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Mobile retail apps: Balancing benefits with costs

Mobile retail apps: Balancing benefits with costs

Author: Maria Alejandra Lopez

Source: Retail Customer Experience 

Retailers rely on their consumer-facing mobile apps to engage loyal customers at crucial search, browse and discovery phases of their shopping journeys and purchase cycles. But can retailers do more to boost the success and profitability of their mobile app strategies?

Worldwide, shopping app downloads grew to 5.70 billion in 2018, up 9.3% over 2017. Retail and e-commerce apps also have the highest retention rates compared to all other app categories. What does this mean for retailers? New retail app users are on the rise and — if the app is easy, useful, seamless and frictionless — they’ll likely return more often to use it once downloaded.

In a recent Eagle Eye Purple paper, The Digital Imperative, we found consumers in the U.S, Canada, Australia and the U.K. visited a web site or app (68%) slightly more than a conventional store or shop before making a purchase (67%). The need for a digital presence optimized for mobile is in plain sight, but critical costs can’t be ignored if retailers want to implement mobile sales and marketing functionality that’s commercially viable.

What does a mobile retail app cost you?

There are three types of costs associated with implementing a mobile-optimized website or app: these include building it, getting customers to download it and then its ongoing management and optimization. While it’s common for these costs to be grouped together, it’s important to consider them individually.

Whether looking to streamline mobile sales and marketing functionality or hire an entire team of developers when an off-the-shelf solution can satisfy your objectives and get the app in market quickly, here’s what you need know when balancing the benefits and the costs of implementing retail mobile apps.

Build cost
The cost of building an app are generally incurred in one of two ways; retailers can build the app in-house or implement a white-labelled app already optimized for their shoppers’ needs. Both options have benefits – a custom app built from scratch could offer a greater level of customization to integrate with existing business processes. Whereas a white-labelled app can offer everything customers want from a mobile retail app for a significantly lower build cost and some process reengineering. While the costs of building an app can range dramatically depending on your business type and the complexities of your offering, keeping this trade-off in mind can help balance the cost of integration and optimization benefits from the get-go.

Download cost
To lower the marketing costs associated with app downloads, retailers should ensure customers have a strong incentive to download it. Consider making your app a channel where customers can receive attractive and exclusive offers. Our research shows 90% of consumers say whether an offer is useful is the most important factor in their decision to redeem it. Imagine the power of an offer delivered to one of your customers in-app for an item they recently added to their basket on your website. Because the offer is tailored to their individual preferences, such as for an item available in their nearest store, the customer is more likely to redeem it.

Better still, the customer is so impressed by the offer, they spread the word about the app to their friends, who also download it. To deliver these personalized offers, you need to ensure your mobile app is connected into your wider marketing platform so you can see customer preferences across channels. Sending personalized offers in this way is just one example of how to get customers downloading (and engaging with) your app in the most cost-efficient and effective way.

Management cost
Once a mobile app is built retailers must still ensure customers have a compelling reason to keep using the app and that it continues to function seamlessly. This ongoing process of app management and maintenance can require extensive resources. A technology provider can help manage your app for a significantly lower cost than an in-house team. Technology providers can typically draw on their breadth of experience to create efficiencies throughout the management process, such as streamlining the process for customers to save and redeem offers or leave feedback and for retailers to manage queries in-app.

These types of efficiencies benefit retailers two-fold; they help to optimize the customer experience in your app environment while simultaneously lowering technology management costs.

Mobile apps: Balancing costs with benefits

It’s clear mobile retail apps provide a platform to engage an increasing number of shoppers at crucial moments in their shopping journeys, making them a highly valuable investment. But you need to consider the costs involved and the utility that effective retail apps provide. You’re not trying to build an app like Facebook with a 90% adoption rate. Instead, you should aim to build an app that integrates with social marketing channels to appeal to a smaller, yet highly loyal groups of your customers — those who spend the most (and most often).

If you’re ready to optimize or launch a consumer-facing mobile app, leveraging a technology partner to assist with the build, download and management of the app is a cost-effective solution. When it comes down to it, the right partner for your retail business will be one that understands your business’ needs and can deliver an app product with the functionality to meet those needs. That’s the partner who will help you get to that critical mass of app users and convert them into loyal customers.

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