For years, the retail industry has been talking about the rise of mobile and how it may disrupt everything.
But according to a new report released today by App Annie — an app analytics and market intelligence company — the future is already here. Mobile, especially in the U.S., has already taken over.
Looking at both online-first and “bricks-and-clicks” retailers, the study shows that, while mobile is affecting everyone, the U.S. is apparently leading the way.
“Most surprising is how well U.S. bricks-and-clicks retailers are doing relative to others outside of the U.S.,” Danielle Levitas, SVP of research and marketing communications at App Annie, told me. “Specifically, across the several countries we looked at in this report, time in apps of bricks-and-clicks was up 40 percent year over year (versus online-first, up 50 percent). However, in the U.S., time spent within bricks-and-clicks apps was up 55 percent versus online-first, up 60 percent. I think this demonstrates more innovation among top US retailers.”
It isn’t all good news for mobile. France has the lowest average number of sessions for bricks-and-clicks apps and saw a decline over the past 12 months. However, with the second-highest growth in sessions for online-first apps, there is a demand here that traditional retailers should take advantage of.
What is next for bricks-and-clicks retailers in the battle to increase loyalty and retain customers?
“Mobile is clearly disrupting bricks-and-clicks retailers — the rules of customer engagement are changing, as is the competitive landscape,” Levitas said. “Fortunately, mobile apps are also an opportunity for bricks-and-clicks retailers to increase customer loyalty, engagement, and spend. Through effective user acquisition and retention strategies — which can and should leverage some combination of paid acquisition, app store optimization (ASO), social shopping, and loyalty/deals programs — retailers retain their best customers and capture more revenue.”
The answer, then, is to find ways to take advantage of precisely what the online-first retailers don’t have.
“Ultimately, bricks-and-clicks retailers have to continue to innovate and leverage the advantage of having physical locations,” Levitas said. “A couple of prime — and innovative — examples are Macy’s piloting IBM Watson’s artificial intelligence for a shopping assistant; Home Depot, and the success of geo-targeted mobile ads to drive foot traffic to stores [and convert that traffic] into purchases; and Target’s ‘cartwheel app’ that drives high engagement and transactions through deals and savings.”
With chatbots on the rise and negating the need to install an app for every retailer, will we see a shift toward using messaging platforms for retail disruption?
“If done well (namely, with contextual and accurate responses), bots could be a great tool for customer service and support within apps,” Levitas said. “Well-executed bots may become effective on ramps for consumers to initially engage a brand (like the mobile web is today). But I believe brands need to have a direct relationship with customers via their apps to deliver optimized experiences, customer intimacy, and better monetization. Bottom line, I don’t believe the A.I. driving bots is good enough not to frustrate most consumers for the foreseeable future.”
Outside of the regular retail apps, one app in Japan is making waves and could prove an interesting competitor in future.
“Mercari — think of an app-first eBay,” Levitas said. “Many haven’t heard of it, but its monthly active users has grown 280 percent to well over a million year-over-year. The company is Japanese and has been incredibly successful in the C2C space in Japan, and, through social (not paid UA), it drove this level of users here in the U.S..”
The full report is available from App Annie today.