Consumer Behavior on E-commerce. Mobile Apps

Transcription

1 Consumer Behavior on E-commerce Mobile Apps June 2016

2 Introduction 3 Highlights 4 Methodology 5 Attention spans are waning 6 Re-engagement is a must 8 Taxi 9 Food delivery 10 Classifieds 11 Travel 12 Fashion 13 Push and are not enough 14 Conversion rates for display 16 Most engaging campaign type 17 Conclusion 18 About us 19

3 INTRODUCTION It s no secret that mobile is taking over. We ve seen countless reports that mobile devices, usage, and in-app purchases are growing. However, what we re also seeing is, as more consumers are becoming accustomed to ondemand media, the mindset and attention span of today s generation is also shifting. Despite the massive growth in mobile, it s becoming more difficult for businesses to attract and keep loyal customers. In a rapid on-the-go world, e-commerce mobile apps are specifically at jeopardy because these businesses are competing for the same media attention that consumers are spending on other apps like Facebook, Snapchat, Twitter and games. In this latest report, we tap into the latest consumer trends on e-commerce mobile apps. Using data from the Jampp advertising platform, the report uncovers consumer behavior insights across different e-commerce verticals on mobile apps. Jampp helps mobile app marketers acquire and engage users with performance advertising. With access to thousands of ad campaigns across a number of industries, we have aggregated data from our platform that enables us to lift the lid on user post-install user behavior to drive purchases. 3

4 HIGHLIGHTS Based on our analysis of Q1 2016, we re seeing the following trends Up to 88% decrease in consumers attention span year over year As much as a 35% decrease in average app session length quarter over quarter For e-commerce apps specifically, we re seeing certain category trends with consumers 70% of conversions for e-commerce apps occur within the first 14 days after install Taxi apps have the shortest latency period of 4 days to drive 80% of conversions Fashion apps have the longest latency period of 31 days to drive 90% of conversions Retargeting campaigns drive twice as many conversions as user acquisition campaigns 88% decrease in user attention spans in the past year 4

5 METHODOLOGY The data from this report was gathered from Q1 2016, referencing aggregate data from Android and ios apps that are used for shopping or e- commerce activities across the Jampp advertising platform. Tier 1 regional data includes data from the United States, United Kingdom, Germany, Spain, and France. Tier 2 regional data includes data from the Middle East, Southeast Asia, and Latin America. In total, hundreds of apps and their associated monetization events have been analyzed and aggregated to produce this data. The data does not reflect the usage pattern of any single app on the Jampp platform. In addition, supporting data points are provided by adjust, Apsalar, and Localytics. The data from these companies is based on the Android and ios shopping or e-commerce apps within their respective measurement footprints. 5

6 ATTENTION SPANS ARE WANING Based on our partner data, we re seeing a significant decline in average session length for e-commerce apps. 80 Average session length in seconds /1/15 2/1/15 3/1/15 4/1/15 5/1/15 6/1/15 7/1/15 8/1/15 9/1/15 10/1/15 11/1/15 12/1/15 1/1/16 2/1/16 3/1/16 Average session length in seconds (ios) /1/15 2/1/15 3/1/15 4/1/15 5/1/15 6/1/15 7/1/15 8/1/15 9/1/15 10/1/15 11/1/15 12/1/15 1/1/16 2/1/16 3/1/16 6

7 For e-commerce apps specifically, it s safe to assume that the less users are exposed to a company s products, the less likely they are to make a purchase. For example, it s highly unlikely a user will purchase a product if she or he opens the app but browses for less than 5 seconds. Therefore, given the decline in user session length, we can assume that consumers are either making purchasing decisions faster or they are getting distracted and losing focus during the purchasing funnel. If we assume the latter, this means apps are missing out on opportunities to make more revenue from each user. As the mobile app market matures, marketers have more challenges to drive revenue, especially in the competitive e-commerce vertical. If app marketers could somehow encourage consumers to spend more time in the right places within the app, it is likely that they would boost purchases. In the next section, we uncover consumer behavior for specific categories in e-commerce apps and datadriven marketing strategies to re-engage users. 7

8 RE-ENGAGEMENT IS A MUST It is important to note that each e-commerce app category has different purchasing funnels. For example, the decision making process to book a taxi differs from the decision making process to book a hotel. This is why we divided the e-commerce vertical into the following app categories for this study: taxi, food delivery, classifieds, travel, and fashion apps. We analyzed the most engaged users, those who purchased, to understand what they had in common. In this section, we ll review each category s specific window of opportunity to re-engage with users. As we can see here, user behavior will respond differently by app category. The chart below shows the percentage of app users that convert on the first day of installing the app. This study was based on new user data in Q and these metrics were calculated using conversions that occurred over a 60 day period after install. The data reflected in these charts include organic user behavior data, and is not inflated by users that have been retargeted. 75% 70% First conversions that occur on install date 65% 50% 55% 45% 25% 35% 0% Taxi Food Delivery Classifieds Travel Fashion Note: Q data from Android and ios apps used for shopping or e-commerce activities across the Jampp advertising platform Source: Jampp, Consumer Behavior on E-commerce Mobile Apps, June

9 TAXI Upon installing a taxi app, 70% of conversions occur in the first day, while 80% purchases will occur within 4 days. 80% First purchases after install on taxi apps by day 60% 40% 20% 70% first conversions on first day 0% D0 D1 D3 D4 D5 D6 D7 D8 D9 D10 Note: Q data from Android and ios apps used for taxi or ride sharing activities across the Jampp advertising platform Source: Jampp, Consumer Behavior on E-commerce Mobile Apps, June 2016 As more time passes, there are incremental conversions that occur between day 4 and 14 that will drive roughly 10% more conversions. However, if a user has had the app for more than 14 days and still hasn t converted, the likelihood that he will after 14 days is slim. Therefore, in order to maximize conversions early on, it s best to retarget users in this category with ads within the first 14 days after they download. In fact, in Tier 1 countries, 90% of first conversions occur 3 days earlier than users in Tier 2 countries. As for retention, users that complete 3 rides within the first 7 days after install are 204% more likely to be a loyal customer that opens the app every day. 9

10 FOOD DELIVERY After installing a food delivery app, 65% of customers will purchase on the same day they install the app. 80% First purchases after install on food delivery apps by day 60% 40% 70% first conversions in 3 days 20% 0% D0 D1 D3 D4 D5 D6 D7 D8 D9 D10 Note: Q data from Android and ios apps used for food delivery activities across the Jampp advertising platform Source: Jampp, Consumer Behavior on E-commerce Mobile Apps, June 2016 After 9 days of having the app installed, 80% of conversions will occur and by day 21, conversions will reach a peak at 90%. Similar to taxi apps, food delivery apps have a shorter period of time before first conversions for users in Tier 1 countries. There are on average 10% more first conversions in Tier 1 countries compared to Tier 2 countries on the first day the app is installed, while 90% of first conversions will occur 4 days earlier than Tier 2 countries. On the retention side, users that complete 4 orders within the first 7 days after the install are 308% more likely to be a loyal user, defined as someone that opens it daily. 10

11 CLASSIFIEDS For the classifieds category, there are two types of conversions: one for users that create a post and one for users that make a purchase. For this study, we looked at conversions that resulted in a user post, as most advertisers are in need of sellers before they can promote items to buyers. 60% First purchases after install on classified apps by day 45% 30% 15% 70% first conversions in 3 days 0% D0 D1 D3 D4 D5 D6 D7 D8 D9 D10 Note: Q data from Android and ios apps used for posting new and used goods from consumers across the Jampp advertising platform Source: Jampp, Consumer Behavior on E-commerce Mobile Apps, June 2016 We see here that 55% of posts will occur on the first day of installing the app, with incremental engagement over 20 days. 3 days drives 70% of conversions 9 days drives 80% of conversions 20 days drives 90% of conversions Similar to taxi and food delivery apps, there s a short window of 3 to 9 days to maximize conversions in the Classifieds category. Additionally, users that complete 3 posting actions within the first 7 days after install are 181% more likely to be a open the app daily. 11

12 TRAVEL Travel consumers are likely a bit more calculated in their purchases, as only 45% of the first hotel and flight bookings are made on the first day of an install. 50% First purchases after install on travel apps by day 40% 30% 20% 70% first conversions in 8 days 10% 0% D0 D1 D2 D3 D4 D5 D6 D7 D8 D9 D10 Note: Q data from Android and ios apps used for booking travel, hotel or car rentals across the Jampp advertising platform Source: Jampp, Consumer Behavior on E-commerce Mobile Apps, June 2016 Day 8 and 15 will reflect 70% and 80% of the first purchases, respectively, while it takes 26 days to drive 90% of the conversions. This gives marketers a little more breathing room to wiggle in more re-engagement tactics towards these users, but conversions will still taper off within the first 30 days of installing the app. Because these consumers take longer to make a purchase, people who view 3 or more flight or hotel offers are 195% more likely to convert compared to other users. 12

13 FASHION The fashion apps have the longest latency period with 90% of first conversions occurring within 31 days. 40% First purchases after install on fashion apps by day 30% 20% 70% first conversions in 14 days 10% 0% D0 D1 D3 D4 D5 D6 D7 D8 D9 D10 Note: Q data from Android and ios apps used for selling fashion or wearable items across the Jampp advertising platform Source: Jampp, Consumer Behavior on E-commerce Mobile Apps, June 2016 For fashion apps, there s a greater tail end and therefore a longer window of opportunity to re-engage users as only 35% of first conversions will occur on the first day of installing the app. Similar to travel apps, these consumers take longer to make a purchase, so we ve identified trends in early consumer behavior to predict purchase behavior. We found that users that view 3 or more products are 177% more likely to convert compared to other users. 13

14 PUSH & ARE NOT ENOUGH When re-engaging users, many mobile app marketers rely on campaigns and push notifications to nurture their users to purchase. However, not all push notifications are well-received. 2% 26% 20% 52% They are an annoying distraction Grateful; they alert me to things I am interested in Productivity-enhancing; they relay important/timely information that doesn't require me launching the app Other November 2015, What s more, 83% of e-commerce s are not opened, according to MailChimp. This tells us that despite these strategies, a holistic marketing plan should include a number of cross-channel campaigns such as , push notifications, loyalty programs, and retargeting ads which are a key strategy to reach users. Unlike push notifications that may be delivered when the user is busy or s that are competing with hundreds of other marketing messages, app retargeting ads are strategically shown when a user is leisurely using their mobile device. Whether they re between articles in a news feed or after a level completion in a casual game, mobile display ads are not intrusive. They perform because they remind users to go back to the point where they were when they last used the app. 14

15 In this example here, the mobile ad occupies the entire real estate of the mobile screen and is displayed in a user s news feed. 15

16 CONVERSION RATES FOR DISPLAY Not every user has the same value, and therefore, ad budgets should be allocated accordingly. Based on our recent study, we can see that advertisers are driving more conversions when focusing ad budgets on existing users rather than new users. The below chart aggregates conversion rates for both ios and Android devices in the first quarter of % Conversion rate by campaign type User Acquisition Retargeting Ads 2% 1% 0% 12/31/15 1/7/16 1/14/16 1/21/16 1/28/16 2/4/16 2/11/16 2/18/16 2/25/16 3/3/16 3/10/16 3/17/16 3/24/16 Note: Q data from Android and ios apps used for shopping or e-commerce activities across the Jampp advertising platform Source: Jampp, Consumer Behavior on E-commerce Mobile Apps, June 2016 We can see that retargeting ads are at least twice as productive compared to acquisition campaigns, but advertiser budgets and organizations are still pouring money into acquiring new users. Based on these findings, we highly recommend allocating some of the user acquisition budget towards retargeting campaigns. A combination of user acquisition and data-driven retargeting campaigns always yields the best results to drive more purchases and overall revenue, maximizing the lifetime value of each user even after they ve installed the app. 16

17 MOST ENGAGING CAMPAIGN TYPE When running retargeting campaigns, personalized ad experiences will drive performance. However, creating hyper relevant ads for users may not always be scalable for advertisers if an app has over 100 product SKUs. At Jampp, we support Dynamic Product Ads (DPAs) to ensure advertisers can scale their ad efforts with the most relevant and up-to-date information for the user, without having to create it manually. Based on early results, we re already seeing a 6x improvement in clickthrough rates with DPA campaigns over standard retargeting campaigns. 10% CTR by campaign type 8% 6% 4% Standard Retargeting Dynamic Product Ads 2% 0% 12/31/2015 1/7/2016 1/14/2016 1/21/2016 1/28/2016 2/4/2016 2/11/2016 2/18/2016 2/25/2016 3/3/2016 3/10/2016 3/17/2016 3/24/2016 Note: Q data from Android and ios apps used for shopping or e-commerce activities across the Jampp advertising platform Source: Jampp, Consumer Behavior on E-commerce Mobile Apps, June

18 CONCLUSION Capturing attention from users and driving them back to an app is an ongoing struggle for mobile businesses. These trends stress the importance of being smart about your resources and where to invest marketing budgets. Engagement is becoming a real concern for mobile apps, and as businesses diversify product lines, update pricing, or add limited-time promotions, syndicating this messaging will become even more time-consuming and harder to scale on traditional and push notification strategies. In terms of low hanging fruit, there is a significant opportunity to drive more purchases with Dynamic Product Ads for both the travel and fashion verticals. In addition, marketers should focus their ad budgets around retargeting for taxi and food delivery apps because our data suggests that an install will likely drive a first conversions on day 1, but driving recurring purchases is challenging. As with any vertical, the sales cycle will vary and the customer lifetime value will differ. For more information on segmenting your user data, creating custom audience lists for retargeting, or driving traffic and conversions with Dynamic Product Ads, contact us at jampp.com 18

19 ABOUT US Jampp The mobile app economy runs on Jampp. Jampp helps mobile app marketers acquire and engage users with performance advertising outside of Facebook. Built for scale and efficiency, the marketing platform automatically analyzes data to make real-time bidding decisions on hundreds of traffic sources. The technology dynamically creates user segments and customized ads to maximize in-app activity. With offices in San Francisco, London, Berlin, Buenos Aires, Sao Paulo, and Cape Town, Jampp is trusted by the world s leading e-commerce apps. For more information, visit jampp.com. For this report, we partnered with adjust, Apsalar, and Localytics for supporting mobile app trends. adjust adjust is a business intelligence platform for mobile apps that provides high-quality analytics and attribution solutions for companies worldwide. With adjust s open source SDK, app developers can track and analyze user acquisition, feature releases, user lifetime cohorts and more. adjust streamlines reporting for actionable metrics as a Facebook Marketing Partner and a Twitter Marketing Platform Partner. Their dynamic integrations are used by over 700 networks and analytics providers worldwide. For more insights, visit adjust.com/mobile-benchmarksq Apsalar Apsalar is one of the leading mobile app marketing measurement and optimization companies that helps app marketers drive maximum return from all their marketing investments. With Apsalar attribution and audiences, app marketers can optimize their media allocation and empower their partners and platforms to deliver customized communication, for better results and monetization at every step in the customer journey. For more information, visit apsalar.com. Localytics Localytics is one of the leading mobile engagement platforms. They give companies the insights and tools needed to improve mobile app acquisition, engagement and retention efforts. Localytics uses all the data surrounding users to deliver highly targeted and personalized engagement campaigns, including push and in-app messages. They then use performance data to measure and optimize those efforts toward the metrics that drive businesses forward. The platform is used in more than 37,000 apps on more than 2.7 billion devices. Learn more at localytics.com. 19