mCommerce Insights

What You Need to Know About Mobile ROI


The retail industry is facing stark and sudden changes. Between Amazon’s acquisition of Whole Foods and the alarming rate at which shopping malls across the country are shutting their doors, the retail landscape has become a major talking point for many eCommerce analysts. Think-pieces continue to outline “impending doom” for retailers abound, but there’s no need to panic. Alarmed retailers need only to implement comprehensive, realistic solutions to roll with the changing tides.

The best way for retailers to move forward is to adapt to the change. The statistics supporting mobile ROI are too strong to ignore, and for every day that customer retention is put on the back burner, hundreds, thousands, or even millions of potential revenue go down the drain. Shoppers are getting smart, savvy, and more in control of purchasing power than ever before.

So, why the major shift to mobile? 

  • Retail is adopting new technologies at the same pace as millennials. 
    • Millennials adopt new technologies as they emerge; a strong contrast from previous generations. This has led to an increase in adoption rates for new technologies with retailers.
  • Millennials are “Real-time” consumers.
    • Millennials shop for today’s needs, as they have the luxury of resources to research products extensively before purchasing, and the ability to receive them within 1 or 2 days after purchasing.  
  • The decline of shopping malls and rise of experiential retail
    • Millennials are fans of experiential retail; think pop-up shops, retail events, coffee shops or co-working spaces featuring local vendors, etc. The brick-and-mortar store just isn’t cutting it anymore in a landscape where options are so vast.

And, how exactly does retention factor into mobile ROI?

  • Customer acquisition costs are on the rise with no sign of slowing down.
    • With large marketplaces and offline retailers moving online, the eCommerce space is now highly competitive. A highly competitive market means increased acquisition costs for new customers as the retail marketing space has become bloated. Keywords are overused, email click through rates are on the decline, and viral marketing requires more luck than creativity. And although a new customer costs 7x more than a retained one, the majority of companies (44%) continue to focus on acquisition VS. retention. Gaining one new customer is so costly due to market saturation of abundant product information, product choices, and aggressive fulfillment strategies. As competition continues to increase, cost of acquisition will continue to increase, and the gap in cost between a new and retained customer will get only get bigger.
  • Apps remove you from the mobile search marketplace by putting you right on the home screen.
    • The days of having to compete with other retailers in a heavy populated market becomes extensively simpler when your app is already living on your customer’s home screen. Not only are apps easier to navigate than the extensive world-wide web, but they provide a sense of familiarity and allow for personalized relationship building, whether it be through abandoned cart reminders, promotions, or push messaging.
  • Apps provide an improved experience from mobile web, with features that require native functionality like one-touch checkout through Apple Pay.
    • We’re all too familiar with the kinks that can slow down or ultimately stop us dead in our tracks during a potential purchase. Non-responsive mobile website? On to the next. Not-so-smooth checkout process? I’ll pass. With the current retail landscape, all these little details not only matter, but have a detrimental impact on the customer journey. With mobile apps, you can provide your customers a quick, pain free shopping experience that ensures they will continue coming back to your online store, purchase after purchase.
  • Apps offer direct communication through push notifications, allowing retailers to provide real-time offers and build long-term relationships.
    • Apps that send push notifications see retention rates 70x higher than mobile websites. Not only is that statistic impressive, but as a business owner, it would be simply unwise to ignore. While brick-and-mortar stores are slipping behind in sales and missing quarterly goals, there’s an untapped goldmine of retention sitting right under retailers’ noses. As acquisition costs continue to soar, focusing on building long-term relationships is key to surviving the ‘retail apocalypse’.

Still not convinced? Consider these facts, based on real data from our merchants:

  • The probability of selling to a retained customer is 60-70%, while the chances of selling to a new one are 5-20%.

  • Current customers are also 50% more likely to try new products and spend 31% more on average.

Increasing customer retention by 5% can increase profits from 25 - 95%.

eCommerce is becoming more and more competitive. Due to rising acquisition costs, it’s detrimental for retailers to shift their focus from acquisition to retention to be profitable. To successfully retain customers, retailers must provide equal shopping experiences, be in constant communication with customers, and find a point of differentiation.

Angie Reynolds

Written by Angie Reynolds

Angie is a Texas native and received her BS in Advertising at the University of Texas at Austin. An avid writer and frequent traveler, Angie hopes to apply her marketing experience to promote the interests of animals and children.


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