For an e-commerce business, the sky is not the limit. In fact, it’s not even close. People are increasingly shopping online, effectively making e-commerce a major force in the global economy. A few years ago, online shopping used to be merely for luxury and convenience, but things have definitely changed – it is now considered a necessity.
It is no secret that mobile usage has changed human existence. Research conducted by the Pew Research Center revealed that 51% of online sales in the US are done through mobile devices. Today, sales through mobile apps are growing at unprecedented rates, partly due to the proliferation of smartphones and the power of the internet. This has enabled consumers throughout the world to make purchases wherever they are and whenever they want.
Some businesses consider a well-designed and highly-optimized website a fundamental asset of a good e-commerce venture. If you fall into this category and are still considering whether or not to develop a mobile app for e-commerce business, ThinkWithGoogle has done the analysis for you.
The results? You’ll need to have an e-commerce app or risk losing out to your competitors.
Here are a few reasons why now might just be the right time to use an e-commerce app to launch your online business:
1. Mobile Commerce Is On The Rise
Mobile Commerce or m-commerce sales are gradually taking over the e-commerce industry. While the overall e-commerce industry is expected to hit $4.8 trillion or 17.5% of all retail sales by 2021, a more in-depth analysis reveals that m-commerce will be the chief driver of this growth. M-commerce has made it possible for people to buy products while riding a train, taking a ride on Uber, or even right from their beds. Desktop sales held a prominent value in 2018, accounting for 52.4% of online transactions. However, their growth has slowed to 5% year over year. On the other hand, mobile commerce sales are rising dramatically, with an estimated growth of 37.7% last year.
By 2023, mobile commerce will account for 73% of all e-commerce sales throughout the world. But why these statistics? People are increasingly getting used to shopping through their smartphones and tablets because they are much more convenient and within easy reach.
2. Better Efficiency And Increased Revenues
There’s no doubt that mobile apps are easy to use and manage. Although businesses often term their execution as costly, mobile apps are better placed to satisfy the needs of customers and boost sales. A well-developed app with the right functionality and concept can quickly bring in new customers and increase conversion rates. More customers mean more orders, and hence profits
Tools such as ‘push notifications’ that can be incorporated into mobile apps can make it easy for businesses to deliver information that can motivate customers to place instant orders.
3. Direct Marketing
Over the last 15 years, the marketing industry has witnessed rapid changes. The explosive growth of the internet brought about a shift in consumer focus from conventional forms of advertising to digital forms. Today, more people are connected to the internet through their handheld devices.
Smartphones have also disrupted the way we shop and interact with brands. As more mobile devices continue to account for more sales, business is fighting hard to incorporate these devices into their marketing strategies. To leverage the exponential potential of connected consumers, businesses must devise ways of offering steady involvement through mobile phones. Mobile apps not only keep customers connected, but can also be used to deliver deals, coupons, and offers effectively to customers.
4. Increased Convenience For Users
Nowadays, customers appreciate the convenience that comes with mobile commerce. Instead of heading to your desk to shop using a desktop computer, consumers are now placing orders directly from their mobile devices during tea breaks, in harsh weather, or just before a school run. The presence of e-commerce apps has made it possible for everyone, including wheelchair users and busy parents to purchase products with a lot of ease.
Research also shows that more than half of mobile consumers use their smartphones to monitor prices, check for offers and discounts, read reviews, and compare prices of products, all of which inform their purchase decisions.
5. Strengthened Customer Loyalty
Mobile applications in e-commerce have the ability to create brand loyalty. Once you are able to create a positive association with consumers through apps, they will exhibit loyalty through repeat purchases, in spite of efforts by competitors aimed at luring them away.
A research conducted by Adobe revealed that 67% of online shoppers who order products through mobile apps prefer applications offered by their favorite e-commerce stores. This shows that mobile apps enhance the connection between customers and an online store.
6. Better Customer Acquisition And Retention
Mobile applications can easily be seen as a copy of an existing e-commerce platform. However, they’re usually better optimized, well-designed, and personalized. This has a profoundly positive effect on the acquisition and retention of new customers.
Here are a few advantages of mobile apps in customer retention over e-commerce websites:
- Short loading time: With mobile apps, a web page loads much faster, reeling in more customers. This is especially important in the e-commerce business where seconds count. A load time of more than 2 seconds will likely turn your customers away.
- Offline access: Good eCommerce platforms should enable the user to access basic app functionality even when offline.
- Personalized content: Mobile apps can save previous orders and a customer’s shopping preferences as a basis for targeted products.
7. Detailed Analytics
A mobile app makes data tracking and collection an easy process. Through mobile functionality, you can monitor customer’s interaction and obtain valuable information such as their responsiveness to some content or features, session length, feedback, and audience composition. This will help in creating personalized content, aligning updates and improvements, developing an advanced marketing strategy, as well as creating efficient promotional campaigns.
8. Consumer Preference For Mobile Apps
If you are generating e-commerce sales solely from your online e-commerce website, the chances are that you may not realize even half the potential of your venture. Sometimes, you may look at data and feel satisfied that your site is reaching mobile users through web browsers. However, you could be barely scratching the surface.
This is not to say that a mobile-friendly website is not important – it’s absolutely necessary. In fact, an estimated 85% of smartphone users expect a website to look equally good on a smartphone if not better. If your site is not well configured for a smartphone, 88% of users are likely to visit your competitor’s website. You could also lose a further 47% of visitors if your site has a load time of more than 2 seconds.
But while having a mobile-friendly e-commerce website can be vital for increasing sales and retaining customers, you still have to pay keen attention to statistics. According to stats, a whopping 78% of e-commerce customers would rather shop using a mobile app than a website, be it mobile-friendly or not.
Assuming that you’re currently getting 100 transactions done through smartphones every week, 80 of those customers would have preferred using your e-commerce mobile app, and those are just your existing customers. How many prospective clients could you be losing while operating without a mobile app? Certainly countless.
9. Reduced Response Rate
When accessing a service through a web browser, users are generally concerned about how fast the action can be completed. In the case of mobile apps, however, the response time is typically quicker, and actions are completed much faster compared to web browsers. This not only leaves users feeling satisfied, but enhances your online brand credibility as well. Through mobile apps, users can refine their preferences, making it even faster and easier to shop online.
App users can also provide feedback on their experience, enabling app owners to make necessary adjustments. This reduces the time needed for app improvements, and hence a higher response rate.
10. Increased Conversion
An app’s enhanced user interface and easy navigation have a far-reaching impact on conversion rates. Mobile apps play a very crucial role in boosting conversions and have been estimated as performing 1.5 times higher than a desktop site.
Also, their ease of accessing several options and fields in e-commerce platforms increases the average session time of users. An increase in session duration means an increase in the likelihood of conversion.
Perhaps one of the essential aspects to consider when building your stores’ mobile app is its engagement factor, which is increasingly shaping online sales. Without app engagement, there is no mobile m-commerce conversion. Research by eMarketer revealed that a fifth of android users and a quarter of iOS users open a mobile app once a day after completing the installation process. However, the number of users using the app plummets to an average of 3.25% a month after the installation.
Since engagement factors are designed to foster app usage, businesses have to ensure their apps are adequately optimized for user engagement.
11. Better Visibility To Your Customers
Smartphone addiction is real – people are using them when eating, walking, or even when crossing the road! If your customer is among the world’s top smartphone users, data shows they could be spending up to 4 hours and 30 minutes on their devices every day, or 3 hours and 15 minutes if they’re average users, according to Rescue Time, a productivity software company.
This means that many consumers are glued to their phones. This factor presents a unique opportunity for you to come face to face with your customers and maintain constant communication. When a customer installs your app, it means you have already won half the battle for their money. Additions like push notifications and chatbots that automate your communication with customers may be just what you need to win the rest of the battle.
12. Increase In Profit Margins
E-commerce apps have made it incredibly easy to order products online through smartphones and complete financial transactions in a quick and seamless way. For this reason, m-commerce businesses are better placed to make larger profits by staying connected to customers on their fingertips.
The boom in in-app mobile payments systems is giving conventional e-commerce stores a run for their money. These payment systems make it easy and convenient for customers to deal with financial transactions. Whether they support split or single payments, in-app mobile payments apps can only bolster conversion, and hence revenue and profits.
13. Customers Won’t Have A Choice To Ignore You
Targeting your customers can be a real battle, particularly if you’re looking to lure them for a conversation. With a mobile application, however, you can easily attract customers at specific touchpoints. When users install your app, you can target them with push notifications, which are more likely to be read because they’re sent in real-time. App publishers consider push notifications as a way to communicate directly with app users. You can also use them to drive promotions or offers to increase sales.
14. Reactivation
Some of your customers might have left but retained your app on their phones. Others may be set to leave, or have just gone for months without opening the app. In such cases, you need to remind them of your application’s existence through email, calls, push notifications, or text messages. Whatever the channel you use, do it appropriately.
It is also essential to understand the reason the customer left before you try reaching out to them. This prevents the chance of pitching a product to a customer who has already rejected the same product. You have to be smart about how you reach out and engage them. Be sure to give them a reason to come back.
15. Personal Purchasing Experience
According to McKinsey research, personalization can boost ROI by five to eight times of marketing spend, and increase sales by at least 10%. However, you need to collect a substantial amount of data to understand the behavior of your customers. You will want to assess their frequently visited pages, content types that can get them excited, and the type of devices they use when accessing your website.
Forbes believes that the opportunity in the e-commerce space is enormous. They project that the total retail sales could hit $5.68 trillion by 2021. Of this, a hefty prize – $2.95 trillion to be exact – awaits companies that incorporate a smart digital strategy to personalize their users’ experiences. Personalization not only improves user experience, but it also makes the whole online shopping process relevant.
16. Better Cart Conversion Rates
Shopping cart abandonment is a significant issue for e-commerce businesses. It’s one thing to persuade a customer to add an item to the cart, and a completely different thing to convince them to checkout and complete a purchase. A few reasons that make customers leave before completing their purchase include:
- Where a customer is forced to create an account before completing their purchase
- Extra taxes and shipping cost
- Lengthy and complicated checkout processes
- Bugs on an e-commerce site and loading issues
- A suspicious site that may not be trusted with credit card information
Cart abandonment can be very frustrating because you’ll feel that the customer was just steps away from the end of the process. As a result, you may want to know what might have gone wrong. According to research by Baymard, the average cart abandonment rate in online shopping is around 69.6%. However, these are statistics registered for desktop users. When it comes to mobile phone browsers, statistics point to a higher cart abandonment rate averaging about 97%!
There are many solutions to resolve this problem, and creating an e-commerce app is among them. Unlike desktop and mobile phone browsers, mobile apps have considerably lower cart abandonment rates of 20% owing to the easy checkout processes. Payment and shipping details are stored in the app, making it easier to complete the checkout process in one click. This way, customers can go through the procedure quickly and without distraction.
Also, a customer who visits an e-commerce website without knowing what to check or purchase will most likely exit without purchasing a product. This behavior is mainly promoted by desktop versions of e-commerce sites. When a customer accesses your website through a mobile app, it is more probable that they have an idea of what they need to buy – underscoring the importance of an app.
Through a mobile app, customers can use alternative forms of payments like Google Pay, Apple Pay, or PayPal. If you can integrate these options into your mobile app, users can complete a payment process by just scanning their fingerprints. It is essential to know that lengthy payment processes may contribute to cart abandonment. A mobile app with easy checkout and multiple payment methods will definitely reduce abandonment rates.
17. Increase Average Order Value
A mobile app has a positive impact on user experience and conversion rates. However, the benefits of building a mobile app for your e-commerce store are not just limited to a customer’s experience and conversion rates. A mobile app is crucial for improving a customers’ minimum order value too.
When people shop from a mobile app, they will find it easy to browse through products. This way, they get more opportunities to see what you’re offering.
Over time, it has been observed that e-commerce apps have better order value than both desktop and mobile phone browsers.If you can increase your average order value by just $10, it would make a massive difference for your sales and profits. Here’s an example of what this could mean for your business – start by assuming you currently have 1000 mobile transactions every month. If you can increase every transaction session by $10, it would mean an extra $10,000 a month and $120,000 in one year. If the increased number of transactions are factored in, this figure will rise even higher.
18. Location-Based Services
Mobile devices have location-based services that may be incorporated into your application. These services will allow you to create promotional messages and send them based on where your customers are located.
You could also utilize this service by sending messages to your customers once they enter a physical store to merge the mobile shopping experience with the actual physical experience. When customers are traveling outside their neighborhoods, you may want to notify them about a new store location as they travel. If you’re operating exclusively online, location-based services can also benefit you. You can use a location service to alert your customers about a shipping discount based on where they are so that they can place an order before the promotion lapses.
Final Thoughts
Whether you’re selling exclusively through an app or adding a mobile app to complement your online shopping website, one thing is certain – app sales are necessary. If you don’t find a way to sell your products through an app, your customers may soon start spending their money elsewhere.
Generally, it’s easy, low-cost, and low-risk to start an online business using e-commerce apps. As long as you have a good business plan and choose your products wisely, there is a significant potential for high ROI in the long-term. Be sure to take the following steps when your app is up:
- Keep upgrading your app to improve security and build stability.
- Incentivize users to leave feedback
- Engage your users regularly and be prompt in responding to their feedback
- Create occasional surveys that are meant to make you understand user behavior.
That said, starting an e-commerce venture calls for smart decisions and adequate steps that need to come together at the right time. If you break into e-commerce intending to make a quick buck, that’s all you may achieve. But if you have million-dollar aspirations, it is crucial to have a scalable goal and a profitable business that lasts. Needless to say, it is crucial to have a long-term vision for building assets that create real and lasting value in the market.
