What’s Working - And Not - In Mobile Commerce (Part 1 Of 2)

Mobile apps will always be a subset of a brand’s web users. But they’re more affluent, they convert better, they spend more, and they’re often a brand’s most loyal customers. In other words, they deserve a premium experience. This may not sound controversial when Matt Hudson, Co-founder and CEO of BILDIT, a mobile app development firm, explains it. 

But for brands thinking about their mobile execution, Ricky Ranjan, Director of Global Partnerships for Digital Platforms at PayPalPYPL, explains what it all means in terms of critical dependencies and implementation: “Native apps are built for a specific platform, such as iOS or Android, and can leverage the functionality core to those platforms.” It requires brands to do custom work for each platform. Here, BILDIT explains why, despite the development time and cost required, native apps are superior to non-native apps; while the latter work across platforms, they require their code to be translated for each device, thereby degrading the user experience. 

Ranjan underscores that user experience is the most important component of building an app and urges brands to align on the key purpose of the app and what it’s trying to solve. Why? He cautions that because most users have 6-10 active apps on their phones, building an app that will be downloaded and used actively by users is challenging and requires merchants to focus on clear benefits and pain points it addresses.

Native apps can be a significant investment for a merchant and ensuring they have the right services and offering when they build a native app is usually the first step, says Ranjan. Merchants with an existing physical retail network or large member base can focus on building out buy-online-pickup-in-store and loyalty experiences as a precursor to building a native app.

Part of optimizing the app experience includes introducing wallets such as PayPal, Apple Pay and GoogleGOOG Pay to help increase conversion. “Conversion rates on mobile devices themselves continue to lag those of desktop — consumers spend 60 percent of their online shopping time on mobile, but only 16 percent of shopping transactions are occurring on a smartphone,” says Ranjan. This is mainly because the mobile checkout experience for many merchants is still clunky, the study he references reports. 

In acknowledging that companies may not build native apps due to cost, Hudson explains why supporting both iOS and Android is expensive: An average mobile engineer costs 34 percent more than a web engineer. In Hudson’s experience, these engineers are also harder to find, as many college students learn web engineering, whereas mobile engineering is usually a space into which senior engineers move after they have experience on web.

And while building a mobile app is expensive, it launches with zero users and doesn’t achieve a significant return on investment until there’s a large number of downloads. Further, most marketing sends traffic to a web site, which makes driving app downloads more challenging. Further, Hudson finds that mobile app install campaigns are expensive.

Despite the challenges and risks, Ranjan underscores that mobile continues to be a huge opportunity, with mobile commerce sales expected to be more than 40 percent of total retail purchases this year. The second part of this deep dive will address native app alternatives, feasible ways to build apps, whether brands needs apps, and what metrics of success to evaluate if they do build one.

This article was originally published by Forbes on 4/28/23.