How mobile apps influence consumer spending
written by Robert Feldmar on January 27, 2016
Are you still on the fence regarding the value of B2C mobile applications to businesses? A study conducted by Iowa State University confirms that apps indeed work as revenue boosters.
Published in the Journal of Interactive Marketing, the research led by Su Jung Kim – an assistant professor at the university’s Greenlee School of Journalism and Communication – explored the link between consumer mobile apps and the bottom lines of the companies which provide them to their customers.
The research team examined data related to the most popular interactive features within consumer apps – information lookup activities (such as reviewing purchase history, product details or checking the loyalty point balance) and store location check-ins – to determine their impact on consumer behavior.
Driving sales even without direct purchase option
The result? Even if an app does not include the option to purchase directly products or services it will drive sales, as long as it provides a benefit (a loyalty program, store location information, product overview and availability info, etc.) to the user.
Talking in numbers, those who downloaded a branded app and continued to use it over the course of 3 months increased their spending with the brand by 19 to 48%. The highest percentage growth has been observed with users who utilized the majority of the app feature. Considering that a total of 268 billion applications is expected to be downloaded by the end of 2017 (compared to 179 billion downloads in 2015), it offers a significant opportunity for businesses to grow sales via mobile apps.
The first impression still counts
Apart from the functionality, user comfort and overall first impression continue to be the deciding factors whether people will return to an application regularly.
“We understand the urge of brands wanting to get an app out on the market, but they really need to take caution,” Kim said. “We found that people who stop using the brand mobile app after they download it become disengaged. In terms of purchase behavior, they purchase less frequently and spend less money.”
Testing, testing, testing
Therefore, the rush to get an app out to the store should not eclipse a thorough testing process which ensures the app will run as intended and offer the expected customer experience. Continuous enhancements, maintenance and ensuring that the application is compatible with the latest versions of the mobile OS are key to sustaining customer engagement.
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