It’s getting less expensive for brands to acquire new mobile shoppers and app users as customers become more comfortable using their smartphones for shopping purposes, according to the 2017 Mobile Shopping Apps Report from Liftoff, a mobile app marketing and retargeting firm.
The study, which analyzed 26.9 billion ad impressions across 4.8 million app installs between April 2016 and April 2017, found it costs an average of $4.45 across all mobile commerce categories to acquire a new shopping app user — meaning the user installs the app.
The average cost to convert that installed user to complete an account registration on the app was $30.51, while the average cost to convert an acquired user into a shopper — meaning they completed a first purchase — was $75.86 during the study period. An average of 5.9% of installed users were converted into shoppers overall.
The costs the report refers to are marketing and advertising costs to acquire users and shoppers, so it is pretty natural to assume that these costs overall would come down as more mobile smartphone owners become more comfortable with the idea of using their phones to shop.
It’s what Liftoff describes as a flywheel effect: “This then contributes to the growth of mobile commerce, which in turn encourages mobile users to make more purchases on their phones and ultimately contributes to the continuing downfall of the already-shaky brick-and-mortar climate.”
Other bits worth noting: Brand commerce apps — those offered by individual brands — require more expense than the average — $7.62 compared to $4.45 — to get users to install. However, the cost to convert brand commerce app users into purchasers is significantly lower than the average — $61.90 compared $75.86. Marketplace apps, like Amazon, for example, have much lower costs to acquire users at about $4, but have to spend an average of $104.33 to turn them into buyers.
Meanwhile, September was the strongest month to acquire users who also complete a first purchase ahead of the holiday season. The total cost of getting a user to install and then purchase on an app was $62.65 during that month, more than 28% lower than it was during the previous year.
The shrinking costs are good news for retailers, brands and marketers, but the percentage of people who are downloading apps and ultimately becoming buyers through those apps remains unimpressive. Brand commerce apps have an install-to-registration completion rate of 22.9% and an install-to-purchase rate of 12.3%, and the install-to-purchase rate of marketplace apps is much lower — 3.8%. A lot of work still needs to be done.