E-Commerce Apps Go Head to Head as Technologies Develop at Breakneck Speed and Inflation Bites

As retailers gear up for the holiday shopping season, and digital shopping takes a front seat, it's more important than ever to understand what people are really doing, consuming, searching for and buying in their mobile apps. Accessing comprehensive data about mobile behavior reveals the importance of targeted strategies — especially on these smallest, most personal of screens, and with the disposable income of many having taken a hit thanks to ongoing inflationary pressures.

At a time when the ability to collect mobile data is becoming increasingly challenging due to legislation, privacy concerns and ecosystem restrictions, opt-in, permissioned behavioral data is more important than ever. For example, Measure Protocol’s most recent App Life report showcases this type of zero-party data, revealing, for instance, that, with greater spending power than some younger cohorts, Gen X is making most purchases on Amazon.com. However, this isn’t a blanket truth, as the situation varies wildly from one product category to another. Millennials lead the way in terms of grocery and gourmet food, toys and games, and beauty and personal care purchases, for instance, while Gen Z spent two times more on electronics than this cohort.

The devil is in the details, so to speak, when looking at consumer behavior. Having solid data surrounding mobile app usage, engagement and purchase behavior can help retailers stay a step ahead.

Targeting Consumers According to Demographic

Even for young, mobile Gen Z consumers, Amazon still dominates out of the large retail app players. Yet Temu and Shein are increasingly popular amongst this cohort, too, with recent findings indicating that these apps were being used by around a third of this group (35 percent and 32 percent in the U.S. in July, respectively), with Walmart following at 19 percent. That said, Walmart is very popular among Gen X, with some even preferring it over Amazon.

What is very clear is that there are key differences in shopping behaviors across the generations, which marketers would do well to explore — thereby generating critical insights to hone their strategies in a highly competitive landscape. To do so, in a soon to be cookie-free and increasingly fragmented media ecosystem, marketers need to shift their focus to first-party, zero-party and permissioned data.

Changing Shopper Priorities

The landscape is changing rapidly, in no small part to the shrinking disposable income of many shoppers in an ongoing cost-of-living crisis. Gen Z in particular seems to favor apps which offer low prices, and, according to this piece in CNBC, Temu’s rapid growth could in fact present a threat to Amazon’s dominance. This article states that, since the Chinese shopping app launched in the U.S. a year ago, it has become the No. 1 e-commerce app in the country, with downloads skyrocketing 50x from 600,000 to 30 million in just one quarter, according to Bernstein analysts. In contrast, Amazon’s downloads have fallen 40 percent in a year.

Shein is flying too, with The Wall Street Journal (WSJ) pointing to a potential tie up with Forever 21, and the BBC stating that the retailer is in talks to buy Missguided. Founded in 2008, Shein is already a global giant in the world of fast fashion and next on its agenda, according to the WSJ, are plans to expand its supply chain beyond China. In fact it’s even been suggested that Shein and Temu are changing the face of China’s export machine; making life easier for an army of small businesses.

With the likes of Temu and Shein playing their own game, creating their own rules, and arguably representing Amazon’s greatest challenge, it seems, too, that these retail upstarts may now be looking to expand beyond low prices to fast shipping as well, with Shein reportedly shifting its shipping strategy to bring China-made goods closer to U.S. shoppers.

Meanwhile, in the midst of rising inflation around the world, with consumers often increasingly wary of parting with hard-earned cash, what’s certain is that apps such as these are having major impacts on the e-commerce industry.

Walmart Turns to AI

Of course, the arguably more traditional retail behemoth, Walmart, doesn’t want to lose out. In an innovation and immersion play, it is rolling out virtual cosmetic try-ons, via augmented reality, offering users a way to find the right makeup shade using an iOS app.

Beyond this development, reports suggest that Walmart aims to leverage the latest technologies more widely; to change how we shop forever, delivering smarter, faster, more personalized shopping. For instance, per Fox News, the world’s largest retailer is using artificial intelligence to improve its customer service and change the way we discover and see products — e.g., by harnessing generative AI to create 3D objects from photos of products, which can then be placed on virtual models or in scanned rooms.

Where Leaders Go, Others Follow

When the largest retailer, Walmart, overhauls its entire shopping experience with AI, you can bet others in the retail landscape will follow. But for those retailers looking to increase consumer engagement via engaging digital experiences and apps, it’s abundantly clear that the evolution of mobile shopping is picking up pace. Keeping up is a marathon, not a sprint. And this means, of course, that in less than a year’s time, the behavioral data could be telling a completely different story.

Paul Neto is the co-founder and CMO of Measure Protocol, a company created to help consumers take ownership of their data and address data quality issues for buyers.