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Top Retailer Apps Lacking Transactional Knack

13 Aug, 2014 By: Doug McPherson

SAN FRANCISCO - Retailers have room to improve their mobile apps, a new study finds.

While most retailers have apps (79 percent), just 40 percent of those allow users to make a purchase within the app, says mobile marketing firm AppLovin, which examined the top 100 retailers listed by the National Retail Federation (NRF).

Other findings:

  • Of the 79 percent of retailers with apps, only half support direct, in-app shopping
  • Only 27 percent of retailers with apps were rated 3.5 and higher, and only a third of retailers with apps had pushed updates in the last month
  • Of the 24 top supermarkets that have apps, only one allows for in-app purchasing

“If it sounds like we are being rough on those who need to up their mobile game, the proof is in the numbers,” AppLovin co-founder and CEO Adam Foroughi, writes in a blog about the report.

He says retailers that have embraced mobile are already reaping the benefits. Median 2013 sales for companies with apps reached $9.3 billion, while $5.6 billion was the median for companies without apps. “If retailers aren’t investing in mobile and taking it seriously, they are losing big bucks, and that loss is only going to continue to grow as mobile continues to explode,” he writes.

Foroughi suggests traditional retailers could learn a lot from digital-only or mobile-only companies like OpenTable and ride-sharing service Uber, whose apps provide a more seamless payment experience. “In a lot of these [retailer] apps, you end up looking at content in the application, or products, but to actually check out it links you out of the app to the mobile site,” which ends up discouraging sales, he contends.

“The data from companies that have invested in apps suggests that a good app experience really drives up the revenue per user, to the level of two to four times anything these brands are seeing on the mobile web,” he adds.

Forrester Research estimates that 29 percent of all online retail sales in the U.S. will be conducted on smartphones and tablets this year, with media goods (video, music, books), clothing and consumer electronics accounting for most of the estimated $86 billion in mobile transactions.

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