How Should Businesses Develop E-Commerce Apps?

Americans spend about one-tenth (10%) of their shopping dollars online, which shows that mobile e-commerce sales are rising quickly.

In 2018, 40% of e-commerce sales came from mobile devices. By 2021, experts expect mobile e-commerce to occupy more than half (54%) of overall e-commerce.

Clutch surveyed 501 shopping app users to learn:

• What types of e-commerce apps people use the most
• What activities people use e-commerce apps for
• Why people use certain e-commerce apps

We found that people most frequently use e-commerce apps from pure online retailers such as Amazon, mass merchant retailers such as Target, and the restaurant industry.

Businesses can use this report to understand how people use e-commerce apps. Then, follow our 6 steps for building shopping apps that match e-commerce app users' preferences:

1. Make shopping apps easy to use to save app users’ time and improve their buying experience
2. Integrate shopping app users’ in-app and in-person experiences
3. Compare metrics to competitors’, not to large pure online retailers
4. Match your shopping app to your business product
5. Avoid using discounts only to attract shopping app users
6. Develop browsable apps

1. Make Shopping Apps Easy to Use to Save App Users' Time and Improve Their Buying Experience

Pure online retailers produce the most popular mobile e-commerce apps, and owe their advantage to quick, simple, and convenient in-app experiences.

Nearly half (42%) of respondents most frequently use pure online retail apps such as Amazon and Overstock. Other frequently used types of apps include mass merchant retailers such as Target and Walmart (28%) and restaurant apps such as McDonald’s and Domino’s (20%).

The mobile apps developed by convenience stores such as 7/11 and Walgreens (6%) and apparel outlets such as Nordstrom, Anthropologie, and Macy’s (4%) are much less frequently used by online shoppers.

Experts praise pure online retail apps’ convenience and ease of use.

“The reason why people are so excited about [pure online retail apps] is the convenience of not having to type in their credit card and address information over and over,” said Alex Levin, founding partner of Levin & Riegner, a digital design and mobile development agency in Brooklyn, N.Y. “If you can boil down buying toilet paper or paper towels to a single click; no one is going to be missing the experience of going to the store.”

While most businesses are not developing mobile apps to replace the in-store experience completely, all businesses with e-commerce apps should provide a seamless and convenient purchasing experience.

To do this, businesses should simply determine how their apps can make a shopping experience better than it was before.

Some businesses fail to improve customers’ shopping experiences because they take shortcuts.

For example, Alan Braun, CEO at Ingage, an interactive content creation startup, said that many smaller businesses make the mistake of creating a mobile app that is simply a copy of their website.

“Mobile is not a website,” Braun said. “Don’t put your website on a mobile device. If you’re going to build a mobile app, there has to be a reason you’re building the mobile app.”

Simply transferring a website designed for desktop browsing to a mobile device will not drastically improve the customer’s shopping experience. Instead, businesses should consult with app developers to create simple and convenient apps.

Businesses must commit to optimizing their shoppers’ time and buying experiences to compete in the e-commerce space.

2. Integrate Shopping App Users’ In-App and In-Person Experiences

Instead of treating traditional and online shopping as separate experiences, forward-thinking retailers combine the in-app and in-store experiences.

People who most frequently use mass merchant retailer apps, convenience store apps, and apparel apps primarily check prices (71%) and make purchases (62%).

Interestingly, more than one-third (34%) of these respondents use shopping apps to reserve items for in-store pickup, and nearly one-quarter (22%) use shopping apps to navigate through the store.

Levin noted that the growth in customers who use mobile apps to facilitate their in-store experience matches the increasingly disjointed way people shop.

“Our purchasing of goods is now so fragmented,” said Levin. “It used to be, ‘I need to go to the store,’ and [brick-and-mortar] mass retailers made sense because you could go and buy everything.”

Now, shoppers want to pick-and-choose their preferred aspects of the in-store buying experience. Going to a store to try on clothing, for example, is still the way many consumers prefer to buy clothes.

So, businesses that sell clothing and apparel could use their app to list both their current clothing inventory and the location of available changing rooms. This way, customers will know if an in-store visit is worth their time, and will be able to find what they are looking for quickly.

Braun believes that physical businesses can attract customers through their app and compete with pure online retailers’ apps by:

• Focusing on in-store navigation
• Integrating Apple Pay, Samsung Play, Google Play, and Contactless Cards

An effective in-store navigation feature tells shoppers what products are in stock and their location in the store. Mobile payment options such as Apple Play ease customers’ concerns about waiting in line and enable fast and easy check-out.

Target, especially, has demonstrated its commitment to mobile pay options and is lauded by experts for its customer experience.

At Target, customers check out by holding mobile devices equipped with mobile payment or contactless credit and debit cards near the card reader.

In late 2017, Target also introduced a Wallet feature in their app. Now, Target shoppers can use Wallet to pay with Target-sponsored credit and debit cards and receive 5% off their purchases. The Wallet feature can also be used to redeem Target gift cards.

Target incorporated its in-store buying and discounts into a mobile app and provides customers a better buying experience.

To provide the best customer experience possible, businesses should integrate the e-commerce and in-store buying experiences.

3. Compare Metrics to Competitors’, Not to Large Pure Online Retailers

People are more likely to use pure online retail apps for nearly all surveyed tasks, including checking prices and making purchases. However, smaller businesses shouldn’t measure the success of their shopping apps by the metrics and sales of pure online retailers. They should instead focus on competing in their niche markets.

Pure online retail app users are likely to:

• Make in-app purchases (90%)
• Check prices (88%)
• Review products (63%)
• Check product availability (63%)

These shopping app habits differ slightly from retail app users, who are likely to:

• Check prices (71%)
• Make in-app purchases (62%)
• Review products (38%)

Meanwhile, more than one-third of pure online retail app users (34%) receive in-app recommendations on similar products, while only 17% of retail app users and 9% of restaurant app users receive such recommendations.

The range of in-app activities being performed by pure online retailers is fueled by the dominance of Amazon, which owns roughly half of the e-commerce market.

“The competition right now is Amazon,” Braun said. “They offer the best prices, the best convenience, the best shipping. It’s just everything in one.”

Experts believe that small and medium businesses developing mobile e-commerce apps should evaluate their business space and avoid making pricing, shipping, and inventory comparisons to a global powerhouse such as Amazon.

Businesses can draw inspiration from the seamless user experience and convenience of pure online retailers’ apps. When it comes to measuring success, though, these businesses should focus on their own specific market while measuring their mobile e-commerce statistics to those of similarly-sized competitors.

4. Match Your Shopping App to Your Business Product

Businesses should always develop e-commerce apps that are appropriate for their specific products.

Restaurant apps have tied the function of their apps to their products particularly well. People most frequently use restaurant apps to make purchases (79%) and view menus (75%), but they're less likely to use restaurant apps to check prices (51%) and reserve items for in-store pickup (43%). Fewer than 1 in 10 (9%) of restaurant app users report getting recommendations on similar products in the app.

Meanwhile, more than one-third (34%) of pure online retail app users most frequently recieve product recommendations.

Mobile e-commerce should be an easier way of getting customers what they want, so restaurant apps should reflect how customers typically engage with the product: by browsing menu items and placing an order.

“Have you ever walked into a McDonald’s and asked for a recommendation?” said Apu Gupta, CEO of Curalate, a mobile and social commerce company. “Honestly, you go into a McDonald’s and you know what you want.”

The stark statistical difference between the 9% of restaurant apps users who receive in-app product recommendations and the 34% of pure online retail app users who do demonstrates how consumers use shopping apps in ways that best suit the available products.

People browsing the internet for clothing or apparel may enjoy receiving targeted in-app recommendations on similar products. However, a single customer using a restaurant app probably only needs to order one kind of meal at a time, and will be less likely to engage with in-app recommendations.

Businesses should consider how their products are consumed and which features will best support their users’ purchasing experiences.

5. Avoid Using Discounts Only to Attract Shopping App Users

While offering exclusive deals and offers to customers may seem like a logical way of quickly improving sales or downloads, experts warn businesses that simply offering a digital coupon book could draw them into an unwinnable and unproductive price war.

Two-thirds of consumers (65%) use mobile apps to receive deals and offers that are only available in the app.

Experts believe that this user behavior makes it difficult for apps to turn a profit and remain relevant in users’ day-to-day lives.

“If I were a retailer, I would not feel good about seeing [that most consumers use mobile apps to receive exclusive deals and offers in the app],” said Levin. “You’re in a price war with everybody else rather than trying to compete on experience…[or create] a meaningful connection with your customers.”

While offering discounts can initially motivate people to download an app, it does not provide a sustainable mobile app strategy for businesses. App users may flee once the discount disappears.

“What happens when the [in-app] experience isn’t great?” said Levin. “Or when your prices still aren’t beating everybody else’s; or real estate prices go up and you actually can’t offer [that deal] anymore, and you’re no longer making money?”

Businesses that primarily incentivize consumers to download their app by offering discounts face a significant complication: People are increasingly disinterested in downloading and keeping new apps as their smartphones become cluttered.

Braun, who previously helped Fortune 1000 companies build effective mobile apps as the head of worldwide enterprise developer strategy at Apple, offers this anecdote to businesses.

“We used to say at Apple, when you hold down the app and they jiggle, they jiggle because they’re scared you’re going to delete them,” Braun said. “People will download your app and if it’s not helping them do something better, faster, quicker, they’re going to delete [the app] 10 seconds after they install it.”

Therefore, businesses in the midst of app development should remember that even if shoppers download an app for a specific purchase, they will not necessarily keep the app on their phone.

Exclusive in-app deals and offers may attract initial interest, but are unlikely to provide businesses a strong return on investment.

6. Develop Browsable Apps

Businesses should emphasize developing interactive, browsable apps that encourage shoppers to spend time and money exploring new products.

Consumers may say that they most frequently use apps to cash in on exclusive discounts, but their actual behavior involves online window shopping and learning about new products.

A majority of consumers still use e-commerce apps to compare products and prices from different retailers (54%) and to have the flexibility to buy products at any time (54%).

iOS developers and Android developers must remember that the possibility of an unexpected find is still something customers value.

“People often forget shopping has never been only about buying the things you know you want,” Gupta said. “A big reason people shop is for the thrill of the find.”

For example, clothing brand Forever 21 has developed an interactive, browsable, and exciting app that lends itself to window shopping and finding new products.

Forever 21’s app offers discounts but is strengthened by also offering simple design, stylish product photos, and voice-accessible browsing options.

Forever 21 allows shoppers to find what they need quickly and discover new products.

Businesses that develop browsable apps that allow for the "thrill of the find" will earn a higher return on their investment.

Businesses Should Develop Effective and User-Friendly Shopping Apps

Businesses should develop e-commerce mobile apps that provide the best experience possible for customers. To do this, businesses must consider customers’ motivations for using e-commerce apps: how likely they are to engage with particular brands' apps and how they use the apps to interact with products.

Consumers most frequently use apps from pure online retailers (42%), mass merchant retailers (28%), and restaurants (20%). Online shoppers are most likely to make purchases, check prices, review products, and check product availability on mobile apps.

While a majority of e-commerce mobile app shoppers say they use their preferred apps to receive exclusive deals and offers, experts caution businesses to design interactive, browsable, efficient, and product-sensitive mobile apps for sustainable growth.

With an understanding of both users’ preferences and the potential challenges of e-commerce app development, businesses can effectively develop and maintain e-commerce apps.