Consumer spending in shopping apps has witnessed a remarkable surge, with a 37% increase during the Q4 holiday season, as reported by the State of eCommerce App Marketing report from AppsFlyer.
This figure reflects a 30% higher rise compared to the same period in 2021, indicating robust growth and opportunities for retail marketers in the mobile space and in-app purchases.
While retail marketers continue operating in an uncertain economic landscape, last year’s Q4 holiday shopping season – which saw more in-app purchases compared to Q4 in 2021 – should provide a glimmer of hope, according to research from @AppsFlyer https://t.co/n8BSvH9ZD8
— Retail Technology Innovation Hub (@RTIH_RetailTech) July 18, 2023
Holiday Season In-App Purchases Propel Revenue Growth
According to AppsFlyer, retail apps, in particular, experienced a significant boost in revenue during the peak shopping month of November 2022. These apps generated an average of 10% more income compared to the same period in 2021, a result attributed to the retailers’ efforts in enticing customers with early discounts and continuous holiday season incentives.
One of the key factors contributing to this success was the sustained popularity of in-app purchases throughout the entire holiday season. Retailers effectively attracted shoppers to their favorite shopping apps, encouraging return visits and repeat purchases. This positive trend played a crucial role in driving the economic engine of mobile shopping.
iOS vs Android: Holiday Season Shopping Days
The data from AppsFlyer revealed intriguing insights into consumer spending patterns during the holiday season. Despite the economic slump during H2 2022, which resulted in a 25% downturn in in-app user acquisition spending among global eCommerce marketers, the holiday season proved to be a ray of hope.
Shopping spending on Apple’s iOS increased by a staggering 81%, while Google Android witnessed a substantial 61% surge on Black Friday 2022 compared to the daily average in November. This highlights the critical importance of this period for eCommerce apps.
Even though Cyber Monday sales are not as high as those on Black Friday, they still stay strong, being around 25% higher than the average sales in November.
Sue Azari, Industry Lead for eCommerce at AppsFlyer, stressed the importance of early planning for marketers who want to take advantage of the shopping days in November. She stated:
Marketers looking to capitalise on the critical shopping days in November should start planning now. This includes organising user acquisition campaigns in the months leading up to Black Friday to benefit from the more affordable costs during this timeframe. Additionally, using remarketing strategies to guide users to the app to keep them engaged until those peak sale days.
Apple iOS apps outperformed Android with an 85% higher share of paying users, indicating the platform’s popularity among consumers. Moreover, November conversion rates on both platforms rose 15% above the monthly average, further affirming the success of the holiday season strategies.
Cost Optimization and Enhanced Measurement
Cost optimization and enhanced measurement have become key areas of focus for marketers. The cost of media in the eCommerce sector witnessed a significant 30% year-on-year decrease in Q1 2023 compared to Q1 2022. This indicates the industry’s ability to adapt and remain resilient even amidst challenging economic conditions.
Customer acquisition costs, measured by Cost Per Install (CPI), peaked in November 2022 but then saw a 30% decrease in Q1 2023. This shows a positive trend in cost reduction for marketers. This decrease in CPI suggests that marketers were able to acquire new customers at a lower cost during the early months of the year, which is an encouraging sign for businesses.
On iOS, marketing-driven non-organic installs increased by 19%, attributed to lower CPIs and enhanced measurement confidence in the post-iOS 14.5 app landscape. Android also witnessed an 11% drop in CPI during the same period. It indicates that marketers are becoming more effective in targeting and engaging potential customers on the iOS platform, leading to increased app installations.
Remarketing: A Vital and Cost-Effective Strategy
In the face of budget cuts, marketers are now prioritizing remarketing as a vital and cost-effective strategy. Remarketing consistently held a share of over 40% monthly in the global marketing landscape. This approach enables retailers to reconnect with potential customers who have previously shown interest in their products or services, fostering brand loyalty and repeat purchases.
Shani Rosenfelder, Director of Content Strategy & Market Insights at AppsFlyer, highlighted the significance of emotional marketing during these challenging times. She stated:
Emotional marketing offers a greater resonance now more than ever. So, marketers should stay attuned to the needs and sentiments of audiences to connect with them on a deeper level.
The success of the holiday season offers a glimmer of hope for marketers, prompting them to plan strategically for the upcoming holiday season and beyond. As the mobile landscape continues to evolve, retailers must embrace in-app experiences and innovative marketing tactics to engage shoppers effectively and tap into the thriving mobile retail market.
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