Abercrombie & Fitch’s app avoids churn with focus on top customers
RANCHO MIRAGE, CA – An Abercrombie & Fitch executive at the Mobile Shopping Summit 2015 said that the turnover rate for its mobile application is not a problem because users consist primarily of the top one percent of customers.
During the session, Monetize Mobile Panel: Laser-Focusing The Digital Experience on Revenue Generation, the executive also said that a bad app experience is worse than a bad mobile Web experience. However, many retailers are still questioning how big of an investment they need to make in apps.
“Right now, we don’t really market our apps,” said Anshuman Taneja, senior director and head of digital product management at Abercrombie & Fitch. “The people who are finding us are the top one to two percent with the brand, and the app is giving them a reasonable experience so app churn is not a big problem.
“When someone has a bad experience on the app, it is worse than on the Web because users have higher expectations,” he said.
Customer lifetime value
Mr. Taneja, who worked at Walgreens helping the chain develops its mobile products, discussed the ongoing debate in the retail space over how much to invest in mobile apps. He urges retailers to look at the lifetime value of app users as this can help clear up the debate.
“Over the last several years, many retailers have wondered should we invest in mobile apps just because we have to, is it table stakes, even if we don’t know what the results are,” Mr. Taneja said. “Or should we take the time to really figure it out.
By focusing on lifetime value, Walgreens was able to determine that apps can drive customers to spend more with a retailer over the course of a year. The challenge is figuring out how to measure this in an incremental way. Many retailers will say that app users spend x amount more with their brand, but this does not provide a clear picture of how much incremental business these users are brining to the brand.
“To get causal incrementality, you have to do a cohort study,” Mr. Taneja said. “We saw incremental gains in the high single digits.
“Being able to get say 15 percent more out of your best customers over the course of a year is good.”
To do a cohort analysis, marketers need to look at customers before and after they downloaded the app, controlling for other factors that might be impacting sales, such as that someone started a weight loss program.
Giving Android its due
One area that Abercrombie & Fitch is beginning to take a closer look at is personalization, feeding in data from CRM to personalize the digital online experience for shoppers. The retailer would also like to figure out how to leverage some of data available from social media such as Facebook about customers.
“Every retailer needs to take baby steps to figure out that point where personalization becomes creepy,” Mr. Taneja said.
While retailers often think about the iPhone when talking about apps, Eli Weiss, chief mobile strategist at B&H Photo Video recounted how the retailer benefitted by paying closer attention to the user experience for users of its Android app.
The retailer’s Android app used to look very much like its iPhone app, with the latter outperforming the former. After learning that other retailers were seeing results on Android by having a team of developers who are very enthusiastic about the OS, B&H worked on reworking the app more along the lines of the Android guidelines.
“Once we released the app, we saw great response. We saw a spike in the conversion rate, cart sizes increased,” Mr. Weiss said. “A lot of the small-ticketed customers got an increase.”
Back on iOS, B&H saw a big boost for its iPhone app once it integrated Apple Pay.
“Once we did it, we started seeing very, very good results – numbers exploded,” Mr. Weiss said. “Customers who started checkout, finished with 98 percent success.
“Customers who clicked the Apple Pay button usually finished, which makes sense because it is native in the app,” he said.
Bigger mobile screens
Mr. Weiss also reported that one of the biggest changes he has seen on mobile lately was when Apple first introduced bigger screens with iPhone 6.
“Before the iPhone 6 came out, we had a lot of traffic on iPad,” Mr. Weiss said. “The longer the iPhone 6 was out, traffic on iPad was decreasing.
“We started deprioritizing on the tablet and focusing on mobile for bigger screens,” he said.
B&H is also beginning to explore bringing some personalization to mobile, primarily by asking customers to indicate their interests.
“On Android, we testing an experience where customers can select what category they are interested in – music, production – so we send you deals. We want to send you only things that are relevant to you,” Mr. Weiss said.
Chantal Tode is senior editor on Mobile Commerce Daily, New York