App Metrics Retailers Need for Success
Brick-and-mortar retail isn't dead, but the rules have changed. Digital commerce has disrupted the entire industry, and mobile apps are at the center of that change. The average annual growth of e-commerce has increased to $40 billion over the past three years, with mobile driving 44 percent of retailers’ online traffic. This totals to 31 percent of all online sales in 2016. In the United States alone, users spent 1.2 billion hours in shopping apps in 2016, up 30 percent year-over-year. As traditional brick-and-mortar retailers face increasing digital competition, apps offer a way to bridge the online and offline worlds for consumers. In order to survive in this space, it's imperative to understand and track the key metrics that matter for mobile apps.
Here's a selection of the top metrics to measure for retail apps:
- To determine consumer engagement, analyze time spent in-app. Time spent in-app tracks how long a user was in your app over a period of time. This allows retailers to determine whether users are deriving value from app content and features. Furthermore, time spent in-app can indicate overall consumer satisfaction — consumers won’t spend time engaging with an app they don’t enjoy.
- To pinpoint likelihood to purchase, assess average sessions per user. Sessions per user over a given period of time will indicate how frequently potential buyers are revisiting your app. High sessions per user may indicate brand loyalty via repeat purchases. When coupled with time spent, this could indicate users engaging in browsing behavior that could lead to increased basket size. However, if users are frequently visiting a retail app but not completing purchases, this could signal inefficiencies in user flow or app features that need revamping in order to better aid the path to purchase.
- To assess customer lifetime value, review various conversion rates. For retailers, the primary objective of an app is to drive conversions. Therefore, it’s imperative that retailers track conversion rates in order to take steps toward meeting business goals. While the first measurable conversion is downloads, true retail app conversions happen in-app, whether as purchases or a high-intent step like signing up for a loyalty program, promotion notices or newsletter. Retailers need to focus on insights that indicate customer lifetime value, which results in a consistent stream of revenue from loyal, repeat customers.
- To acquire new users, assess cross-app usage. Evaluate cross-app usage to understand which other apps consumers are using. This may reveal consumer demographics and interests, which will help retailers build engaging content. Apps with high cross-app usage may also present opportunities to reach a mutual consumer via partnerships or targeted user acquisition efforts.
- To build loyal users, focus on retention rate. Similar to how repeat customers indicate success for brick-and-mortar stores, retention rates for retail apps indicate how many visitors have chosen to return to your app. High retention rates also means low churn, which indicates engaging, relevant content for the consumer and high purchase value. Benchmarking your Day 1, Day 7 and Day 30 retention rates against competitors can indicate if your app is over- or underperforming. Coupled with user reviews, this could signal what changes you need to make in order to keep your users engaged and encouraged to make a purchase.
A brick-and-mortar strategy alone will no longer equal success. Mobile apps present an incredible opportunity for brands to engage with consumers and ultimately drive revenue. Closely measuring the app metrics that matter will allow retailers to take actionable steps to thrive in this new retail environment.
Lexi Sydow is the senior insights analyst at App Annie, an app analytics and app market data firm.