Just how effective are retailers’ branded mobile apps in boosting the frequency, quantity, and monetary value of purchases?
According to a new study published in the INFORMS journal Marketing Science, branded mobile apps not only boost sales and purchase frequency on a retailer’s website, but also in its physical stores.
Unnati Narang and Ventakesh Shankar, both of the Mays Business School at Texas A&M University, modeled the relationship between a retailer’s mobile app launch and the frequency, quantity, and monetary value of purchases in its online and offline channels, as well as product returns.
The researchers leveraged data on a large retailer’s launch of a mobile app and used a difference-in-differences approach to see how mobile app adopters differ from nonadopters in their shopping outcomes.
The results of the study revealed:
- App adopters buy 33% more frequently, buy 34% more items, and spend 37% compared to non-adopters in the period after app introduction.
- App adopters return 35% more frequently, 35% more items, and 41% more in dollar value.
- App adopters spend 36% more in net monetary value.
- App adopters’ purchases in both the online and offline channels increase after app launch.
“Overall, we found that retail app users are significantly more engaged at every level of the retail experience, from making purchases to returning items,” said Narang.
“Interestingly, we also found that app users tend to purchase a more diverse set of items, including less popular products, than non-app users. This is particular helpful for long-tail products, such as video games and music.”
“For the retailer, the lesson is that having a retail app will likely increase customer engagement and expand the range of products being sold online and in store,” added Shankar.
“We also found that some app users who make a purchase within 48 hours of actually using an app, tend to use it when they are physically close to the store of purchase. They are most likely to access the app for loyalty rewards, product details and notifications.”
Journal Citation
“Mobile App Introduction and Online and Offline Purchases and Product Returns”
Unnati Narang, Venkatesh Shankar
Marketing Science
Published Online: 29 Aug 2019
DOI: https://doi.org/10.1287/mksc.2019.1169