Why online retailers cannot do without a mobile app?

Gartner, in one of its reports, states more than 40% of mobile handsets sold globally were smart phones, and that figure is likely to grow to 60% by 2015. Adoption of smartphones is only going to further fuel the growth of transactions through mobile apps.

ComScore, in one of its recent reports, reports that two thirds of ALL smartphone owners performed some sort of shopping activity on their phones, including comparing products and prices, searching for coupons, taking product pictures or locating a retail store.

Online retail has matured from its early beginnings where desktop users ordered products over an internet connection. In those stages, the capability of retailers to track customers’ online behaviour was very limited. The best that they could manage was using cookies, which are small bits of code that remain in the user’s PC after the transaction was completed. The extent to which customers’ online behaviour could be tracked was limited using cookie-tracking.

Smartphone Retail

The convergence of internet and telecommunications has enabled a complete paradigm shift in the way online retail transactions are done. Customers now have the power of ‘always-on’ internet, literally at their fingertips, with their mobile devices. Mobile application development took off as a new approach to engage users, right from helping them complete their transactions online, to keeping them updated about promotional offers, discounts and other developments periodically.

The mobile app has become the pivotal point in online retail:

Amazon offers discounts to customers purchasing ANY product through its mobile price comparison app.

Myntra’s (now part of the biggest retail chain Flipkart in India) incentivizes customers to transact with them ONLY through their mobile app.

Slightly more than one in three purchasers used their smartphone to make a purchase while in a store.

Why is a mobile app so critical for an online retailer?


Enhanced transaction experience

Mobile applications are feature-rich and allow customers to drill down to specific tasks without having to browse through an entire retailer website. They ultimately contribute to giving a whole new transaction experience, which is the most critical aspect of online transactions.

They help customers search for products, information or stores; serve as a channel for marketing, promotions, building loyalty, customer engagement and payment; and address a wide range of consumer shopping needs.


Real-time communication of promotions/incentives

Mobile apps can be specifically developed to track user location through GPS, and use this information to share location specific promotional offers and coupons. Mobile apps enable the retailer to track their mobile behaviour and tailor their marketing message to individual customers.


Enhancing engagement levels

Mobile apps can help users connect to their peer group on social networks like Facebook/Twitter. They can not only get purchase recommendations, but can also share experiences about their transaction experience.


Enhanced Transaction Privacy

With a personalized transaction experience, it becomes easier for the retailer to ensure that transactions are completed in a more secure manner. New trends such as ‘one-click-purchase’ are now the norms with most online retailers.

According to a Forrester study, mobile commerce is expected to quadruple to $31 billion in five years (2012-17). The number of mobile retail buyers and sales is increasing rapidly. This has led to popularity in the usage of mobile apps. The number of mobile payment users is increasing across the globe; even the once-reluctant users are now getting comfortable with online payments.

All these point to only one important paradigm change: the mobile app is here to stay, and retailers need to invest in mobile apps if they are to stay relevant.

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