A Renaissance for Retail Apps

Author: Krista Garcia

August 15, 2018

Retail apps have been undergoing a rebirth of sorts. For a long time, users browsed on mobile but didn't convert, so retailers didn't prioritize app strategies. Behavior has changed, though, leaving some to play catch-up. Now, a majority of mobile retail transactions in North America occur via app.

According to analysis of mobile retail app usage for the first half of 2018 by Localytics, user retention is up from the same time period last year. Close to half (47%) of those who download an app are still using it one month later, compared with 39% in H1 2017. Users begin to fall off as time goes by: 37% are using an app after two months and 32% after three.

The reasons for renewed interest in retail apps include the continued growth of mobile commerce, increased time spent in-app and marketers reducing friction and making apps more personalized. Marketers have been focused on user acquisition to the exclusion of retention and increasing lifetime value, but that's changing.

Users can only interact with so many retailers, so it makes sense that the most popular retail apps—aside from savings apps—belong to many of the largest retailers. In March 2018, Amazon, Walmart, eBay and Target all placed in the top 10 retail apps by visits, according to comScore. Kroger and Walgreens also made the list, reflecting the regular purchases of groceries and health and beauty items.

Successful retail apps also communicate value beyond the transactional. Beauty retailer Sephora uses augmented realty (AR) to offer virtual try-ons of lipstick shades and styles of eyelashes. The Home Depot provides visual search to help refine products consumers are looking for, while most grocery apps have shopping list tools and can map where items are located.

Subscribers to eMarketer PRO have access to a deep-dive report on retail apps: "Mobile Retail Apps 2018: Strategies to Acquire, Engage and Retain Users." Nonsubscribers can learn more here