Consumer behavior tends to change very slowly, but when it does eventually change, the shift can be quite rapid. After several "false dawns" around mobile shopping, the data now shows we're entering a new era. While concerns around the coronavirus have increased the adoption of contactless shopping methods, marketers have also played their part by making "shopping holidays" a near year-round occurrence. Consumers are engaging with their favorite brands and outlets through mobile apps at an increasing rate. In fact, over the past year, digital shopping revenue has grown nearly 5 times faster than in-store sales.
Last year, Liftoff's analysis found that the growth of sales from retail giants like Amazon.com, Flipkart, and Alibaba were tilling the soil for other retailers, priming mobile users to shop year-round. According to this year's annual analysis of mobile app commerce, this trend is continuing — consumers are leaning on mobile apps more than ever. It's never been a better time to be a retail app marketer.
Shopping Apps Enter a ‘Golden Age’
Analyzing more than 53 billion ad impressions across 10 million installs and 2 million first-time events between April 2019 and April 2020, all signs point to a golden age for retail apps. The cost to acquire a user who completes a first purchase has decreased by more than half year-over-year, down to $19.47, while engagement has surged 40 percent. Observe the data over the past two years, and the trend is even more apparent, with purchase engagement up 110 percent.
Furthermore, with COVID-19 driving stay-at-home orders, consumers seem to be turning to mobile apps more readily. While install costs have been relatively stable throughout the year, they dropped to their annual low of $2.48 in March — just as shelter-in-place restrictions peaked.
The takeaway? Every year, users only get more purchase-happy on mobile, and with shelter-in-place, mobile commerce is becoming the new normal. With global uncertainty surrounding the viability of physical stores, retail apps may be a strong investment for retailers looking to drive sales.
North America Takes the Mobile Shopping Lead, APAC is Navigating Shopping Fatigue
While the rise of mobile shopping is a global phenomenon, each region experiences it in different ways. Last year, the mature markets of Asia-Pacific (APAC) and North America showed similar trends — while users were registering more readily for shopping apps, converting them to purchase was a challenge. The data suggested that users in these regions were "window shopping" through mobile apps.
However, this year's data highlights diverging paths between North America and APAC, with North America coming out in front with a mobile commerce renaissance of sorts.
Cost-per-first-purchase in North America is down 4x (to a low $14.85), while conversion rates are up more than 4x — and 6x higher than that of APAC (27.6 percent compared to APAC's 4.7 percent). Meanwhile, APAC costs have nearly doubled in the past year, up to $54.90. Its shopping app landscape may be ripe for a refresh: the region finishes last in engagement worldwide, with purchase rates less than half that of 2019.
Uncertain Times Present a Unique Opportunity
The data doesn't lie: mobile is quickly becoming the first choice for consumers looking to shop, and that trend has been building for years. This is a new time for retailers, and now, even more so, as the world explores efficient, contactless ways to make purchases. Add that to last year's findings that mobile users no longer need the winter holidays as an excuse to buy — they're primed to purchase year-round — and you have a very compelling opportunity for marketers.
We can bet that these uncertain times will present a unique chance for retail apps to succeed, especially as we head toward Black Friday and the traditional holiday shopping season.
Mark Ellis is co-founder and CEO of Liftoff, the leader in performance-driven mobile user acquisition.
Mark Ellis is co-founder and CEO of Liftoff, the leader in performance-driven mobile user acquisition. Under Mark’s leadership, Liftoff has become a trusted partner to mobile-first and Fortune 1000 brands alike, recently recognized as the Stevie American Business Awards’ Fastest-Growing Tech Company of the Year in 2019.
Prior to founding Liftoff, Mark was VP of corporate and business development at Ooyala (acquired by Telstra in 2014) and has also held strategic planning and business development roles at Google and the Walt Disney Company. Mark received an MBA from Harvard Business School, a Masters from Cambridge University and his bachelor’s degree in Political Psychology from Princeton University.