Apps:
A New Wave in The World of Online Shopping
Over the past decade, online shopping has grown beyond a niche market that caters to the most avid consumers. This surge in online shoppers and retailers has been followed by the development of retail mobile apps. In fact, shopping app usage has actually grown faster than usage of any other category of apps. These apps aren’t limited to E-commerce giants such as Nasty Gal and Revolve, however. Well-known brands including Topshop and Forever 21 and even department stores such as Nordstrom have opened up their own apps in both Android and Apple App stores. This dramatic increase in the number of retail apps over the past five years have made ‘mobile malls’ more a regularity than a rarity.  

Why is online shopping becoming more app-based? There appear to be four major factors:

An increase in overall mobile usage

Smartphone traffic now generates more than half of online traffic, which has significantly affected the retail industry. Session times spent on shopping apps have increased by an average of 174% year-over-year, and one report found that 24 major U.S. retailers have seen on average a 45% growth in active app use. Additionally, in the last quarter of 2015, mobile app transactions made up a significant 54% of all mobile transactions.

Visibility

Before Apple created a Shopping category in its App store last fall, shopping apps were buried within the Lifestyle category. Since then, downloads of shopping apps have and continue to expand exponentially. In its first three months, the category has generated around 65 million app downloads in the U.S. alone. This improved access and outreach may have drawn brands and e-commerce marketplaces alike to facilitating app-based transactions.

Problems with Mobile Internet Browsers

Mobile internet browsers tend to be difficult to use when shopping: the screen is smaller, entering details are difficult and switching between tabs is frustrating. Additionally, paying within an app is often much more efficient as apps offer the option to save a preferred payment method for easy repeat entry. The greater ease of browsing and convenience of payment means that customers are much more likely to complete transactions through an app. What’s more, the average order value within an app is $10 more than mobile browser spending.

App-based Benefits

Apps have also become a way for brands to both pinpoint behaviors of new customers and curate experiences for loyal ones. Examples of such benefits include app-exclusive releases, in-store discounts, same-day delivery (offered by Amazon, for example) and app-only sales.

Of course, even as shoppers are spending more time browsing on apps, as of right now, much more money is still spent on desktop. In an interesting attempt to attract more customers to the mobile world, apps like Spring have sprung up (pun intended). Utilizing extremely user-friendly interface with an Instagram-like layout, Spring allows customers to purchase items from more than 1000 brands with a single swipe. Spring, an innovative example of the mobile commerce marketplace, has raised more than $30 million from investors including Thrive Capital and Google Ventures.  The concept itself is fascinating, but its success is yet to be proven. And, in the same way that experts can’t predict Spring’s success or lack thereof, it is all too early to tell whether shopping apps will truly become the future of e-commerce. All we can do now is wait, and perhaps, shop a little while we do.


  • Richard

    I agree. A wise businessman in the Caribbean named Sir Kyffin Simpson always said that the key to success is progression and humility, and clearly he’s done very well for himself as a self made man!

  • John Andrews

    The Airgain IPO launches this week, and they’re a one-brand company.

    Some investors don’t think it’s a good stock though:

    http://seekingalpha.com/article/3997291-risky-signals-antenna-maker-airgain-launches-ipo

  • Cincinnati World Cinema

    Well said, Joe, and worth rereading on a regular basis! Another advantage of small-to-midsize city living is pace and competition. Living in NYC, LA and SF entailed a hectic pace, hallmarked by capital S striving, as one realized there were a ton of others doing what I do. Spending so much time in one’s car in SoCal meant much less time for quality pursuits and pleasures. A smaller pond with relaxed pace allows one to savor life and special moments.


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