Determining the Right Time for Ecommerce Brands to Launch their Own App

In an increasingly mobile-centric world, consumers rely heavily on their smartphones for various activities, including shopping. This trend has prompted e-commerce brands to consider developing their own apps.

This comprehensive guide delves into the strategic considerations surrounding app development for e-commerce businesses. We will explore the potential benefits an app can provide, compare the dynamics of web versus app, and discuss scenarios where an app might not be the ideal solution.

Top 4 reasons an app enables enhanced business impact

Mobile applications have higher conversion rates than websites, as customers using them convert three times more often. Leveraging this alternate growth channel helps brands achieve desired business outcomes.

With over 8.93 million apps available globally, users have an extensive selection to choose from. Google Play Store boasts more than 3.5 million apps, while the Apple App Store offers over 1.6 million apps for download. (Source - Statista)

Apps have gained popularity due to their ease of access, convenience, and effortless navigation. This is evident from the fact that users spend a significant 90 percent of their mobile time on apps, with only 10 percent dedicated to mobile browsers.

The following metrics show how applications positively impact various business operations.

1. Increased Conversion Rates: Mobile applications offer higher conversion rates compared to mobile websites, leading to increased revenue potential for businesses. Statistics from Criteo reveal that customers utilizing retailers' apps convert at a rate three times higher than those visiting their websites. This significant difference in conversion rates can translate into substantial revenue growth for companies.

2. Higher log in Rate: Compared to websites, apps have much higher login rates, with a significant 80-fold increase. This is primarily due to the fact that apps are conveniently located on the user's home screen, allowing for instantaneous access to account information with just a single tap. In contrast, websites require users to navigate through bookmarks or search engines, which adds an additional step to the login process and decreases the overall login rate.

3. Facilitates Repeat Purchases: In a fiercely competitive business environment, customer retention is paramount. The key lies in transforming one-time buyers into fervent advocates - loyal supporters who not only make repeat purchases but also become vocal brand ambassadors. Direct customer communication unlocks valuable first-party data, which provides deep insights into their needs and preferences. By utilizing loyalty programs, personalized interactions, and transparent data practices, businesses can encourage information sharing. This strategy enhances retargeting efforts, making them cost-effective and enabling smarter decision-making.

4. Increase in Average Order Value (AOV): Studies indicate that mobile applications have a notable advantage in terms of average order value (AOV). Specifically, mobile apps boast an AOV 2.4 times higher compared to mobile web and 50% higher than desktop. These enhanced factors, including convenience, speed, and simplicity, contribute to substantial returns even without additional pricing incentives or promotions.

Visualize yourself browsing your preferred beauty app. You're greeted with tailored recommendations for a new foundation shade, influenced by your prior purchases. As you scroll down, you discover a complementary concealer that seamlessly complements your skin tone, conveniently displayed alongside a limited-time discount for purchasing both products together. This enticing offer prompts you to add both items to your cart, inadvertently increasing the overall value of your order.

Can businesses survive with only a web strategy?

When deciding between a flashy app and a robust website, consider prioritizing a mobile-optimized website first. Your website serves as your digital storefront, allowing new customers to engage with your brand's identity. A seamless mobile experience is crucial for creating positive first impressions, keeping visitors engaged and exploring your offerings.

While apps provide a targeted and personalized experience, they are better suited for established businesses with a loyal customer base and a significant market share.

In 2015, Myntra, convinced of the mobile-first future, shut down its website, relying solely on its app. Initial results were promising, but crucial gaps soon became apparent. A significant portion of their customer base, accustomed to web browsing, felt excluded. Additionally, the lack of SEO and discoverability limitations hindered their growth. A year later, Myntra relaunched its website, acknowledging the importance of a multi-channel approach.

"The key takeaway is that e-commerce success depends on understanding your audience and offering them a seamless, multi-channel experience."

Reasons for scaling an app strategy

Launching an app for multi-channel presence has become a common practice for e-commerce brands. However, merely having an app is not sufficient; it requires ongoing investment to maximize its benefits. Here are some compelling reasons why focusing on your app strategy is crucial:

• Performance: Web views are not as performant as apps, especially with complex tasks or visuals, while apps offer a smoother experience and use the device's features efficiently.

• Personalisation: Personalize the shopping app experience through customer data.

Example of personalised recommendations in a quick commerce app

• Marketing efficiency: Apps enhance first-party data, improving customer understanding. This allows for more effective communication channels and personalised content. In-app and push notifications are efficient marketing tools, bypassing additional clicks or app opens and eliminating media buying costs.

"The key to successful push notifications lies in offering real value to users. Steer clear of flooding their screens with irrelevant messages. Instead, prioritize timely and targeted notifications that provide genuine benefits and prompt user engagement."

• Leverage Mobile-Specific Features: Enhance the shopping experience by incorporating features such as mobile payments and geolocation. Transcend conventional methods by leveraging AR/VR technologies that allow customers to virtually try on clothes or visualize furniture in their own space before making a purchase. This innovative approach not only encourages deeper engagement but also empowers customers to make informed decisions, resulting in a more satisfying shopping journey.

Example: Myntra leveraging VR tech to allow customers to try on beauty products aiding purchase decision

In what situations should you refrain from launching your own app?

Before launching the app, the first thing to validate is if your product is ready for the market? There are often some blind spots that e-commerce brands miss in the rush to grow their business. Here are some key parameters for you to evaluate if it’s right for you to launch your app.

• Product-Market-Fit: It is important that your ideal customers are loving your products. While VR fitness offers a potentially immersive and interactive experience, launching an app without considering the cost and accessibility of VR headsets for your target audience can be a misstep. If the technology is out of reach for a significant portion of your target market, the app’s adoption rate will likely be limited.

• Frequency of Use: When considering the launch of a new app, one crucial factor to assess is the frequency of customer purchases and the necessity of a dedicated app for the product. Take, for example, washing machines. The infrequent purchase cycle, typically ranging from 4 to 7 years, makes a separate app less valuable. The infrequency of purchases reduces the need for a dedicated app.

However, the presence of app-specific features can change this dynamic. A prime example is Atomberg's smart fans. Despite their infrequent purchase cycle, the app provides essential control functions that enhance customer engagement with the product.

• Adoption Curve: To maximize your business growth, it's crucial to design ideal customer personas with a steep adoption curve. This means they readily embrace your product, enabling you to scale that user persona efficiently and acquire new users.

For instance, if you offer a range of chair pillows designed to alleviate back pain and your target customer persona is disabled individuals, but they are not promptly trying out or adapting to your product, it may be necessary to re-evaluate your product specifications or consider a different customer persona. Focusing on a niche audience that genuinely needs and values your product is essential for success.

• Product Range: For limited product offerings, utilizing marketplaces or quick commerce platforms is a sensible strategy.

• Distribution Potential: To ensure a smooth distribution and logistics process for your product, it is crucial to consider the specific needs of your target personas. Before scaling, you should proactively address any potential challenges related to perishability, leakages, or other logistical obstacles. By doing so, you can minimize operational setbacks and ensure the successful delivery of your product to customers.

Approach to build an app: No code/Agency/In House Team

Choosing the right app development approach is crucial, but navigating through different stages of development, varying budgets, and unique brand identities can be daunting. Here's a framework to help you make an informed decision:

Consider your startup's specific needs, development stage, and budget. There is no one-size-fits-all solution; each approach has its advantages and disadvantages.Evaluate the level of customization required. If you need an app tailored to your unique brand identity and requirements, consider a custom development approach.Assess your budget and resources. Custom development can be more expensive and time-consuming than using pre-built solutions or platforms.Think about the long-term vision for your app. Consider scalability, flexibility, and maintainability when choosing a development approach.

Conclusion

Developing and launching a mobile app is a challenging decision often faced by brands. A clear strategy is vital to navigate this decision effectively.

The dominance of smartphones in our lives has created a unique opportunity for brands to engage with their customers. With the rise of mobile commerce, creating a mobile app can serve as a powerful growth lever, allowing brands to connect, engage, and drive sales through a customized and optimized mobile experience.

Source: Ecommerce Omni channel solutions