates that, after years of lukewarm reception from customers, retailer apps may finally be having their day.

Respondents said they regularly use four retail apps per year on their phone, rather than just two as indicated by last year’s survey. Eighty-three percent reported being happy with their retail app experience, and only 21 percent (down from last year’s 35 percent) deleted a retailer app due to a poor experience. Sixty percent use apps to browse products, 50 percent to access coupons and 49 percent to make purchases.

Whether customers will download and use apps from individual retailers has become a perennial question as mobile has grown as both a shopping channel and an auxiliary part of the in-store experience. General lists of top downloaded apps year after year have highlighted entertainment and social media apps like Facebook, WhatsApp and YouTube rather than retailer apps.

However, drilling down into recent numbers for the most frequently-used shopping apps reveals quite significant usage. A Statista report on the most popular mobile shopping apps used in May 2018 shows Amazon, predictably, at the top with 135.7 million users accessing the app that month. Walmart comes in second with 76.1 million. Mixed in among third-party deals apps, however, are individual retailers with monthly app engagements in the tens of millions, like Target (41.4 million), Home Depot (28.2 million), Best Buy (21.5 million), Kohl’s (21.0million) and Walgreens (20.5 million).

One explanation for such a trend could be the improved quality of retail apps from tech-savvy retailers, and improved tie-ins between mobile apps and in-store experience.

Walgreens, for instance, has implemented features aimed at both addressing lifestyle needs of their pharmacy customers and improving checkout convenience. Beyond the chain’s popular Refill By Scan option for prescriptions, the app recently added a Pill Reminder function, secure auto-login, simplified menus and rewards based on healthy behaviors tracked in the app.

This has made the Walgreens app popular with the over-55 demographic, a group making up only nine percent of the population that uses shopping apps weekly.

DISCUSSION QUESTIONS: To what do you attribute the apparent increase in customers downloading and using retailer apps? What will savvy retailers add to their apps in the coming year to drive higher usage?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Now that they are starting to offer things that are actually useful/valuable to consumers, funny thing -- consumers are starting to use them!"
"Retail apps are easier to use and offer more value to customers than before. Naturally, more people are using them."
"I would only add that as Gen Z begins entry into their careers next year after college graduation, we would expect higher app use. "

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25 Comments on "Shoppers may finally be using retail apps"


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Keith Anderson
BrainTrust

I attribute the trend to a few key drivers: divergence between the mobile web vs. native app experience; better app discovery platforms and simpler triggers for download; and steady investment in better functionality.

Nikki Baird
BrainTrust

Can I say “I told you so”? I feel like I’ve been saying for years that the only reason consumers are not using retailer apps is because retailer apps had nothing of value to offer (except possibly in the eyes of the retailer only).

Now that they are starting to offer things that are actually useful/valuable to consumers, funny thing — consumers are starting to use them! Mobile wallets, coupons/offers, payment, special capabilities that are only available in stores – these will all continue to drive consumer adoption of apps.

The only question now is if progressive web apps will make apps obsolete — but I think that remains to be seen.

Art Suriano
BrainTrust
There is no doubt that as technology improves more people begin using it. The blend of technology with the in-store shopping experience is getting better, but retailers have a long way to go. I don’t see customers insisting that everything be available on their phones by choice as much as I see many of them using their phones because they get frustrated with the lack of in-store service. Sure, I can use a store app to navigate through a store to find an item but what if I still need assistance? The app is not going to help me the same way a trained store associate could. Too many retailers are looking at technology as the next best way to save even more money on payroll, and I see that as a big mistake. We all use self-checkouts: why? Is it because we prefer them or the lines at the registers are too long and move too slowly? Moreover, how many times when using self-checkouts does a customer have an issue that requires the assistance… Read more »
Dick Seesel
BrainTrust

This is a “chicken or the egg” question: Did consumer migration to retail apps happen because of improved functionality, or did retailers put resources behind m-commerce as a response to customer preferences? The answer is probably both, especially as retailers’ site design for mobile commerce has evolved. It’s not nearly enough to drive mobile commerce from a shrunken version of an e-commerce app, and the retailers with the most robust mobile traffic have figured this out.

Bob Amster
BrainTrust

I think the increase in the downloading and use of retailer apps is divided among socio-economic groups (the wealthier using fewer) and among generational groups (the older using fewer). One of the very few apps I use to purchase anything is not from a traditional retailer: it’s for the commuter railroad in my area, to buy tickets and look up schedules. Another is OpenTable. That’s it.

Richard J. George, Ph.D.
BrainTrust

Technology has made it easier than ever for shoppers to consume information, find products or services and easily share their experiences. This has resulted in new customer expectations that have created a new retail world. In the grocery world, these apps need to conveniently (quickly and easily) communicate pricing, nutritional information, matching of consumer’s dietary information, coupons, etc. as these needs are reflected on their shopping list. Kroger recently launched such an app, called Kroger Edge, in 200 stores. It will be interesting to see the results. The customers are ready, now the technology needs to deliver on their expectations.

Ralph Jacobson
BrainTrust

Although the trend toward simpler user interfaces with apps is definitely helping the adoption rate of retailers’ apps, I believe there will be a point where users find too many apps on their devices and ultimately choose to move to retailers that have native web apps that are even more intuitive, rather than having to download more local apps.

Lee Peterson
BrainTrust

From the retailers we talk to, I believe there is a new, broad understanding that the issue isn’t the apps necessarily but conversion to the apps. Subsequently there has been much more focus on getting conversion (promos, specials, vivid benefits descriptions, etc.), which looks to be paying off.

Best conversion example: the airlines; they got us to use their technology by having people (lots of them) at the stations showing us what to do for months. They didn’t, and still don’t, assume everyone knows how to use their technology. They expected that most people would NOT get it. Retailers did not, at first, follow that pattern. I think that has now changed and thus we see these results. The thing is they’ll need to keep it up, just like the airlines did. We’re changing years of rote behavior here!

Seth Nagle
BrainTrust

Enhanced UX design! Many of these apps were clunky and limited and in the end, offered a poor user experience. Now with a basic template, an understanding of what shoppers want and a model to follow retailers are investing in their apps and shoppers are enjoying the dividends.

Offering exclusive deals on products or an express checkout option are two ways retailers can increase adoption rates moving into Q4.

Min-Jee Hwang
Guest

The biggest driver is functionality, which is no surprise. Retail apps are easier to use and offer more value to customers than before. Naturally, more people are using them. I expect the app usage to continue to increase as more retailers go omnichannel and customers become more accustomed to cross-channel shopping.

Camille P. Schuster, PhD.
BrainTrust

The app needs to function easily, access rewards seamlessly, offer increasing functionality and do all this better than the company’s website. To encourage future use, retailers need to offer functions that consumers value and to refrain from offering functions just because they can. The main reason for using apps is to streamline the process so additional functions need to streamline not confuse the process.

Rich Kizer
BrainTrust

Retailers want to build “tribes” who love their stores and this is one more avenue to do so. Synchrony’s survey on retail app usage shows that 60 percent use them to browse, 50 percent to access coupons and deals and 49 percent to make a purchase? It sounds like fertile territory to build those tribes.

The result of these apps will be smarter customers viewing more stores while showrooming and doing price comparisons. But hot competition in retail markets is nothing new.

We all knew the day was coming when retail apps would be a certainty and widespread. So retailers: create the best-trained associates and start building your tribe!

Ryan Mathews
BrainTrust

What increase? Four retail apps a year versus two? Sure, that’s a doubling, but off a ridiculously low base. Before we predict a tsunami of retail app use based on the fact that customers are now transacting with four whole different retailers, let’s be logical. Consumers will use retail apps when three conditions are met: the apps work seamlessly; the apps offer real value to the consumer as opposed to the seller; and the consumer is satisfied with all the terms associated with app use such as privacy, data sharing, security, etc.

Meet those conditions and retail app use will actually increase. It isn’t a matter of discovering the next high-tech gimmick, it’s a matter of finding out what customers like and dislike about apps and adjusting accordingly.

Jennifer McDermott
Guest

Retailers need to focus first and foremost on how to improve the customer experience through apps, rather than just how to monetize them. I think increased improvements in the former has driven the increase whereas before, many just saw apps as a checkbox action that wasn’t driving bottom line. Apps must drive value for the customer with discounts, rewards and personalized experiences all key drivers of usage.

Doug Garnett
BrainTrust
10 months 24 days ago

It’s good news that retailers are finally making apps that help shoppers — in the past too many retail apps desperately sought users without supplying value.

But the reports from these researchers are concerning. I don’t think it’s the glitzy, headline-producing features that are drawing consumers. It’s that the apps are finally starting at the basics: Does this app help me shop more successfully? This remains, still, a problem.

So, let’s look at Walgreens. The over-55 crowd very well might love the “Scan Refill” feature because their eyesight is at a point where’s it’s not much fun trying to read prescription numbers. But that doesn’t mean that their wellness features are useful, used, or drawing consumers. (My guess: They aren’t.)

My advice to retailers: Stay focused on making shopping better (finding product, locating it in the store, checkout, keeping track of discounts).

Susan O'Neal
BrainTrust
10 months 24 days ago

Amazon has helped create the expectation of a quality retail app experience and functionality. Thank you Amazon. Credit to Walgreens for really leaning into their competitive advantage with the prescription management. What the top apps really do well, however, also points to the future — and that is the app as a means to more holistically manage my relationship with that retailer. From buying products to managing subscriptions (prescriptions), rebates, returns and other means of optimizing purchase power. These things all promote and enable cooperation and co-investment from both parties in the customer/retailer relationship. I hope the coming year also sees more opportunities for retailers to invite brands more efficiently into that symbiotic partnership.

Ed Rosenbaum
BrainTrust

The first major change is that retailers finally figured out that apps were not simply a newspaper ad put on an electronic platform. That reality has set in and retailers have a better understanding of how to make the apps more appealing. Time has a lot to do with this. Retailers and consumers have found, over time, their own comfort level with the platforms. More younger consumers showed the only way they were going to shop at the particular stores is if the app made it appealing. Young people seemed to bring the older generation of shoppers with them. It goes back to a play on words here: build something worthwhile and they will come.

Ananda Chakravarty
BrainTrust

It’s very much an “apparent” increase. When customers are not using the apps they download, downloads become a poor measure of adoption. It’s download now to get the special in-store deal and delete it later to make room for the next app they want to try out. Most folks have a small number of apps (I think its between five and seven) on their devices that they regularly and consistently use. App downloads are usually catering to the already loyal customer base — not driving new acquisitions.

Apps that have been successful are tied more closely to value-added features like omnichannel pickup and scheduling appointments. Dunkin Brands in the QSR sector is a great example – they’ve expanded downloads but at the same time have gotten users to consistently use their app. 18MM downloads, AND 9MM users. https://www.qsrmagazine.com/news/dunkin-builds-digital-presence-ewallet-deal

Expect to see apps enhancing curbside pickup, blended physical-digital ordering, and managing service functions like repair scheduling in the future.

Cynthia Holcomb
BrainTrust

Well-designed apps could/will/are taking the heavy lifting out of sorting through hundreds to thousands of products loaded on websites for spot shopping. The more individually intuitive the app, the more likely the extreme ease of use for a shopper. Easy app product categories are products purchased based on specs, like drugs, cameras, diapers, etc. Tougher app product categories are apparel, shoes, furniture, home decor, etc. — products purchased based on individual taste and preference.

Adrian Weidmann
BrainTrust

There is no doubt that any increase in retailer app downloading and usage is due to more value — real or perceived, being given to the users by the retailer. I have long held that consistent use of retailer-specific apps will be limited to very few retailers for the next several years. While there is an increase, music and social media apps will continue to prevail for the next 36 months. That being said, the real value may not be in the number of users, but rather the increased value (revenue) and loyalty (stickiness) of those that actually do use retailer apps. The retailers should focus their attention on those users and their expectations — serve your existing customers exceptionally.

Shelley E. Kohan
BrainTrust

Many great points in the discussion. I would only add that as Gen Z begins entry into their careers next year after college graduation, we would expect higher app use. However, this may include streaming movies and games and not necessarily retail apps. YouTube is the #2 on the list which, again, given the aging of the Gen Z makes perfect sense.

The apps that help with utilitarian shopping will also increase like grocery store apps that spell c-o-n-v-e-n-i-e-n-c-e for Millennials and Gen Z. And Amazon fits into that niche, along with the intuitiveness of the app itself which explains the wide use.

James Tenser
BrainTrust

Collectively, app use is on an adoption curve not too different from other tech. Lots of folks use a few; few folks use a lot.

Individual apps gain usage when their features add value to users. Retailers keep modifying functionality with this goal in mind, but ultimately, each app is a “walled garden” experience for shoppers. Accumulating points from a handful of visits creates a poor effort/reward ratio. That’s why most shoppers will always limit app use to a handful.

Truly useful services, such as prescription refills or assortment curation, have potential to earn followers. The more seamlessly these are executed, the better.

Ultimately, I believe many mobile apps are likely to be overtaken by voice services/skills that are more streamlined and web-based. “Alexa, reorder my water pills from CVS,” is way less effort than finding and opening an app.

Ricardo Belmar
BrainTrust
This is all about value to the customer. Early retail apps were no more than duplicating the web experience because retailers felt they “had to have” an app. Now, with more shoppers leveraging buy-online pick up in-store and similar capabilities, the app experience becomes a critical part of the buying journey. This is something you just can’t duplicate with the mobile web. Once retailers realized there are unique capabilities and value they can deliver to customers via an app, customers, in turn, realized they should use them. Walmart and Target are leveraging the in-store experience and checkout process itself to drive app usage with their mobile wallet features. QSR brands have realized they can drive mobile ordering volume with an app and geofencing that brings customers value because they don’t have to wait in line anymore and get their food exactly the way they want it. Loyalty programs and rewards are secondary in this case as those can be delivered either with or without an app. Most smartphone users don’t worry about how many apps… Read more »
Ken Morris
BrainTrust

The biggest driver of the increase in app usage is the improved quality of retailer apps and the valuable features they offer consumers. Many apps are now integrated with the retailer’s loyalty program, include coupons, product finders, product details and instant promotions based on location in the store. The apps that also offer a mobile payments have additional draw.

Even with all the cool features, it is still a challenge to get consumers to download and use your branded app. With growing app fatigue, many consumers don’t want to add another app to their phone unless it is for something they will use very frequently.

Once retailers get customers hooked with faster checkout and compelling rewards, they are more likely to increase both the number of visits and the spend per visit. We need these apps to be auto launching, voice activated or maybe via customer-facing Wi-Fi … it needs to be easier.

Shep Hyken
BrainTrust

Consumers are finding apps from retailers easy to use — and convenient. More and more shoppers are using their smart phones. It’s part of their lifestyle. The phone is smarter and smarter. (Maybe they should call it a Smarter Phone.) The tipping point occurred a while back, and the usage of retail apps continues to climb.

Retailers will continue to refine their apps to make doing business with them more convenient. They will also tie loyalty programs into the app (as did Starbucks), to encourage use of the app — and use of the brand.

wpDiscuz
Braintrust
"Now that they are starting to offer things that are actually useful/valuable to consumers, funny thing -- consumers are starting to use them!"
"Retail apps are easier to use and offer more value to customers than before. Naturally, more people are using them."
"I would only add that as Gen Z begins entry into their careers next year after college graduation, we would expect higher app use. "

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