It's been nearly two years since mobile usage surpassed desktop, but many retailers are still struggling to find their place in the mobile world, contemplating which path to take: mobile web, mobile app, or both.
In 2015, the general consensus was that retail dollars were in mobile web, not mobile apps, with Moovweb, for example, claiming that only established leaders with big reach (Target, Amazon, Walmart) could get enough app usage to outpace revenue from their mobile sites.
This year, however, experts like Localytics are swearing by the power of mobile apps, highlighting the $6M that Starbucks closed in mobile order app revenue in Q1 2016. In fact, Criteo recently reported that, in comparison to mobile web users, app users are twice as likely to return and three times as likely to convert.
Today, a large chunk of retail brands has expanded into mobile, but few have really invested in utilizing the unique capabilities of mobile to engage users on their smartphones. Most are stuck in intermediary phases -- they've developed a full-fledged app or mobile site, but offer nothing more than standard features, nothing to pull users in and get them excited. Often, mobile woes lie in attempting to create a consistent customer experience in both the digital and real worlds, leaving retailers hesitant to create bold mobile apps.
But for all its initial growing pains, mobile commerce is here to stay, with reports showing it surpassing desktop purchases for the first time ever in the first half of 2016.
Below are three examples of retailers with successful mobile app strategies that are driving not only downloads, but measurable consumer engagement as well. Instead of mimicking strategies from their other channels, these retailers each leverage the specific capabilities of the mobile medium to build innovative user experiences.
1. Chick-fil-A One: Use app promotions to increase offline presence
In June 2016, Chick-fil-A launched its mobile app "Chick-fil-A One." In 11 days, it was downloaded nearly 3.4M times.
The app enables customers to order and pay for their food in advance, letting them skip the notoriously long lines, and pick up their meal at a counter designated for online orders. It also lets consumers customize their meals according to their tastes. Lactose intolerant? Trying out a gluten-free diet? Chick-fil-A promised to take care of it all.
But the mobile payment feature wasn't the only reason why the new mobile app blew up. Chick-fil-A offered free chicken sandwiches to anyone who downloaded the app between June 1 and June 11. What a promotion.
If users missed the window, it didn't necessarily mean they missed out on the chance to get free food. The app tracks your orders over time, and once you hit a certain amount, Chick-fil-A rewards you with a free "treat."
It's no surprise that Chick-fil-A One exploded, considering that 60 percent of consumers would adopt mobile payments if offered coupons and 39 percent of consumers spend more if they receive a personalized mobile coupon, according to Koupon.
Chick-fil-A One, along with Starbucks and a few others, are pioneers in this sort of mobile app strategy, capitalizing on consumers' hunger for mobile coupons as a means to drive installs, and gain the kind of market share that can be the basis in turn for driving revenue from user engagement. Before Chick-fil-A One, according to SurveyMonkey, a majority of top downloaded apps were pushed by viral flows (text message invites or email invites), word of mouth messaging (games), big brands (Facebook, Snapchat), or paid advertising campaigns.
Now, Chick-fil-A One has about 6.6M monthly unique users, and can send push notifications and promotion codes to a large user base whenever it'd like. Think about the kind of retention and revenue that sort of reach brings.
2. Sephora to Go: Provide consumers with value to keep them coming back
In February 2016, Sephora updated its mobile app Sephora to Go, adding beacons, augmented reality, and even a virtual assistant makeup artist.
In addition to features like shopping on the go, scanning products, adding to wishlists, rewards programs, getting personalized recommendations, and push notifications, all of which are standard choices, Sephora to Go offers its makeup consumers the best reasons to keep coming back: additional, valuable content worth checking in for. The app offers step-by-step makeup tutorials, new makeup techniques, expert advice, shopping lists, and a virtual artist that lets you try on 3,000 different lip colors.
This is extremely valuable to Sephora's target audience, who, according to data from the company, buy the wrong color of foundation seven times before finding the right one. Instead of wasting hundreds of dollars on makeup they'll never use again, consumers can use the augmented reality app to try dozens of colors before they buy -- a previously unimaginable opportunity -- to ensure they get it right the first time.
The feature works like Snapchat filters, letting users watch their face move on the screen so they can see their lipstick colors in all angles. In addition to developing a fun, engaging app, Sephora was sure to provide its consumers with high value they'll continue to appreciate, and critically, will re-engage with through the app.
Users can also share the virtual artist images with friends, too, adding an element of virality to the mobile app.
The makeup tutorials and advice positions Sephora to Go as a resource in addition to a shopping app, building additional brand value. Even users, who might be unable to afford Sephora products at this point in time, will continue using the app to learn new makeup techniques, and likely convert later in the game. This builds loyalty and brand awareness, both of which are important precursors to a thriving retail brand.
In 2015, the makeup giant's mobile sales hit $73.6M. Its sales via mobile devices grew 60 percent that year and today make up 26 percent of Sephora's digital sales, according to Internet Retailer.
3. Nordstrom: Use the convenience of mobile to drive in-store purchases
In October 2016, Nordstrom added a new feature to its app called "Reserve & Try In Store," which as of today is only available in Western Washington locations.
The convenience of online ordering motivates consumers to take advantage of ecommerce. It's common, especially in larger department stores such as Nordstrom, for consumers shopping online to order a few different sizes and colors of the same clothing item, hoping that one of them ends up fitting right. By marrying the convenience of online browsing with the in-store shopping experience, Nordstrom is quietly building brick and mortar foot traffic.
This creative feature is the latest in Nordstrom's effort to bridge the gap between in-store shopping and mobile commerce. First, users find an item they'd like to try. Then, they tap "Reserve & Try," fill in their contact information, and book a reservation appointment for whatever time fits their schedules. Once it's time, the users visit the Nordstrom store, and walk in to find their name on the door of a fitting room that's filled with the items they pre-ordered that morning.
No payment is required at all. It's just as convenient for users to order items to try on in the store for no pay than to order them to their homes for hundreds of dollars. Nordstrom hopes that more of its shoppers will choose the Reserve & Try option. Once users are in-store, Nordstrom can also use the app to send beacon notifications and relevant push promotions to interest them in purchasing additional or complementary items.
In Q2 2016, Nordstrom reported strong mobile engagement, which is beginning to outpace desktop sales. In fact, total sales for Nordstrom.com grew 9.4 percent this year, reaching $683M. Its refocused mobile strategy is at the heart of this year's high earnings.
Looking in general at the retail mobile space, we see a clear trend of increasingly unique in-app consumer experiences. McDonald's, for example, has developed a children's-oriented app that brings Happy Meal toys to life, in addition to its flagship McDonald's app. Moving forward we can expect to see innovative in-app experiences become an important complement to fully-integrated plans across offline, online, mobile, web and in-app.