Responsive Web vs. Mobile App – Where Should You Invest?

Written by: on December 19, 2016

This is one of the most commonly asked questions by our m-commerce clients today. It is also one of the most complex. In many cases, the answer is not so much one or the other, but more a question of budget allocation and priorities. Despite the advances in mobile web user experiences, a recent survey by Adobe found that when it comes time to buy from a retailer, 57% of consumers preferred the mobile app buying experience over mobile web. Another study by Criteo found that average order values on native apps were nearly 40% higher compared to mobile websites. So how do brands determine the optimal mix when considering the investment in mobile? We start by assessing where, when, and how often your unique customer’s are likely to buy. Then, consider how they will find you.

Most of us have a favorite retailer or brand that we frequently buy from. I trust them enough to know my size, home address, and when I enter one of their stores. There is a connection I feel when they offer me something of value for the personal data I entrust them with. I enjoy being notified of products and sales that are relevant to me, and perhaps most importantly, I love the convenience of the purchase process.

Conversely, there are a greater number of retailers I buy from solely because their price is competitive for the ‘commodity’ I need. I don’t want a relationship with them, nor do I want them knowing anything about me other than where to ship the goods.

These examples illustrate one of the fundamental considerations when deciding between a retail app experience that enhances customer relationships versus a mobile website that simply facilitates a transaction to the widest audience. You need to ask your analytics team several important questions: What percentage of profit is generated by repeat purchasers over the course of time? How many are one-time buyers that only show up around sales and holidays? How profitable are orders from the former compared to the latter? How much does it cost to acquire them? What is your customer lifetime value? The answers to these questions (along with some data modelling) are a great way to begin optimizing your investments.

While your customers are the primary focus, don’t lose sight of the ever-evolving nature of search indexing. For instance: A few years ago, web search indexing was profoundly influenced by the mobile investment of a brand. It seems like yesterday when organic search consultants stressed the importance of developing mobile-friendly, or responsive web sites. Search engines became aware of whether or not a website was viewable and fully interactive on small screens. As a result, some websites were summarily rewarded or had their credibility diminished by indexing algorithms that added weight to mobile-friendly experiences. Similarly, with the relatively recent advent of universal links and app links, we expect Google and Apple search algorithms to further reward brands that provide mobile apps that compliment the web experience.

M-commerce made up 35% of all U.S. online purchases in Q2 of 2016, according to Criteo. Comscore also published a study around the same time that showed that retail apps achieved 10% year-over-year growth in time spent, the second highest of 13 categories measured. These upward trends show no sign of slowing down. As such, we believe that the vast majority of brands that continue to invest in native app experiences will see a positive return on investment.

Brad Gagne

Brad Gagne

Brad Gagne has been a leader in the POSSIBLE analytics group for over 10 years. Most recently, he was Group Director of Marketing Sciences for the Seattle office, and recently shifted roles to focus on growing analytics for mobile and connected devices at POSSIBLE Mobile. His current and past clients include Turner Broadcasting, Microsoft, TDAmeritrade, IHG, Hyundai and several others.  
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