Shopping apps operated by e-commerce providers or brands are becoming increasingly popular with European consumers who shop using mobile devices. Online retailers who want to target local customers and generate additional sales should therefore respond to this trend. Afterall, mobile apps could become the most important sales channel in the future.
With the growing share of mobile E-Commerce sales, the importance of shopping apps as a sales channel is increasing. In countries like Germany, Great Britain or Sweden, M-Commerce already accounts for at least 50 percent of sales.
Local consumers certainly see advantages of the mobile applications they use via smartphones or tablets compared to optimized websites. Shopping apps are considered particularly convenient and fast: they usually offer a more personal shopping experience that invites consumers to browse through the product world for longer than they otherwise would. Furthermore, customers enjoy app shopping because the channel’s payment methods are considered fast and securely.
In-App-Shopping: An ascending trend
As early as 2018, European retailers stated in the Global Commerce Review by E-Commerce marketing specialist Criteo that they generate almost half (47 percent) of their mobile revenues via the app. According to the survey, the number of in-app transactions was even higher in countries such as Germany (50 percent), the UK (55 percent), Norway (57 percent) and Sweden (60 percent).
This trend is continuing as digital commerce is generally on the rise in Europe. The German statistics portal Statista speaks of an annual growth in digital payments of 7.6 percent – with digital commerce being awarded the largest market share in 2020 with a total transaction value of more than 750 million US dollars.
Although it is unlikely that this forecast can be achieved in the light of the corona pandemic and the massive collapse of selective E-Commerce segments, it is expected that the market will continue to grow. However, in view of the general surge in digitization in response to the crisis, it can be assumed that mobile devices and the associated preference for shopping via apps will continue to be important growth drivers for online retailers.
Mobile apps: Retailers invest in expansion
Shopping apps are being developed as a sales channel in many different areas: In a report published by the software provider divante in collaboration with the market researcher KANTAR, mobile apps are considered a major trend for 2020, along with topics such as mobile payment and advertising and sales on marketplaces. However, there are differences when comparing European countries: While German and British online retailers particularly invested in mobile apps in 2019 (39 percent), less financial resources were assigned to mobile apps in Finland, for example – here the share only came up to 22 percent. On a global average, 33 percent of the retailers surveyed invested in their own shopping apps.
Advertise app, persuade customers
However, simply making your own app available in stores is not enough. Online retailers are well advised to advertise their mobile offering on various channels such as Google, Instagram and directly in the App Store in order to increase awareness in the respective European countries. Once customers have installed the app on their mobile devices, special offers should encourage them to purchase. According to studies, this is exactly where the numbers are collapsing. To avoid customers losing interest hastily, the app must offer clear added value compared to the mobile-optimized website. An appreciation can be formulated, for example, in the form of personalized exclusive offers or discount campaigns that are only available in the app. An integrated branch finder is also a good option.
Only those who manage to offer their customers a rewarding in-app shopping experience will be able to compete successfully in the market. To achieve this, it is necessary to continuously digitize processes and consider the use of new technologies.
Personalized shopping experience – thanks to Artificial Intelligence
Digital technologies such as Artificial Intelligence (AI) and Augmented Reality (AR) are helpful in order to optimize apps, for example with regard to personalization. Thanks to AI, retailers can use data to attract their customers with customized content and offer more relevant purchase recommendations. A Best Practice of successful German online fashion retailer About You shows just how great the potential of AI is: According to media reports, 75 percent of sales generated were accounted for by the mobile app as early as 2018. Afterall, personalization is firmly anchored in the brand core: Based on shopping behavior, the company finds out which brands and styles of influencers match a customer’s taste. This results in an algorithm that customizes what the app displays on the smartphone.
Augmented Reality: Simulate stationary retail experiences
The Swedish furniture group IKEA demonstrated the advantages of Augmented Reality technology very well: In the Ikea Place app, virtual furniture can be transferred to your own home and appropriately placed within the living environment. And there are others following the trend: With its Amazon AR View function, the Amazon app, for example, enables customers to place products from the marketplace virtually in their own four walls. Likewise, fashion and beauty brands rely on simulating stationary retail experiences in the best possible way, for instance with the help of virtual fittings. And this does not only create a special shopping experience – the virtual visit to the fitting room is also intended to reduce returns.
With digital tools such as push notifications, online retailers can further optimize their services: Consumers receive real-time messages about offers, discounts and promotions directly on their smartphone screen.
Conclusion: App-First credo is worthwhile
The future of online commerce lies in mobile commerce: In this context, shopping apps are a relevant trend that retailers are well-advised to take up. However, the key to success is to make ones own app visible with the help of marketing activities. In its survey considering all actively advertising retailers in 2018, Criteo already noted a 30 percent increase in in-app transactions compared to the previous year.
If you want to please your customers, you should provide a convenient, stimulating and secure shopping experience on all relevant channels. A look at China shows that it can be worthwhile to put a primary focus on apps: In the highly digitized country, in-app sales have long been dominating E-Commerce.
You can download the complete report E-Commerce Trends 2020 by divante and KANTAR here free of charge.