E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Retailers that carefully track how consumers use their mobile apps can adapt quickly, improving ROI, argues the CEO of Artisan Mobile.
Data-driven practices have taken over retail marketing. From web sites to television ads to displays at checkout counters, retailers use data to determine what will capture consumers' attention and influence browsing and purchasing habits. While the data-driven approach has grown in popularity, however, there's one area where marketers haven't taken full advantage of the information that's available. Some retailers still view mobile apps through a narrow lens, capturing a limited scope of data, and relying on limited vision to make decisions and refine the app experience.
It's an approach that's unsustainable.
While a percentage of retailers continue to develop apps based on limited insights, another fast-growing segment is leveraging data and A/B testing practices to understand consumer response, quickly update app design, and improve mobile conversion rates. Insight and speed are the two critical success factors. Insight pushes change in the right direction, and speed ensures that app publishers get a return on investment sooner rather than later, and can keep pace with rapidly evolving customer usage.
Arash Hadipanah, senior manager of mobile product at the flash retail company Rue La La, puts it this way, "If you're able to iterate once a week, you get a lot further than iterating once a month."
Maintaining a narrow perspective on mobile app usage, meanwhile, has numerous consequences. For retailers that don’t take advantage of data from mobile interactions, it's impossible to understand how users make decisions within the retail apps they use. That lack of insight means companies can't determine how changes impact performance, or how to improve an app in a way that keeps up with consumer expectations and business requirements.
In short, those retailers using data to inform mobile app development will continue to drive better results. As mobile becomes the center of the consumer's multi-platform universe, it should become the center of the retailer's data collection and analytics strategy as well.
The old model for app design involved putting a bunch of people in a room to discuss the merits of different layouts, features and functions. That, however, was before mobile became a major factor in retailer financial calculations. According to web and mobile measurement firm comScore Inc., consumer spending on mobile devices jumped nearly 25 percent to $5.8 billion in the third quarter of 2013. And that doesn't even include the impact of mobile on purchasing in other channels. Now that mobile means big money, retailers need to be a lot more deliberate and informed in the app design process.
Mobile app user interfaces shouldn't be created in a vacuum. Rather than relying on the opinions of a few, retailers should be designing app user interfaces based on real-world user response. This isn't because companies don't know how to design apps, but because it's impossible to account for everything users will perceive and experience in the real world. Creating an app user interface shouldn't be a guessing game. It should be a well-tested, data-driven and logically defined process.
The only real measure of success for an app is how well it performs. A beautifully designed app doesn't necessarily drive user engagement or mobile conversion rates, which is why companies have to test user response rather than rely on aesthetics. For example, the button to purchase a product may look best at the bottom of an app screen. However, that same placement may not encourage consumers to click to complete the transaction.
Rue La La, which uses Artisan’s app optimization services, has implemented numerous tests to determine how users react to various user interface changes. Some experiments have shown little impact, like the test to see if consumers would behave differently based on which social networking link was offered first in a list of sharing options. It turns out that the order of options doesn't affect sharing behavior. Others tests, however, have been highly valuable.
Rue La La wanted to see if it could encourage users to post more app store reviews by adding a request earlier in the shopping process. Previously the company had only asked customers to review its app after completing a purchase. After scheduling the prompt to show up earlier–after the third time a user activated the app–Rue La La saw an immediate improvement. The shift in timing contributed to a 50% increase in app store reviews after only two weeks. The reviews were also noticeably more positive.
In another test, Rue La La moved a single button, Buy Now, higher up on the app screen. The results were dramatic. The change in placement increased click-through rates by 40-50%.
Only by understanding user response could Rue La La make changes knowing it would improve performance. Testing has proven crucial to the company's app success.
The reality of mobile app testing is that it used to be difficult. Access to useful data was limited, it took time to make even the simplest layout changes, and the mobile channel had minimal impact on retailer earnings anyway.
All of that has changed. There's now an abundance of data on users and usage behavior, making app layout changes is as easy as editing copy on a web site, and the mobile channel is becoming more important to the retail bottom line every day.
In the past few months, Rue La La has ramped up its mobile optimization efforts. "We're developing a test and learn culture," said Hadipanah. "Ideally we'll start running two to three tests for every new release of our app."
Rue may be ahead of many of its competitors in this respect, but the practice of app testing is growing increasingly common.
It's time for retailers who haven't taken advantage of app data and testing opportunities to broaden their perspective. Where mobile apps are concerned, it's time to take on a data-driven approach.
Artisan Mobile offers Artisan Optimize, which enables marketers, retailers and publishers to test and modify iPhone and iPad mobile apps. The service enables companies to conduct A/B tests on various aspects of their apps by delivering different app experiences, such as changes in calls to action or images, to groups of consumers and then seeing which version of the app performs best.