For most ecommerce entrepreneurs, building a business is all about optimizing the website, fine-tuning PPC advertising, and relentlessly perfecting email strategy. These are cornerstone tactics when growing an ecommerce business, and countless entrepreneurs have built thriving, profitable businesses using these tools alone.
But there’s one growth avenue that many ecommerce entrepreneurs neglect: mobile apps.
Building a proprietary branded mobile app for your ecommerce business can be one of the most powerful ways to accelerate your growth and develop your business faster.
While mobile apps aren’t for everyone, in cases where they make sense, they’re highly effective in activating your customer base and amplifying revenue for faster growth. Mobile apps can improve everything from store performance and conversion optimization to customer retention—but as I said, they’re not for everyone.
The first step is to figure out if a mobile app makes sense for your business.
Do you need a mobile app for your ecommerce business?
First things first: before even thinking about building an app, you need to do the legwork to find out if it makes sense for your business goals and where you are in the growth of your company.
Mobile apps come with a lot of advantages, but they have drawbacks as well. Development costs for even a simple mobile app can run well over $75,000, and for ecommerce, that number is likely to be much higher—likely in the hundreds of thousands of dollars.
You should also plan to spend about 20 percent of your development costs every year on updates and maintenance for the lifetime of your app. In short, a mobile app is a significant expenditure and you’ll need to spend time evaluating whether the benefits outweigh the costs.
As an ecommerce entrepreneur, here are a few questions you should answer to determine if building a mobile app makes sense for the business:
- Where are you in the business life cycle? Are you still in the early stages, when that development money would be better spent on advertising and growth, or is it time to streamline your store and prepare to scale quickly?
- Are mobile apps right for your core customer demographic? Are you selling to a younger customer pool that would feel more at home in a mobile app, or do you sell to older demographics that might be confused and intimidated by a new and unfamiliar interface?
- Does the potential ROI for a mobile app make sense? For example, let’s say a mobile app increases your average customer lifetime value (LTV) by 40 percent. How long will it take for that difference to cover development expenses and make you a profit?
The important thing is to understand that a mobile app is a tool—nothing more, nothing less. You should understand, at a deep level, why you are building the app, what you want to get from it, and why you think it will advance your overarching business goals.
The advantages of mobile apps for ecommerce businesses
All that said, a mobile app can be a transformative channel for an ecommerce business. Mobile apps are a powerful way to build and engage your customer base, and with the right design, they can help you grow your store and scale your business. Here are a few of the key advantages.
One of the big advantages that an ecommerce mobile app has over a mobile ecommerce website is speed.
More than 40 percent of web traffic today is mobile, which means your website is already curating to mobile customers. An app allows you to improve the customer experience by optimizing the speed of your store.
Mobile apps can store assets like photos locally on the device, meaning they won’t have to call that data from a server and download it each time like a website will. This means apps usually run about 1.5 times as fast as mobile websites, which can translate to improved conversion rates and more revenue for your business.
2. User preference
Another key advantage is that, on the whole, users tend to prefer mobile apps to mobile web browsers.
Across both iOS and Android phones, users spend roughly 86 percent of their time on mobile within mobile apps, and about 51 percent of mobile commerce consumers prefer shopping in an app over a mobile website.
If your business doesn’t have a mobile app, that’s a huge opportunity you’re missing out on. Building a mobile app for your ecommerce store allows you to present your products in the way your customers are accustomed to viewing content, making it easier for customers to buy and likely improving conversion rates.
Again, though, it’s important to qualify this point. Not every customer will prefer an app over a website, and you’ll only reap the benefits of a mobile app if it’s something your customers actually want to use.
For a clothing ecommerce shop selling to millennials, a mobile app probably makes sense. But if you sell primarily to senior citizens, chances are most of your traffic comes from desktop anyways—and a mobile app will simply confuse and put off your customers.
You need to do customer research to find out how your demographic would prefer to engage with your store and provide that experience accordingly.
3. Development of brand loyalty
A mobile app lets you design the user experience from end to end, providing a massive opportunity to build brand loyalty among your customers.
A well-designed mobile app can provide a superlative customer experience, making it simple, easy, and fun to purchase products from your ecommerce store—and whether your brand is sassy and fun or high-class or reserved, you have the opportunity to reinforce your brand with every element of the design. If you can get that design right and build a truly excellent customer experience, you’ll be rewarded with customers that feel a genuine sense of loyalty to you and your business.
This is a double-edged sword, however. A study by Oracle found that 55 percent of millennials said that a poor mobile app experience would limit their likelihood of buying a company’s products and services, so it’s vital to create positive mobile experiences.
The key to doing this is UX research in the form of user testing—you need to test your app as much as possible with real customers to find out what they do and do not want from the mobile experience.
4. Increased retention and reduced customer churn
Mobile apps offer a powerful platform for improving customer retention and limiting churn, helping you to not only attract new customers to your store but to keep them coming back for more.
Three-month mobile user retention for retailers has grown by nearly 10 percent since 2015, and consequently churn dropped the same amount in the same period. This suggests that customer retention on mobile will only improve as more and more users grow accustomed to doing their shopping through mobile apps.
As an entrepreneur, there are things you can do to amplify these benefits even further. Tools like push notifications, personalized offers, and in-app discounts can all bring up retention and incentivize customers to make repeated purchases, especially for their favorite products.
Be careful, though: The same study by Oracle mentioned above found that 56 percent of millennials cited irrelevant push notifications as a nuisance. When you send communications to a customer, they need to be relevant—which brings us to our next point.
5. Personalization opportunities
Personalization is where mobile apps really shine. Building a mobile app for your ecommerce store gives you a new level of opportunity in personalizing the customer experience, letting you build unique offerings down to the level of individual users.
Analytics capabilities on mobile apps are robust, allowing you to track the purchasing and usage habits of individual customers without needing them to log into your store each time they visit.
You can use this data to personalize both the in-app experience and your marketing outreach. By tracking each customer’s purchasing habits, you can personalize your marketing campaigns at a deeply granular level.
For example, instead of running a sale and giving a 10 percent discount off your most popular products, imagine giving each customer 10 percent off their own most-purchased product. In effect, every customer gets their own unique sale offering, helping you to maximize the efficacy and ROI of your sales promotions. And this is just scratching the surface. Personalization is one of the most powerful advantages of a mobile app for ecommerce.
A mobile app has to make sense for your business
The benefits of mobile apps for ecommerce businesses are real—but they don’t apply to all businesses equally. Ultimately, what matters is determining whether or not building a mobile app makes sense for you.
This means taking the time to do the customer research and think through the full implications of development before heading into the design phase. Otherwise, you could waste a lot of time and a lot of money on something that was never a good idea in the first place.
Personally, I would only recommend a mobile app to an ecommerce entrepreneur with a healthy business and revenue stream who wants to hit the gas hard and scale. In the early stages of building your brand and growing your store, building a mobile app is likely a distraction at best—and at worst, it may be a huge waste of resources.
The first priority is always to find your niche, hone your product offering, and establish a consistent, reliable revenue stream from a strong base of core customers. Spend your time and energy doing that before anything else.
But if you have healthy monthly recurring revenue (MRR) and are looking to take your ecommerce business to the next level, a mobile app can be the perfect way to do it. Building a well-designed ecommerce mobile app can help you unlock hidden revenue within your existing customer base by improving customer retention, building brand loyalty, and attracting more customers to your business by improving the mobile experience.
While it’s a big initial investment, it’ll pay off for years—and it could be the key to unlocking your growth potential and scaling a modest ecommerce shop to a growing digital empire.