Retail apps must innovate to provide a better user experience

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Despite a staggering 69% growth in app-based sales between 2014 and 2015, only some retailers are correctly utilizing the user market, according to a recent report by ARC from Applause that measured the average user sentiment for Android and iOS retail apps on a 100-point scale.

The way in which a company navigates the app user experience is key in determining whether users will download and engage with a brand's app. 

By analyzing app store reviews for 43 of the top 50 retailers for which mobile accounted for at least 40% of total 2015 sales, the study found that most retailers still need to improve on app user satisfaction. Despite this, user average user sentiment grew nine points, from 43 in 2014 to around 52 in 2015.  

The study notes that while a seamless user experience is important to user sentimentality, users also judge the capabilities that an app offers compared with competitors' apps. Brands that are seen as more innovative have the effect of negatively impacting brands that aren’t. Moreover, app users are very vocal about their experiences, especially negative ones. Therefore, retailers that want continued m-commerce growth need to offer not only a quality user experience, but also new features regularly.

Here are two apps that were able to capitalize on their app experiences to bolster user satisfaction, and one app that wasn't:

• Groupon's emphasis on the customer's journey resulted in an average user sentiment score of 83, the highest of all retail apps. This app was able to enhance a customer’s journey by giving users control over their experiences, including discovering local deals for food, health and wellness services, and fashion.
• Through continued improvements to its app, Etsy was able to increase user sentimentality from 49 in 2014 to 62 in 2015. On average, Etsy has updated its mobile app every two weeks since June 2015. Additionally, Etsy capitalizes on various engagement tactics, such as in-app seasonal promotions and deals, same-day delivery, and the ability to find local sellers, to draw customers to its app.
• Peapod, a grocery delivery service, fell more than 11 points in 2015. The app's review board is riddled with one- and two-star ratings due to slow-performance, error messages, disruptive ads, limited payment options, and untested app updates. Such negative ratings will likely play a role in determining whether a user downloads an app in the first place, which can result in a massive loss of potential revenue.

 

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile app-install ads that looks at the revenues from app-install ads and how they're expected to grow over the next five years. It also looks at the performance of app-install ads and how these metrics are expected to change over time.

Furthermore, the report examines the top app-install ad products and pricing models offered by the leading advertising platforms, including Facebook, Twitter, Yahoo, and Google, as well as newer app-install formats from Instagram and Snapchat. Looking to the future, the report examines how companies are shifting their app-install ad spend to new formats, as well as the new tools they're using to improve optimization and ad effectiveness.

Here are some key takeaways from the report:

• Mobile app-install ads — ad units that direct users to download a mobile app — are an essential tool for developers, and they account for a major share of mobile ad spend. We estimate 25% of total US mobile ad revenue was generated by app-install ads in 2015.
• A combination of new developers entering the space and rising ad budgets will drive increased spending in years to come. US app-install ad revenue will grow to over $7 billion by year-end 2020, according to BI Intelligence estimates.
• Mobile app install advertisers have traditionally invested heavily in display and interstitial ads, but are moving to mobile video and native install formats. 86% of developers currently use in-feed video app-install ads, and video ads are seen as the most effective app-install format.
• As formats like video rise in popularity, older formats are losing their appeal for install campaigns. Static nonnative ads are widely used but are not seen as effective. Free app networks and offer walls have also fallen out of favor.
• Ad platforms are now developing innovative new install formats to earn even more revenue from these lucrative ad units. New approaches, including deep linking and app streaming, are more contextualized and interactive than older ad formats.

In full, the report:

• Forecasts app-install ad spending in the US through 2020.
• Explores which app-install ad formats developers believe are most effective.
• Discusses what the most popular platforms and ad networks are doing to attract ad spending.
• Investigates new tools for marketing apps, including deep linking and app streaming.

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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the fast-moving world of mobile app-install ads.