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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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Why planning for peak means planning for apps

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Paul Skeldon investigates the implications of peak trading on mobile and discovers how apps could be the answer to managing customers.

MOBILE IS a technology of unforeseen consequences. The rise of the selfie probably could have been predicted, but the fact that the selfie has pretty much killed off the autograph was unforeseen. Likewise, news reaches us from the US that mobile contactless payments is killing any sort of polite intercourse between customers and shop assistants. Again, quite unforeseen.

In retailing there are many unforeseen consequences of mobile. According to research by Tradedoubler, 49% of consumers say they rarely or never buy via their mobile devices. But the research shows that, while 80% prefer to buy on a desktop or laptop, 49% still use their mobile to research the products or services that they buy through other channels.

Shopping on mobile is booming – even if many consumers don’t actually think that they are buying via mobile, they are. With 2.5 million Brits shopping (even if that just means researching) every day, as research by Criteo suggests, you can rest assured that your ‘peak’ is at least going to be spread across online, in-store and mobile platforms. This can help you logistically so long as your website and your mobile site are run on different servers: the traffic will be split.

These days, however, most retailers are opting for adaptive-responsive sites which are essentially served from the same source, so traffic peaks are still going to happen, just the channel is different.

But mobile offers something so much more compelling: apps. “Apps help peak planning by contributing to three main areas: increasing customer profitability, expanding exposure to new customer demographics and adding multichannel effects,” explains Michael Langguth, Co-founder of Poq.

“We are seeing a strong trend of app revenue growth outpacing mobile website growth, indicating that apps are starting to drive a bigger chunk of revenue,” Langguth continues. “When we analysed the 2015 peak trading period, we found that apps generated 2.6 times more revenue per user for a retailer than the mobile site did. This means that if you offer an app, many of your customers will start using it, and many will start spending more money with you than before.”

Apps also have the unlikely extra benefit that they effectively split your traffic. While part of your peak planning revolves around getting your site and its servers ready to handle vast amounts of traffic, getting more consumers on to your app will help manage this traffic: it effectively gives you a whole other channel to divert traffic to.

However, there is another unforeseen consequence here too, as Langguth points out. “It isn’t a question of making a customer choose between the mobile web and the app: both work together in unison. Many shoppers use all channels when shopping, switching between channels at different times of day and in different locations.”

That said, it will help with traffic management at peak times, so long as you can get users to use the app.

APP ADVANTAGE

Another thing that apps bring to the peak trading table is that they widen your net. “An increasing number of shoppers today are app-only or store-and-app-only, meaning that if you don’t offer an app, you simply don’t have exposure to that customer demographic,” says Langguth. “App store optimisation and improvements in web search for apps are starting to become hot topics because they help retailers get access to new, especially younger consumers.”

Ultimately, offering an app means you are providing your customers with an additional channel to shop from. When shoppers can link their account on desktop, mobile web and app, they receive the best possible shopping experience across channels, and it becomes easier for them to spend money with you, rather than with another retailer.

“Especially during peak trading this is super important: additional benefits of apps such as push notifications reminding of discounts, or in-store app features such as barcode scanners, help to significantly improve peak trading results,” says Langguth. “At the end of the day, in retail it’s all about how many touchpoints you can offer a consumer and adding an app means adding a highly engaging and profitable touchpoint.”

We have started to see this in action. Black Friday 2015 proved to be a boon for apps and was the turning point of the app where it moved from something people weren’t really sure of to retail essential.

According to m-commerce platform provider GPShopper app usage and sales were at an all-time high over the 2015 holiday season with traffic, revenue and number of orders increasing up to 392% year-over-year. Furthermore, in-store app usage reached an all-time high, clocking in at five-times the amount of in-store visits typically reported during the holiday.

The figures were born out by Poq, which found that twice as many shoppers were using its apps than the associated m-web site on Black Friday 2015 and that conversion rate on apps was 60% higher than on desktop. At one point on Black Friday 2015, a Poq client was entertaining 12,000 simultaneous apps users.

The increase in app use can be attributed to better experience and to the fact that shoppers were ‘ready to strike’ on Black Friday having prepared the app in advance so they could get the best bargains.

App users were all about efficiency by relying on mobile apps for their in-store navigation tool and shopping checklist too. Popular behaviours included reviewing in-app wish and shopping lists, checking offers and local coupons, checking loyalty specific offers in store and using the app to validate local inventory and pricing with barcode scanning.

Black Friday visits to GPShopper’s client apps increased 353% year-over-year while unique visits increased 172%. The number of orders placed in-app increased 270%, bringing revenue to a 309% increase over last Black Friday.

PEAK CHANNELS

What has begun to emerge though – and what we need to look at more closely this year – is that different peaks seem to invoke different channel usage patterns. While Black Friday 2015 marked the rebirth of the app as a force to be reckoned with, Cyber Monday 2015 belonged to m-web. Activity – while still experiencing year over year increases in visits, revenue and number of orders placed – was outshone by the app activity on Thanksgiving and Black Friday.

Maya Mikhailov, CMO and Co-Founder of GPShopper, explains what she thinks was going on in 2015: “Cyber Monday primarily draws in customers who are just searching for the best deals and will check multiple sites, from less frequently visited retailers, to achieve the most savings. They are driven in through social media and forwarded emails offering bargains. These transient deal-hungry shoppers are eager to buy Cyber Monday, but the challenge for retailers is retaining their loyalty after the mark-down.”

So, what is in store for 2016? You can rest assured that there will be more mobile activity across the board in all the peaks in 2016 and beyond. Since 2015, mobile has largely crossed the 50% of ecomm traffic point for most retailers. We are also likely to see more app use around specific brands such as Amazon and eBay over Black Friday – and the many day run up to it – and Cyber Monday.

We are also likely to see many other retailers start to direct bargain hunters on these peaks to their apps, often with deals or simply the idea that it may actually work better than the web. This will form part of a move towards a greater use of apps for retail through 2017, but will also help many retailers mitigate the huge loads peak trading events have on their networks.
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