Acquiring mobile app customers isn’t cheap.
On average, it costs an online retailer $61.90 to get a consumer to install and make a purchase on the brand’s app, according to the “The 2017 Mobile Shopping Apps Report” study conducted by mobile app marketing firm Liftoff.
Liftoff based the report on data from 4.8 million app installs and 26.9 billion ad impressions from 41 countries between April 2016-April 2017. The report categorized apps into online marketplace apps, retail brand apps and value-add apps, such as coupon apps.
On average, it cost $4.45 to get a user to install an app across all app categories, $30.51 to get her to register an account and $75.86 to get her to purchase.
For retail brands, it cost $7.62 to get the consumer to install the app, which is 90.5% more than the $4.00 it cost an online marketplace to acquire the download. However, retail brands had to spend $61.90 to get that consumer to make a purchase, which is 40.5% less than the $104.03 that marketplace apps spent. The report look at 35 brand apps and 150 marketplace apps. Liftoff categorized Amazon as a marketplace app. Among the Top 1000 online retailers in North America, 375 had a mobile app in late 2016, according to Internet Retailer data.
“This means it costs 68% more to acquire someone who will make a purchase within the marketplace app over a brand commerce app,” says Dennis Mink, vice president of marketing at Liftoff.
On average, consumers make a purchase in a brand app on the first day they download it, whereas on average it takes marketplace app users seven days from the time they download the app to make a purchase, the report finds. This is likely because consumers are familiar with the brand, Mink says.
“Shoppers likely know they want something from a certain brand, download the app, then purchase,” Mink says. “Marketplace apps sell many brands, so people likely take time to shop, compare and read reviews.”
5.9% of consumers who install a retail app eventually make a purchase in app compared with 3.8% of shoppers who download a marketplace app. Conversion rates increase when looking at just North American shoppers, as 17.7% of North American shoppers who install a retail app make a purchase, which is the highest of all the regions Liftoff evaluated, which include Latin America, Asia Pacific, and Europe, the Middle East and Africa.
The report also finds acquisition costs also vary by operating system. Android users are cheaper to acquire but less likely to convert. On average, it costs $3.54 to get an Android shopper to download an app and $69.34 to get her to purchase. About 5.1% of Android consumers who install an app purchase in it. Apple users, by contrast, cost $5.58 to acquire the download and $82.37 to get her to purchase. Although, 6.8% of consumers who download a retail app on their iPhone will make a purchase.