Shopping app downloads have surged in the App Store (AAPL, AMZN, WMT)
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Shopping apps have taken root in the iOS App Store in a major way.
Apple debuted the "Shopping" category in the App Store in November in order to help users more easily find retailers' apps, and downloads of the apps within that category have soared since that time, according to Sensor Tower data shared with BI Intelligence, Business Insider's premium research service.
The Shopping category has generated approximately 65 million app downloads in the U.S. in its first three months. This represents more than 4% of the App Store's total downloads in the country in that time.
Amazon is the most downloaded shopping app with 5.7 million downloads in this timeframe. This is 56% more than runner-up Wish, which had 3.6 million downloads. That, in turn, was 82% greater than Walmart, which finished in third place at 1.98 million.
Nancee Halpin, research associate at BI Intelligence, notes that the Shopping section increases the visibility of these mobile retail apps, which had previously been tucked away in the "Lifestyle" section of the App Store that includes dating and nightlife apps, along with smart home devices.
Halpin also points out that the Shopping section could ultimately lead to an increase in sales, as mobile e-commerce customers are more likely to make purchases through a retailer's mobile app than through the mobile web browser, according to Criteo's State of Mobile Commerce Report. The average order value within an app is $102, greater than desktop spending at $100 and mobile browser spending at $92.
The surge in shopping app downloads shows that the way consumers buy products is evolving. Retail apps are starting to become the norm for the everyday consumer, who has benefited from the rise of online and mobile shopping that offers more choice, flexibility, and often better service.
And retailers are shifting their strategies to keep up.
Cooper Smith, senior research analyst at BI Intelligence, Business Insider's premium research service, has compiled a detailed report on new e-commerce strategies that looks at some of the top trends affecting retailers at each stage of the purchase funnel and how they're responding to those shifts.
Here are some of the key takeaways:
- Within digital, consumers are spreading out their retail purchasing across channels, forcing retailers to spread out their online marketing budgets. Paid search, affiliate marketing, and email all increased their share of e-commerce referrals last year, according to Custora.
- Paid search especially stood out as a major source of spending by retailers. Search ad spending grew 18% YoY in Q4 2015, according to IgnitionOne.
- Mobile continues to drive the most sales growth for retailers, but sales still aren't keeping up with retail traffic. IBM found that smartphone traffic beat both tablet and desktop, making up 53% of all online traffic. But mobile still only accounted for 29% of all online sales.
- Retailers only have themselves to blame for underperformance on mobile, as many still aren't using best practices for mobile websites and apps. Only 60% of the top 100 global retailers currently have a dedicated mobile website, according to The Search Agency.
- The increase in online shopping has put stress on the shipping and logistics industry. The number of UPS ground packages delivered on time during the holidays fell from 97% in 2014 to 91% in 2015, according to ShipMatrix.
- Retailers are beginning to explore alternative shipping options. Earlier this year Gilt Groupe switched its primary ground shipper from UPS to Newgistics.
- Retailers that can't afford to invest in alternative shipping options are offering consumers more fulfillment options using what many of them do have — brick-and-mortar stores. Buying online and picking up in-store, also called click and collect, made up about 30% of e-commerce sales at Sam's Club in 2015.
In full, the report:
- Looks at how retailers are shifting their ad spending and marketing efforts to keep up with online retail behavior
- Identifies which channels are top performers for referral traffic and new opportunities for reaching consumers
- Analyzes how retailers are responding to the rise of mobile purchasing and where they're falling short
- Examines the evolving delivery landscape and the aggressive moves retailers are making to become their own shipping carriers
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