Mobile Commerce Engagement Grows As User Acquisition Costs Drop

Dennis Mink, VP of Marketing, Liftoff

Dennis Mink, VP of Marketing, Liftoff

Earlier this week Liftoff released our annual Mobile Shopping Apps report, highlighting the latest trends in mobile user acquisition and app engagement. The good news for ecommerce marketers is that as mobile purchases are on the rise, the cost to acquire new mobile shoppers has declined over the past 12 months.

As we inch ever closer to the holiday shopping season, marketers should take note of several important mobile shopping trends. August and early September is an opportune time to focus on new user acquisition. With mobile ad inventory costs at near lows for the year, marketers can acquire new users cost effectively, just ahead of the holidays. This is also an excellent time to test and optimize ad creative, before inventory costs shoot up. If you wait until October, you’ve already missed the window of opportunity as more competition ramps up spending, driving up costs for everyone.

In-app purchase rates also peak in September, with 7.1% of all new app installs completing a first purchase in a shopping app. Combined with low inventory costs, the August-September time frame is the ideal time for marketers to invest heavily in new user acquisition.

Female shoppers continue to purchase on mobile at a significantly higher rate than men, 8.5% vs 4.5%, suggesting that marketers could benefit from targeting women more so than men.

Looking specifically at Europe, where mobile apps are already by 47% of mobile shoppers over mobile websites, shopping app engagement rates are impressive.

Nearly 11% of all Europeans who install a shopping app will create an account in the app, with 5.3% of all new app installs making a first purchase. While performance of shopping apps in Europe look strong, install-to-purchase rates still trail North America (17.7%) and APAC (8.6%)

Lastly, understanding that there is a wide variation of shopping apps in the AppStore and Google Play, in our analysis we grouped all shopping apps into 3 unique categories: (1)  brand commerce apps, such as Nike and Gap, (2) marketplace apps, including companies like Amazon and eBay, and (3) value-add apps, which offer discounts, coupons or rewards on purchases made in shopping apps. Not surprisingly, we found some notable differences in user acquisition costs and conversion rates.

The biggest finding is that brand commerce apps have a big advantage over marketplace apps, as consumer install, register and purchase in brand commerce apps at a significantly higher rate than they do in marketplace apps (12.3% purchase rate vs 3.8%). The cost to acquire new users who complete a purchase of a brand commerce app are also significantly lower than marketplace apps, $61.90 vs $104. The investment that companies make in building a strong, recognizable brand clearly pays on mobile. Marketers of brand commerce apps would do well in leverage their brand in ad creative, the app store page and throughout the entire purchase funnel.

For additional mobile shopping trends and benchmarks, download the Liftoff 2017 Mobile Shopping Apps Report.

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