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Sales swing new customers but real wins are made with loyalty

Know the pivotal role of app engagement and user experience in retaining customers year-round

Gains won during peak shopping season will turn to dust in 2024 unless app engagement is built all year round, argues Sue Azari, eCommerce Industry Lead at analytics firm AppsFlyer

The 2023 holiday season gave app marketers many reasons to be confident. Smartphone use reached a tipping point over desktop, driving 51.8% of online sales over Black Friday in the US, likely bolstered by the increased popularity of e-commerce over physical shopping last year. In fact, online retail sales increased by 6.3% year on year in the period between November and Christmas Eve, compared to in-store sales that were up a more modest 2.2% year on year, according to research from Mastercard SpendingPulse.

As a result, a savvy app-first approach to the sales seasons paid off, with in-app purchases spiking by 80% in the two weeks before Black Friday 2023 compared to 2022, according to AppsFlyer data.

So what does this mean for brands in 2024?

A stellar user experience is the key to loyalty
Research shows that returning customers spend up to 67% more than first timers, highlighting that once a retailer has been able to expand its user base, it’s key to keep those customers coming back.

Fostering loyalty begins with a strong UX (user experience). While headline promotions and value products should be easy to find, retailers must also make sure their in-app messaging and push notifications serve to inform – and not irritate – users.

Integral to this is the personalization potential of first-party data which is now taking centre stage, with third-party cookies finally meeting their demise in 2024. Using direct interactions with customers via the app and email (for example) to find out where they are shopping, their price sensitivities and why they’re buying enables you to make sure your content hits home. Vitally, the kind of direct conversation-style interaction often used when gleaning first-party data also builds engagement and trust.

Taking customer relationships to the next level
Robust customer engagement lays the ground for other approaches. ‘Shoppertainment’ content will draw users into the brand’s community, giving them the chance to access exclusive content and products, earn rewards, personalize the app to their preferences, and enter competitions. The greater their level of interaction, the more the retailer can learn about the user and further refine the deals and discounts on offer.

Gaining this deeper understanding of customers is essential to nurturing loyalty over the long-term. Effective measurement begins with having a clear picture of what success looks like, and while merchants will want to boost KPIs such as number of app downloads, the metrics that really matter will be purchase frequency (PF) and average revenue per user (ARPU).

Calendar shopping events provide brands with a chance to boost revenues and encourage audience engagement. But to secure long-term success apps marketers need to kickstart 2024 with a focus on user loyalty and retention that paves the way for sustained growth. Building nascent loyalty in the customers won through 2023’s holiday season and investing in in-app experiences now will be key to retailers becoming the shopping destination of choice all year round.

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Sue Azari, eCommerce lead, EMEA & LATAM at AppsFlyer

Sue Azari is eCommerce lead, EMEA & LATAM at AppsFlyer, where she brings her deep knowledge of the sector to advise companies on their mobile marketing strategies. She has more than 10 years’ experience scaling retail apps, having worked at a number of high-growth brands, including The Very Group, Net-A-Porter, and Beauty Pie. Outside of work, Sue spends her time practising yoga, cold water swimming, kayaking and travelling to new cities.

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