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03/02/2021

App Commerce: A Step Beyond Digital

2020 will be remembered for the year of the digital “haves” and “have nots” in retail: pandemic lockdowns handed digitally native retailers a gift, as non-essential physical retail was forced to close.

A fact that has perhaps been overlooked, however, is that roughly half of online sales now come from physical retailers’ online stores. In fact, they actually gained share during this year’s lockdowns.

So, only those offering a consistent shopping experience, both in-store and online, will survive this year’s acceleration of digital’s influence on consumer expectations and shopping journeys.

Digital consumption is on the rise. However, the online shopping experience still remains clunky. Retailers must respond by investing in channels that help them stand out and appeal to customers.

To do this, they must look beyond mere ecommerce to create less functional and more immersive, tailor-made digital spaces for their customers that can both compete online and enhance the store.

It’s not surprising then that, with time spent on mobile spiking by 20% globally this year, retailers are prioritizing a "mobile first" app commerce-led strategy.

The new storefront

With 90% of user time on mobile spent in-app, and consumers’ expectations shaped by digital, retailers without an app commerce strategy risk missing out on a swathe of potential new customers.

The rise of social shopping and mobile advertising has also contributed to mobile commerce growth. It’s predicted that mobile will account for 45% of U.S. e-commerce, or $284 billion, in 2020.

In the UK, retail m-commerce sales are expected to overtake ecommerce sales for the first time this year. So, it pays to have a strong mobile option, with app commerce being the best place to start. 

App-based m-commerce is emerging as best practice online because it provides a differentiated digital experience to integrate with other touch points, like social media, as well as the physical store.

It also provides a gateway to the brand that can then also be used to also highlight the ability to engage via other channels and highlight the physical store’s sensory and immersive advantages.

As physical sales spaces reopen, apps can provide the means to incentivize customers who might be reticent to venture back into stores with exclusive offers, events and services, such as scan and pay.

Customer retention and acquisition

Much like in-store, in-app tech enables users to interact with a retailer far beyond traditional transactional needs. It can showcase a brand and its products new, rich and immersive ways. 

The likes of IKEA's in-app augmented reality (AR) can help customers visualize new furniture in their own settings, while makeup brands are using AR to virtually try on products and visualise new looks. 

Offering new, immersive ways to engage in-app means app commerce is not only key to acquiring new customers, but also for retaining those that are most loyal and driving repeat purchases.

The who, what, when and how of app user activity provide essential insight into why customers shop a particular retailer or brand. Understanding your best customers also helps find new ones like them. 

Valuable app sales and engagement data that can be cross-referenced back to an individual customer’s identity and extrapolated to group personas can support greater personalization too.

By appealing to customers on a one-to-basis, app owners can also use shopping journey activity to understand demand across products and underpin better buying, planning and forecasting decisions.

Enhancing the total customer offer 

Further, using tech to create an environment that is appealing to loyal customers, whether with swipe-to-like product gamification or AR try-ons, shopping apps can be fun as well as purposeful.

But apps are also key to extending the role and relevance of the store, by offering customers a way to be recognized and offered an enhanced experience at every stage of their shopping journeys.

Australia’s largest retailer, Cotton On, launched its iOS shopping app before Black Friday 2019, for example, and found app customers - whether they also shop in-store or online - engage the most.

Coastal lifestyle retailer, SurfStitch, is using its app to engage its customers wherever they are active, while U.S. specialty retailer, Francesca’s is looking to enhance their mobile customer experience.

Belk has fully integrated curbside pickup through its app to enhance collection options during the pandemic.

These retailers realize just now invaluable app commerce has now become for gaining insight into how customers interact with their brands, to engage in more relevant, impactful and profitable ways.

Jay Johnston is CEO of Poq.