In today’s post, learn why mobile-centered advertising will be critical to retail profitability in the next few years. See how traditional brands like Bath & Body Works are profiting through mCommerce.
How Traditional Brands Are Profiting Through mCommerce
Bath & Body Works Bursts into Mobile
- 44.2% of retail eCommerce sales in the US will be mobile by 2025
- mCommerce retail sales increased 15.2% in 2021
- Top 50 brand apps saw 13% more installs in Q2 2022 vs. 2021
- Nike expects DTC to drive 60% of total revenue by 2025
- DTC beauty and retail apps saw more daily engagement in August 2022 than previous record highs from December
- Bath & Body Works drove record-breaking installs of their 5-year-old app this August based on data.ai research
By 2025, 44.2% of retail eCommerce sales in the US will be mobile, says Insider Intelligence. Digitally native direct-to-consumer (DTC) and eCommerce startups advertising on Instagram and TikTok have already mastered a mobile-first marketing approach and it pays off. 2021 retail mCommerce sales increased 15.2% from 2020 up to $359.32 billion. With two out of every five online shoppers making purchases through their smartphones and tablets, mobile-centered advertising will be critical to retail profitability within the next few years.
Social media platforms continue to test out native purchasing capabilities with varying degrees of success through “buy” and “shop” buttons that allow users to stay in-app. One-click payment options like Google Pay and Apple Pay streamline purchasing through mobile devices while also streamlining DTC offerings. While mobile-first GenZers hold massive spending power, mCommerce will increasingly attract consumers from other demographics as app usage grows and mobile payment capabilities evolve.
For example, as Nike moves away from traditional wholesale retailers like Macy’s, they expect their DTC arm to drive 60% of total revenue by 2025. According to data.ai, Nike’s iPhone app ranking hasn’t dipped below 13 for US shopping apps in the past year, usually sitting comfortably in the top five.
Traditional Brands Invest in Mobile DTC
In H1 2022, the top 50 brand apps saw 13% more installs in Q2 2022 compared to 2021 according to Sensor Tower. McDonald’s was the fastest growing brand app based on installs with three million more installs in H1 2022 compared to H1 2021. The fast-food giant spent $12.6 million on digital ads for its mobile app in July 2022, a 124% increase year-over-year.
An August report from Apptopia showed daily engagement in DTC beauty and retail apps saw more daily engagement in August 2022 than their record high from December 2021; DAU typically spikes in December. Notably, with the August launch of an app-based loyalty program, beauty retailer Bath & Body Works (known for its ubiquitous brick-and-mortar shopping mall presence) achieved 1.2 million new installs of their app.
Beauty Retailer Bath & Body Works Bursts Into Mobile
The Bath & Body Works app leverages a customer-first loyalty program aimed at the mobile consumer. Diving into app metrics through data.ai, ads for the updated Bath & Body Works iPhone app claimed a 1.24% share of all impressions across Instagram between August 28 and September 3, 2022. The app appears to have been advertised only on Facebook and Instagram within the United States during this time.
While Bath & Body Works’ iPhone app has been around since 2017, the recent download boom was due to freshly launched mobile advertising promoting the new app-based loyalty program. Lifetime downloads of the B&BW app are 11 million, with over 10% of lifetime installs (1.2 million) occurring within August 2022. Data.ai shows the app rank peaked at #3 overall in the United States and #1 in US Shopping on August 23.
Traditional brands incorporating and embedding mCommerce into their growth strategies can learn from successful digitally native DTC companies. Hyperfocus on specific SKUs, customer-first responsiveness, and subscriptions/memberships are often part of DTC’s success. Arguably the most important tactic, however, is profitable customer acquisition through paid social campaigns and mobile ad networks.
The meteoric rise of the Bath & Body Works app is a direct result of Facebook and Instagram advertising, buoyed by the virtuous halo effect of the top ten app store rankings. Actual revenue impacts remain to be seen. But the initial response to this traditional beauty retailer’s mCommerce investment and subsequent app advertising appears to be a positive one.
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