E-Commerce (electronic commerce) is when a transaction occurs using the Internet. An example is when a customer (the buyer) purchases one or more products or services online from a virtual storefront (the seller). eCommerce applications or e-commerce mobile apps are design patterns of functionality needed to list items for purchase, facilitate a transaction by accepting payment methods, and initiate fulfillment or delivery of those purchases.
What is an e-commerce mobile app?
E-commerce mobile apps and shopping apps also function as marketing tools when they allow for paid strategic placement of items for sale or use push notifications to market products. Mobile app development for e-commerce is also called m-commerce or mCommerce.
Transactions that occur in the e-commerce industry can usually be classified as business-to-consumer (B2C), consumer-to-consumer (C2C), or business-to-business (B2B). eCommerce apps are optimized around the buyer and seller relationship. These categories are a way to break down the different types of e-commerce app experiences in the e-commerce industry and the various e-commerce applications.
Key Features of the Ecommerce mobile app
Product Listings: Detailed descriptions, images, prices, and availability of products. Categories and search functionality to help users find products easily.
Shopping Cart: Allows users to add products they wish to purchase and review them before checking out.
Payment Processing: Integration with various payment gateways (credit/debit cards, digital wallets, bank transfers) to facilitate secure transactions.
User Accounts: Features for user registration, login, and profile management. Order history, wish lists, and personalized recommendations.
Order Management: Tools for tracking orders, managing returns, and handling customer inquiries.
Notifications: Push notifications to inform users about order status, promotions, and new products.
Customer Reviews and Ratings: Allow customers to leave feedback and rate products, helping others make informed decisions.
Shipping and Delivery Options: Information on shipping methods, costs, and delivery times. Order tracking capabilities.
Return features are essential for managing product returns and ensuring customer satisfaction.
Customer Support: Access to customer service through chat, email, or phone.
Analytics and Reporting Tools for businesses to track sales performance, customer behavior, and inventory levels.
Applications for the e-commerce mobile app
-
Retail and Shopping
Mobile Shopping Apps: Retailers like Amazon and eBay have mobile apps that allow users to browse products, compare prices, read reviews, and make purchases.
Flash Sales and Offers: Mobile platforms often host exclusive flash sales, providing deals and discounts to app users.
-
Banking and Financial Services
Mobile Banking: Banks offer apps for account management, fund transfers, bill payments, and more.
Mobile Wallets: Services like PayPal, Apple Pay, and Google Wallet enable users to make payments, transfer money, and manage finances securely.
-
Travel and Ticketing
Booking Apps: Mobile apps for airlines, hotels, and travel agencies allow users to book flights, accommodations, and rental cars.
E-Tickets: Users can store and access tickets for flights, trains, concerts, and events on their mobile devices.
-
Entertainment and Media
Streaming Services: Platforms like Netflix, Spotify, and YouTube provide mobile apps for streaming video and audio content.
Gaming: Mobile gaming apps offer a wide range of games, from casual puzzles to complex multiplayer experiences.
-
Healthcare
Telemedicine: Mobile apps enable patients to consult with doctors, schedule appointments, and access medical records.
Fitness and Wellness: Apps for tracking exercise, diet, and health metrics are popular among users aiming to maintain a healthy lifestyle.
Advantages of an Ecommerce mobile app
-
Convenience
Users can shop, bank, and manage various tasks from anywhere, anytime, without needing a desktop computer.
-
Personalization
Mobile apps can offer personalized experiences based on user preferences and behavior, enhancing customer satisfaction.
-
Speed and Efficiency
Transactions are typically faster on mobile devices, providing quick and efficient service to users.
-
Push Notifications
Businesses can engage users through push notifications, informing them about new products, sales, and important updates.
-
Wider Reach
With the increasing number of smartphone users, businesses can reach a larger audience, including those without access to traditional computers.
Disadvantages of an Ecommerce mobile app
-
Security Concerns
Mobile transactions can be vulnerable to security breaches, including hacking, phishing, and malware attacks. Ensuring robust security measures is critical.
-
Technical Issues
Users may face technical issues like app crashes, slow loading times, and compatibility problems with different devices and operating systems.
-
Privacy Issues
Collecting and storing user data on mobile devices raises privacy concerns, requiring businesses to adhere to strict data protection regulations.
-
Limited Screen Size
The small screen size of mobile devices can make navigation and browsing more challenging compared to desktops, potentially affecting user experience.
-
Dependence on Internet Connectivity
Mobile commerce relies heavily on internet connectivity, which can be a limitation in areas with poor or unreliable internet access.
What is Ecommerce mobile app ROI?
Every e-commerce business must keep a close eye on return on investment (ROI) if it wants to be successful. For instance, for every dollar you spend on marketing and advertising, you should aim to make more than one dollar in return, which is known as a positive ROI. Anything over 100% ROI is a positive return; anything below 100% is a loss.
Think of ROI as a litmus test. You use it to measure the success of your marketing efforts. You put money into your marketing and advertising to make a profit. The higher your ROI, the wider your profit margin.
Let’s look at an example outside of the e-commerce world. Imagine that you run a bakery selling cupcakes. You spend $100 on packaging, shop window display, and even ads in the local paper. By the end of the day, you’ve sold cupcakes worth $500. In other words, you’ve made a profit of 4 times your initial investment. Your ROI? A sweet (no pun intended) 400%.
You can apply this same principle to your e-commerce business. You need to track how much you’re spending on marketing, product development, customer service, and so on, and compare that to how much you get in return.
ROI vs. ROAS
The primary difference between ROI and return on ad spend (ROAS) lies in their scope. While ROI considers all business costs and profit, providing a full picture of an investment’s financial performance, ROAS focuses exclusively on the revenue generated from advertising expenditure. See the example below of how this looks in practice.
How to calculate ROI?
There are two main return on investment formulas. However, we’ve also included a bonus method to help you assess your app’s potential Return on Investment.
Method 1: Divide the net return on investment by the investment cost and multiply this number by 100%.
Method 2: First, find the net return of investment by subtracting the initial value of investment from the final value of investment. Then, divide the answer by the cost of investment and multiply by 100%.
Bonus app ROI method: We’ve included this ROI definition for app developers who’ve yet to launch their app and wish to estimate their app’s return on investment.
Calculate NPV advantages: Multiply your app’s potential revenue by its projected life span and then subtract the cost of debt and equity from this number to get your net present value (NPV) advantages.
Calculate NPV costs: Multiply the maintenance cost by the app’s life span and add this to your total development costs. Then subtract the cost of debt and equity to get the NPV costs.
Divide NPV advantages by costs: Finally, to calculate the ROI for your app, divide the NPV advantages by the NPV costs.
Considerations for measuring your app’s ROI
From the beginning, mobile app developers must be clear about their business goals and metrics. Below, we’ve listed critical factors to consider when measuring your app’s return on investment.
1. Determine costs
This point is directly related to the ROI app method mentioned above. Before launching, calculate how much you’ll need to spend on developing and marketing your app, as well as retention and customer service costs. By doing so, you’ll know how best to allocate your resources.
2. Set your KPIs
Key performance indicators (KPIs) show how your mobile app is performing and can be used to determine where to optimize your app. Consider KPIs that reflect users’ interaction with an ad or within your app, such as user acquisition or retention rate.
However, every app is different. Many KPI apps are used, but the ones that fit your app are determined by your app’s vertical and individual business needs. We’ve compiled a list of the must-know mobile app KPIs for every vertical.
3. Calculate LTV
Determine a user’s lifetime value (LTV) by multiplying the average revenue per user (ARPU) by the customer’s lifetime value. LTV indicates how much a user is worth during the time they spend in your app.
LTV is a must-have metric as it enables marketers to understand how much money they can spend on user acquisition while staying profitable. Using LTV, marketers can better optimize revenue streams such as in-app advertising, subscriptions, and in-app purchases (IAPs).
4. Get accurate analytics
Partner with a mobile measurement platform (MMP) for a single source of truth to track user behavior, segment users, and optimize your marketing campaigns. Why? If your data input isn’t accurate, your marketing team won’t be able to make successful campaign decisions.
Ensure the MMP you select prevents mobile ad fraud, so your attribution data is 100% accurate.
Methods for evaluating and monitoring Ecommerce mobile app ROI
Revenue tracking: Track your sales to get a clear picture of your business performance.
Cost tracking: Monitor your expenses to understand where your money is going.
Conversion tracking: Follow how many visitors are turning into customers to gauge the effectiveness of your strategies.
Attribution modeling: This helps you understand which marketing channels are most effective in driving sales.
Return on Ad Spend (ROAS): Measure the effectiveness of your advertising campaigns by comparing the money spent on advertising to the revenue generated from those ads.
Customer surveys and feedback: Direct insights from your customers can help you understand what’s working and what’s not, and can feed into your ROI analysis.
Conversion Rate Optimization of Your E-commerce Mobile App Website
A rising conversion rate means that more visitors to your site are filling out their virtual carts and checking out. This is great news for your overall ROI.
Website design, navigation, and user experience (UX) have a big impact on your conversion rate. It stands to reason – who would you rather trust when making a purchase: a brand with a visually boring, difficult-to-navigate website or a visually appealing one with a seamless UX? It’s a no-brainer – to optimize your conversion rate, you need to get your website right.
Strategies to boost website conversion rate
Now we understand the importance of website design and UX in terms of conversion rates, let’s take a more detailed look at strategies to optimize them.
Improve the checkout process: One of the best ways to reduce cart abandonment is to implement intuitive and streamlined checkouts. Aim for the lowest number of steps needed to complete a purchase. Consider offering guest checkout options so you don’t exclude customers who don’t want to sign up.
Optimize product pages: High-quality images, engaging product descriptions, and easy access to product reviews can make your product pages more attractive.
Offer chat support: Live chat or chatbots offer real-time assistance to customers. They can improve the shopping experience and resolve queries that might otherwise make people hesitant to buy.
Add social proof elements to the site: Testimonials, reviews, ratings, trust badges, industry certifications, and secure payment icons help to gain the trust of your audience. Trust has a positive correlation with conversions.
Optimize for mobile: Pretty much everyone uses mobile devices to make purchases these days. Make sure you’ve got a mobile-responsive design, easy navigation, and quick load times.
Implement effective CTAs: Guide your visitors toward a purchase with clear and compelling calls to action (CTAs). Try out different CTA colors, positions, and messages to find out what works with your customers.
Use personal recommendations: Just like Amazon’s ROI-boosting strategy, try using recommendation algorithms to suggest related products. This will help to boost the average order value and increase sales.
Effective Product and Pricing Strategies
Let’s face it. When it comes to buying products online, people are mainly interested in three things:
Will the product do what they want it to do?
Can they trust the seller?
Are they happy with the price/shipping options?
To answer these questions, you need to develop effective product and pricing strategies. Here are some steps you can take to do that:
Step 1 – Do market research
To work out whether your product is right for a certain market, you need to understand what your customers want by conducting market research. Market research will help you determine the demand for your products and identify any consumer trends. Start by analyzing consumer behavior, competitor offerings, and market dynamics. And remember – this isn’t a one-time task. You need to always keep your finger on the pulse of the market to make sure that your marketing campaigns are hitting the right notes.
Step 2 – Select and promote high-converting products
Based on your research, you should identify good quality products that have high selling potential. Once you have identified your star players, promote them strategically on your website and through paid ads. You can also use methods such as email campaigns, social media marketing, and native advertising on the open web to get the word out there.
Step 3 – Use dynamic pricing and discount strategies
It’s time to put your salesperson’s hat on. Dynamic pricing means adjusting your prices based on supply, demand, and other market conditions. Try to avoid drastic price changes, though, and aim for transparency and price consistency to avoid putting customers off. Most people like to feel that they’re getting good value for money, so you can also offer discounts (think seasonal sales, flash sales, or discounts for bulk purchases). This will help to drive purchases and clear any excess inventory.
Email Marketing
Instead of shouting about your products to the whole wide world (or the whole world wide web) with paid ads, how about dropping personalized messages straight into the inboxes of interested customers? When done right, email marketing can be highly effective in boosting e-commerce ROI.
Good email marketing campaigns help you nurture potential customers along the sales journey toward a purchase. Nurturing emails often form part of an overall sales funnel and are designed for direct conversions.
How does email marketing work?
So, how do you turn your e-commerce website visitors into engaged email subscribers and, ultimately, happy customers? Here’s a basic roadmap:
Collect email addresses: The journey begins with enticing website visitors to sign up for your newsletter, alerts for deals or promotions, or any other creative method of gaining their email addresses. A well-placed pop-up or an attractive lead magnet can work wonders!
Build a responsive email list: It’s not just about adding names to your list but nurturing a responsive email list that’s primed for engagement. Remember, quality trumps quantity.
Segment subscribers: One size does not fit all in email marketing. Segment your subscribers based on factors like interests, preferences, location, purchasing behavior, etc. This allows you to send hyper-relevant content to specific customer groups, increasing engagement and conversion rates.
Design effective email campaigns and automation sequences: This is where the real fun begins. Craft engaging email campaigns tailored to each segment. Use automation sequences to send timely, triggered emails, like a welcome series for new subscribers or a special offer on a customer’s birthday.
Look at how your clothing brand promotes its products via email. The email subject line tempts the recipient by pointing out a dress they NEED! Plus, the designed email features an attention-grabbing GIF banner promoting a 70% off sale. By sending emails to previous customers, the brand is building its relationship with those already familiar with the brand to boost sales and retention rates. % off sale. By sending emails to previous customers, the brand is building its relationship with already familiar customers to boost sales and retention rates.
Don’t miss this: How Can AI Tools Be Used to Boost Productivity?
Social Media Engagement
Did you know, as of 2022, more than half the world’s population was using social media? That’s billions of potential customers scrolling through feeds each day, looking for their next purchase.
What’s more, data shows that 54% of social browsers use social media to research products. Now, if that doesn’t get your e-commerce gears grinding, we don’t know what will!
Engaging people on social media is like opening a direct line to your target audience. It allows you to build brand awareness, showcase products, and retarget website visitors – all helping to drive traffic, conversions, and, ultimately, boost your e-commerce ROI.
Social media strategies for e-commerce
Ready to harness the power of social media? Here are some tried-and-true strategies:
1. Organic content
Engage your audience with compelling content that tells your brand story, showcases your products, and provides value.
2. Community interaction & groups
Engage with your audience, answer questions, and participate in discussions. Foster a community that feels connected to your brand.
3. Social media advertising
Consider sponsored posts and ads to extend your reach. Make use of advanced targeting options to reach your ideal customers.
4. Influencer partnerships
Collaborate with influencers who resonate with your brand to tap into their dedicated audience.
KPIs for the Ecommerce mobile app
Conversion Rate: This measures the percentage of visitors who complete a purchase on your site.
Customer Acquisition Cost (CAC): The cost to acquire a new customer. It helps you understand how much you’re spending on marketing efforts to attract new buyers.
Average Order Value (AOV): The average amount a customer spends when they place an order on your site.
Cart Abandonment Rate: The percentage of shoppers who add items to their cart but do not complete the purchase.
Customer Lifetime Value (CLV): The projected revenue a customer will generate during their lifetime.
Website Traffic: The number of people visiting your website. This can be broken down into different types, such as organic, paid, direct, etc.
Customer Retention Rate: The percentage of customers who continue to buy from your site over a certain period.
Email Open and Click-through Rates: These help you measure the effectiveness of your email marketing campaigns.
Social Media Engagement: Measures how people interact with your social media content, such as likes, comments, shares, and follows.
Customer Experience and Retention
E-commerce success is about more than just making sales – it’s about satisfying customers, so they’ll return for more.
Research shows that increasing customer retention rates by just 5% can increase profits by 25% to 95%. That’s a staggering impact on your bottom line!
E-commerce thrives on a cycle of satisfaction, loyalty, and retention. If you can provide a top-tier customer experience, the higher the likelihood of getting repeat purchases.
Personalization: From product recommendations to personalized emails, show your customers you understand their needs and preferences.
Customer service & support: Provide swift, effective support to resolve issues and build trust.
Shipping & checkout optimization: A seamless checkout experience and reliable shipping can make a world of difference in customer satisfaction.
Loyalty programs: Reward repeat customers with points, discounts, or other perks.
Customer feedback: Listen to your customers. Their feedback can be invaluable in refining your product offering and overall shopping experience.
We have covered everything you need to know about e-commerce mobile app development.
E-commerce mobile app is no longer just a trend- it’s a lasting revolution. If you have great mobile app ideas and are serious about building a fully functional, visually appealing mobile app, make sure to partner with the right developers.
At Marketing Chiefs, we specialize in creating efficient e-commerce mobile app designs that prioritize an outstanding user experience. Reach out to Marketing chiefs to talk about your mobile app goals.
