The Mobile App Experience – Uncovering the consumer journey from app discovery to loyalty

This report looks into how consumers discover mobile apps, what motivates them to download the apps, and what keeps them coming back to using the app regularly.

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Table of Contents

  1. Introduction
  2. When and why do consumers pick apps over websites?
  3. How big is the app market and what’s driving revenues?
  4. How do people discover apps and what influences download?
  5. Why are some apps used regularly while others are forgotten?
  6. How can apps re-engage lost users?
  7. How can mobile apps grow user loyalty?

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List of Charts

  1. Mobile app vs mobile website preference when given a link
  2. Mobile app vs mobile website preference by usage context
  3. US Mobile App Installers and Penetration, by device
  4. US Mobile App Buyers, by Device
  5. US Mobile Download and In-App Revenues in billions
  6. US Mobile Download and In-App Revenues Share, % of total
  7. Mobile app discovery methods among smartphone owners
  8. Mobile apps discovered using web search by category
  9. Reasons for downloading a mobile app
  10. Reasons for downloading mobile apps by category
  11. Key factors when deciding to download a mobile app
  12. Consumer willingness to pay for mobile apps by category
  13. Mobile apps consumers use daily by type of app
  14. Attributes associated with frequently used apps
  15. Share of mobile apps abandoned after download
  16. Reasons for downloading app – Regularly Used vs Abandoned
  17. Reasons consumers abandon mobile apps
  18. Prompts that can restart usage of abandoned apps
  19. Effect of discount or reward on app re-engagement by category
  20. Average retention rates for apps that do vs do not interact
  21. Average retention rates – Messaging apps vs All apps
  22. Average daily session frequency – Messaging apps vs All apps
  23. US consumers engaging with brands via messengers
  24. US consumer attitude to brand engagement via mobile apps
  25. US consumer willingness to engage with brands on messengers
  26. Mobile user engagement – Messenger apps vs Social apps

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Introduction

Mobile apps are quickly becoming a part of consumer everyday life in the US. More then nine in ten smartphone and tablet users now use apps regularly. The time sensitive consumer who wants a faster, more intuitive experience for repetitive tasks like making a payment, looking up weather information or checking traffic details prefers mobile apps over websites. A third of smartphone owners are even willing to pay for an app resulting in a $10 billion mobile app market for the US market. The revenues are primarily driven by e-book purchases followed by gaming app downloads and in-game purchases.

In an over crowded app market, it is more important than ever for developers and brands to cut through the noise and win consumer attention. Word of mouth from friends, family and colleagues is the most effective tool in helping customers discover an app and also download it. Other factors that influence app download include discounts especially for restaurant apps and offline interaction for shopping apps. Consumers also pay attention to price, description and reviews on the app store before downloading an app.

But not all apps that get downloaded are used regularly. Consumers abandon apps when they lose interest in them or when they stop being beneficial. Social media apps are the most likely to be used on a daily basis. Besides social apps, people regularly use apps that make their lives easier. Ease of use, design, cross-device functionality and new content also help in encouraging regular app usage. Apps that engage customers in an offline setting are more likely to have regular users.

When it comes to regaining lost app users, discounts can prove effective in the short term but peer recommendation leads to a more sustainable engagement. Apps can altogether avoid having to re-gain lost uses by focusing on retaining the ones who download it. Apps that engage users are more likely to retain them in the long run. Apps can engage users via messaging apps, which have the highest retention rates among all app categories. Customers prefer to engage with apps (and brands) via Kik, Facebook messenger and Snapchat.

This report looks into how consumers discover mobile apps, what motivates them to download the apps, and what keeps them coming back to use the app regularly.

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When and why do consumers pick apps over websites?

Section Summary

Consumers conscious of time available to them are more likely to choose mobile apps over mobile websites. Consumers have come to assume that apps are the lite version of mobile websites that load faster, offer simpler navigation and allow them to bypass lengthy sign-up as well as repeated login processes. On the other hand, consumers gathering information to make an informed purchase decision are more likely to use the mobile website over apps.

Key Data Highlights
  • Consumers who had to choose between a link to a mobile app vs. one to a mobile website on their browser, mostly chose the link to an app (49%). Just above a third (35%) chose the website link, and the remaining 16% said they were not sure which one they would click on.
  • Consumers choose apps over websites due to convenience offered by pre-login (51%), simpler navigation (50%) and shorter load time (46%).
  • Nearly half (47%) of all smartphone owners in the US and the UK pick using an app over the mobile web when they want information ‘quickly’ or when they need to complete a task/transaction ‘quickly’.
  • However when it comes to consuming copious amounts of information in detail, 49% of all smartphone owners prefer opening a mobile browser instead of a mobile app.
  • Mobile web was the preferred option when consumers perform tasks are related to a purchase decision such as comparing options (32% vs. 19% for mobile apps), looking for inspiration (31% vs. 23% for mobile apps), and looking for something specific (30% vs. 27% for mobile apps).

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Convenience, simplicity and efficiency shape choice between app & website

When given the choice to click between a link that takes them to a mobile app vs. one that takes them to a mobile website on their browser, nearly half (49%) of all smartphone owners in the US and the UK chose to click on the app. Well above a third (35%) of smartphone owners chose to click on the mobile website link, while only 16% said they were not sure which one they would click on.

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Convenience is one of the key drivers among consumers who prefer clicking on links that lead to mobile apps. More than half (51%) of all smartphone users prefer apps because they find it convenient and time saving that the app already has their login details. Ease of use arising from simplicity also influences consumers to pick apps over website. Half of all smartphone users who prefer clicking on the link for the app say that mobile apps are simpler to navigate than mobile website. Consumers also prefer apps because they are perceived to be more efficient (i.e. shorter) load times compared to websites. More than two in five smartphone owners (46%) that chose apps say mobile apps are quicker to load than mobile websites.

In comparison, consumers who prefer to visit the mobile website are influenced by the depth and quantity of information available on mobile websites. Nearly half (46%) of all smartphone owners who prefer mobile websites say they do so because websites contain more information. Well under a third (31%) say websites are easier to navigate and even less (29%) say websites load faster than apps.

We can conclude that when activities require login, such as login to upload a picture, it would be more effective to send consumers a link to an app which they might have already installed and logged into. In comparison, if the activity requires copious consumption of information, such as reading an article, a link to the website is better suited.

Consumers have also come to assume that apps are the lite version of mobile websites. Consequently they expect the app to launcher faster and easier to navigate.

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Consumers prefer apps for quick access & mobile websites for details

Consumers prefer to use mobile apps over mobile web when time is of the essence. Nearly half (47%) of all smartphone owners in the US and the UK pick using an app over the mobile web when they want information ‘quickly’ or when they need to complete a task/transaction ‘quickly’. During moments that demand urgency, consumers are more likely to prefer using an app to opening the web browser.

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Connectivity issues with quality of available wireless or 3G networks also influences a smartphone owner’s decision to open an app vs. open a mobile browser. During times when the connectivity is poor, more than a third (34%) of smartphone owners in the US and the UK prefer to open a mobile app to a mobile browser. Mobile apps are perceived as a gateway to less detailed information and/or less resource intensive functions. In contrast nearly half (49%) of all smartphone owners prefer opening a mobile browser when they need detailed information.

Mobile web was also the preferred option when consumers were comparing options (32% vs. 19% for mobile apps), looking for inspiration (31% vs. 23% for mobile apps), and looking for something specific (30% vs. 27% for mobile apps). All three actions form part of the first two stages of a consumer’s purchase journey starting with:
1. Discovery: When they look for inspiration around what appeals to their taste and values, and
2. Influence: When they compare options they came across in the Discovery stage and look for specific information that might help them make a purchase decision.

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How big is the app market and what’s driving revenues?

Section Summary

More than nine in ten smartphone and tablet users now use mobile apps but only a third of them download paid apps. Tablet users are slightly more likely to pay for apps compared to smartphone users. Overall both segments will bring in just under $10 billion in mobile app revenues. The revenue will primarily be driven by e-book purchases. Gaming app downloads and in-game purchases are slowly catching up with e-books accounting for just over 30% of all mobile app revenues.

Key Data Highlights
  • Mobile app penetration is expected to reach 92.9% for smartphone users and 90.3% for tablet users by end of 2015, starting a period of market saturation.
  • Paid app downloaders make up just over a third of all smartphone owners as the growth of this segment will slow down to just below 4% in 2015 after reaching a peak of 50% in 2013.
  • More than 4 in 10 (44%) of tablet users and slightly more than a third (35.8%) of smartphone users will download paid apps in 2015. In actual figures, that amounts to 60.9 million tablet users and 65.2 million smartphone users.
  • Mobile app revenue from downloads and in-app purchases amounted to $8.9 billion in 2014 – up from $7.68 in 2013. The figure is expected to increase by 10.3% and reach $9.82 billion in 2015.
  • E-books are the most lucrative mobile app category with an estimated revenue haul of $4.25 billion in 2015, up from $4.07 billion in 2014. E-books will account for 43.3% of total mobile app revenues in 2015.
  • Mobile apps revenue share for games will increase from 26.4% in 2013 to 30.9% in 2015 amounting to $3.04 billion. The growth is driven by revenue from both game downloads ($1.22 billion) and in-app purchases ($1.82 billion). By 2016, in-app revenue from games will account for nearly $2 billion pushing total mobile gaming revenues to $3.31 billion.

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Mobile app penetration nears saturation as share of app buyers plateau

The growth in mobile content consumption has resulted in the near saturation of mobile app usage among smartphone users. In 2015, 92.9% of smartphone users are expected to have at least one mobile app installed on their device increasing to 95% by 2018. The corresponding figure among tablet users is 90.3% in 2015 increasing to 93.8% in 2018. As smartphone and tablet app penetration reaches saturation, the proportion of mobile device users paying for an app is starting to plateau.

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Among smartphone owners in the US, 35.8% will pay for at least one app on their mobile device in 2015, slightly lower than the 2014 figure of 36%. When we consider actual figures, the number of paid app downloaders increased from 59 million in 2014 to 65.2 million in 2015 – a 10.4% increase well below the high of 57% in 2013. The rate of growth is expected to decline to 4.2% in 2018. In other words, while the whole pie of smartphone app downloaders gradually grows in size over the next three years, the slice for paid app downloaders will stay the same.

Paid app penetration is slightly higher among tablet users in the US. More than 4 in 10 (44%) of tablet users will download at least one paid app in 2015. However, in terms of actual figures, tablet users will continue to lag behind smartphone users with an estimated 66.7 million tablet users downloading at least one paid app by 2018 compared to 76.9 million smartphone users who are expected to do the same. This is largely because the growth rate of paid app downloaders fell from a high of 28.8% in 2013 to only 7% in 2014. The figure is estimated to further decline to a mere 2.4% by 2018.

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Overall, the proportion of mobile device users who pay to download apps is set to plateau at just over 33% starting 2015 as the annual rate of growth is estimated to decline from 50.4% in 2013 to only 3.9% in 2015 marking a plateau in new paid app consumer acquisition. App creators can safely assume that their potential market for consumers willing to pay for an app is just around a third of all smartphone and tablet owners.

All figures are representative of smartphone and tablet app downloaders who pay for the download and exclude consumers who have made in-app payments for virtual goods as well as subscription services.

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E-books make up biggest share of app revenues, but games are catching up

Mobile app revenue from downloads and in-app purchases amounted to $8.9 billion in 2014 – up from $7.68 in 2013. This includes revenues from eBooks, smartphones and tablets but excludes revenues form ads and subscription services. The figure is expected to increase by 10.3% and reach $9.82 billion in 2015.

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E-books continue to stand out as the most lucrative mobile app category with an estimated revenue haul of $4.25 billion in 2015, up from $4.07 billion in 2014. However, e-books’ share of mobile revenue continues to decline from a high of 51.5% in 2013 to 43.3% by the end of 2015. It is estimated to further decrease accounting for 42% of mobile app revenue in 2016.

Meanwhile, revenue share for games has increased from 26.4% in 2013 to 30.9% in 2015. In actual figure, mobile games are estimated to bring in $3.04 billion in 2015 up from $2.61 in 2014. The growth is driven by revenue from both game downloads ($1.22 billion in 2015) and in-app purchases ($1.82 billion). By 2016, in-app revenue from games will account for nearly $2 billion pushing total mobile gaming revenues to $3.31 billion.

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Revenue from mobile video downloads now far exceed revenues from music downloads made on mobile devices. While the number of mobile video viewers (107.1 million) is comparable to the number of mobile music listeners (100.1 million), consumers are much more willing to pay to watch a video than simply listen to music. In 2015, video downloads is expected to bring in $850 million compared to $550 million from music downloads.

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How do people discover apps and what influences download?

Section Summary

Word of mouth from friends, family and colleagues play a key role in people finding out about new apps and deciding to download it. Discounts and rewards influence download of restaurant apps, while offline interaction influences download of shopping apps. Consumers also pay attention to price, description and reviews before downloading an app.

Key Data Highlights
  • More than half (52%) of smartphone owners in the US and UK say they find out about new mobile apps from their family, friends, and work buddies. Another four in ten (40%) smartphone owners discover apps while browsing the app store on their mobile devices.
  • A third (33%) of all smartphone owners in both markets download mobile apps because others recommended them. More than one in five (21%) said they downloaded a travel related app because their peers recommended it.
  • Less than one in five (18%) smartphone owners say they download a mobile app to access exclusive discounts and rewards. More than a third (34%) of smartphone owners who downloaded a restaurant or takeaway related app say they did so to access exclusive discounts and rewards.
  • More than two in five (44%) downloaded a shopping app because they either regularly use or regularly interact with the brand.
  • More than four in five (82%) say price is the top factor when deciding whether or not to download the app with consumer willing to pay the most for technology apps ($2.81) and the least for gaming apps ($1.49).
  • More than three in five (62%) say app descriptions are important and 60% say customer reviews as well as ratings are key to their decision to download the app.

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Word of mouth is the biggest enabler of mobile app discovery.

People find out about new apps through interaction with others in their social network. Offline word-of-mouth from friends, family and colleagues is the number one channel of mobile app discovery among smartphone owners. More than half (52%) of smartphone owners in the US and UK say they find out about new mobile apps from their peers, family members, and work buddies. This is not surprising since word of mouth has largely stood out as the most trusted source of information when it comes to purchase decisions.

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Browsing the app store is another prominent way to discover new apps. Four in ten smartphone owners in the US and the UK discover apps while browsing the app store on their mobile devices. App stores for iOS and Android are largely structure around categories and popularity with featured apps on the welcome screen. The list of best selling apps in both the app stores are specific to the smartphone owner’s location hence displaying popular apps within the city or country. Both app stores also have a search function allowing users to look up apps they might have heard about through word of mouth.

Besides word of mouth and the app store, web based search engines like Google and Bing are another way for consumers to find out about mobile apps. More than a quarter of all smartphone owners in the US and the UK conduct a web search to look up mobile apps they can download.

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Searching online for apps is most prominent when looking for technology related apps with more than four in ten (43%) of smartphone owners conducting a web search to discover a technology app. Consumers looking for travel apps and local apps (i.e. apps that provide localized information such as restaurants, events, places to visit etc.) are also likely to use web search to discover mobile apps. 35% of consumers looking for a travel relate app and 34% looking for a local app conducted a web search to discover their options.

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Emotional triggers drive people to download the apps they discover

Word of mouth is also the top factor influencing mobile app downloads among smartphone owners in the US and the UK. A third of all smartphone owners in both markets download mobile apps because others recommended them. Peer recommendation builds trust, which lessens the risk of uncertainty among consumers who are not sure if the app will prove to be useful, or not. The trust from recommendation also helps address fundamental barriers such as cost of data consumed to download an app as well as any security concerns smartphone owners might have.

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Most people do not have a functional and/or logical reason behind downloading an app. If it’s not trust enhancing word of mouth, then it’s the excitement generating curiosity that gets smartphones owners to download app. More than three in ten (31%) say they download an app because it sounded interesting or fun. Both recommendation and perception of fun are emotional triggers that get people to take action. Another common emotional driver of behavior is familiarity with the organization. Nearly a quarter of all smartphone owners in the US and the UK (24%) downloaded an app because they were already familiar with the company or brand.

Overall consumers do not seem to be drawn to download a mobile app on the promise of discounts and rewards that can be redeemed for an offline purchase. Less than one in five (18%) smartphone owners in the US and the UK say they download a mobile app to access exclusive discounts and rewards. However, the proportion of consumers downloading an app to get a discount was higher than average among those who downloaded app created to restaurants and takeaways. More than a third (34%) of smartphone owners who downloaded a restaurant or takeaway related app say they did so to access exclusive discounts and rewards. Just over a quarter (26%) said they downloaded the app because it was recommended to them, just behind the 28% who said they downloaded the app because they either use or interact with the brand regularly.

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Recommendation from others did not even feature in the top five factors influencing downloads of shopping app. Habit and familiarity was the top factor influencing consumers’ downloads of shopping apps. More than two in five (44%) downloaded a shopping app because they either regularly use or regularly interact with the brand. Offline engagement with shoppers is a priority in consumers’ decision to download the app. Another key factor driving app downloads was the fact that they were linked to a purchase. More than a third (34%) of smartphone owners in the US and the UK who downloaded shopping apps, did so because it enabled them to complete a purchase or a transaction. Tying mobile apps in the consumer’s purchase journey makes the app both relevant and useful.

Recommendation from others was, however, the most influential factor impacting downloads among smartphone owners who downloaded travel and holiday related apps. More than one in five (21%) said they downloaded a travel related app because their peers recommended it. As travel related purchases involve research behavior such as price comparison or reading reviewing, consumers prefer a better experience that is faster and free of errors making them prefer apps to mobile websites at times. 18% of US and UK smartphone owners who chose to download a travel app did so because they had a specific need or interest that wasn’t met by the mobile website.

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Consumer willingness to pay for apps differs by category

While word of mouth is the top influencer when it comes to app download, smartphone owners in the US and the UK also take into consideration other factors such as price, description, reviews, ratings, and the availability of a free trial/liter version before downloading the app.

Price of the app is the top among the above five factors when consumers decide whether or not to download the app with 82% saying price is important. With a range of free apps available, consumers are likely to expect most apps to be free, if not cheap. An app that costs more than it offers is likely to be perceived as ‘expensive’ turning smartphone users away from downloading it.

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The app’s description, reviews and ratings also carry much weight with 62% saying descriptions are important and 60% saying reviews as well as ratings are key to their decision to download the app. It seems smartphones owners consider all the facts made available to them on the app store to make a download decision.

When it comes to paying for an app, smartphone owners are willing to pay the most for technology apps ($2.81) and the least for gaming apps ($1.49). Surprisingly, consumers are wiling to pay quite a high figure of $2.52 for finance apps i.e. banking and payment apps, well above what they are willing to pay for local ($2.22), travel ($2.21), and social ($2.18) apps.

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Why are some apps used regularly while others are forgotten?

Section Summary

Social media apps that help people connect with others and stay in touch with their loved ones are the most likely to be used on a daily basis. Among apps that people use regularly, they pick the ones that first and foremost make their lives easier. Ease of use, design, cross-device functionality and new content also help in promoting regular use. Apps that engage in offline interaction with its users are more likely to have regular users. Consumers abandon apps largely when they lose interest in it or when it stops being beneficial to them.

Key Data Highlights
  • Slightly more than a quarter (26%) of smartphone owners in the US and the UK use mobile apps every day. The top three app categories that drive daily app usage are social (68%), gaming (46%) and media (33%).
  • People use apps regularly if it makes their life easier (63%), is intuitive to learn or comes with clear instructions (63%), has appealing design (57%), works seamless across devices (57%), provides new content (45%), and offers offline interaction with the brand (43%).
  • More than one in five (22%) apps get abandoned after installation. The most likely app category to get abandoned is travel and holiday (33%) followed by shopping (18%) and restaurant or takeaway (17%).
  • More than a third (36%) of smartphone owners regularly use apps when the reason for downloading it was regular interaction with the brand.
  • The top three reasons why people abandon apps are loss of interest in the app (34%), no longer in need for the app (29%), and realizing the app is not as useful as they initially thought (24%).

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Consumers regularly use social networking, gaming and media apps

Slightly more than a quarter (26%) of smartphone owners in the US and the UK use mobile apps every day. The top three app categories that drive daily app usage are social, gaming and media – all are ideal for leisurely consumption during one’s downtime.

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Daily app users overwhelmingly use apps to connect with their peers and family. Social and communications apps such as messaging apps, Facebook, Instagram, Twitter etc. are the most likely to be accessed on a daily basis. It is not surprising to find that nearly 7 in 10 (68%) daily app users access social and communication apps because the smartphone at its most fundamental is a communication device used to connect with ones social network.

Gaming apps are the next most likely to be accessed on an everyday basis with nearly half (46%) of all daily app users in the US and the UK accessing at least one gaming app everyday. Gaming apps have emerged as a convenient way for smartphone users to pass idle time during commute or while waiting for something/someone. Accessing gaming apps for short periods of time over the day is also a popular leisure activity smartphone users engage in to relax their minds. The social aspect of gaming apps, which allows users to compete or collaborate with friends, is also a strong driver behind why consumers keep coming back to gaming apps on a daily basis.

A third (33%) of all daily app users access media and entertainment apps, which include video streaming apps, like YouTube and Netflix or branded apps from HBO and Marvel Studios. This also includes music streaming apps like Spotify and music library apps like iTunes. It’s not surprising to see media apps stand out as the third most likely to be accessed on a daily basis as the smartphone has long been replacing MP3 players as the choice of portable music player among consumers. The key difference between the two has been the availability of streaming apps that does not require consumers to load or transfer their music library from the PC/laptop to their mobile devices. The share of daily media app users is likely to increase as consumers increase video consumption on their smartphones.

Less than one in five (19%) of daily app users in the US and the UK access retail and shopping apps. Unlike social, gaming and media apps, retail apps are highly functional i.e. consumers need a specific objective such as buying a product or comparing prices that drives them to open the app. The lower likelihood of opening a shopping app during one’s downtime results in a lower incidence of app access even among daily app users.

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Consumers prefer apps that benefit their lives after a short learning curve

Smartphone owners in the US and the UK go back to apps that are not only relevant to their lives but also provide a tangible benefit. More than 3 in 5 (63%) smartphone users say that they regularly use apps that make their lives easier. Social and communication apps stand out as the top category that makes consumers’ lives easier because they help people connect with loved ones when needed.

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An identical share (63%) of smartphone users in the US and the UK also frequent apps that are either intuitive or provide clear instruction on how to use it. A shorter learning curve allows users to focus on the benefits they can derive from the app instead of spending time and effort trying to learn its various features. Consumers want a hassle free interface with all three top categories they use on a daily basis – social apps, gaming apps and media apps.

More than half (57%) of all smartphone users in the US and the UK credit appealing design and aesthetics as a key reason they keep coming back to the app. This is specifically true of gaming apps where consumers are pleased to not only see attractive visuals but also engage with in-game characters. An equal share (57%) of smartphone owning consumers also prioritize cross device experience when deciding which apps they would like to use frequently. Apps that provide a consistent experience across smartphone, tablets and possibly laptops/desktops have a greater chance of being used often by consumers.

Availability of new content attracts just under half (45%) of all app using smartphone owners in the US and the UK to keep coming back to an app. The role of offline brand interaction is also important in driving app usage. More than 2 in 5 (43%) of all app users say that they are more likely to frequently use an app from a brand they interact with offline. There is an opportunity for brands that sell via retail stores to drive higher app engagement.

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Consumers are most likely to forget about travel and holiday apps

Downloading and installing an app does not guarantee continued usage. People are prone to forget about the apps they download leaving them unused on their smartphones. More than one in five (22%) of apps are abandoned after installation among smartphone owners in the US and the UK. Abandoning of apps is common when consumers might have been driven by functional reasons to download the app such as a discount or as part of an offline transaction. There is very little in the way of emotional connect with the app and its content making the consumer more likely to forget about the app after the initial interaction.

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Travel and holiday apps are the most likely to be forgotten by consumers – more likely than the average forgotten app. Smartphone owners in the US and the UK abandon a third (33%) of travel and holiday related apps. This is not surprising given that most consumers look for travel and holiday related apps only when they are planning their vacation or while traveling. Once the occasion is over and people return home, back to their daily routine, the apps are of little relevance to them. The next time they are likely to use the app again is when they plan their vacation or are on the road.

In comparison to travel and holiday apps, smartphone owners in the US and the UK abandon less than one in five shopping (18%) and restaurant or takeaway (17%) apps. The lower incidence of forgetfulness with the two app categories is likely down to frequent usage among users of the apps on a weekly or monthly basis.

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Consumers remember apps when they interact with the brand offline

The tendency to abandon apps is closely related to why consumers download apps in the first place. If the initial driver to download an app is a powerful sensory and emotional experience, such as an offline interaction with the brand, consumers are less likely to abandon the app going forward. More than a third (36%) of smartphone owners in the US and the UK said when the reason for downloading an app was regular interaction with the brand, it brings them back to the app regularly as well. In other words, brand loyalty in real life extends to digital platforms.

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Consumers are also more likely to regularly use an app if they consciously opted for the app over visiting a mobile website due to the former’s better user experience. Nearly one in five (19%) smartphone owners in the US and the UK say that they regularly use apps they downloaded because the experience it allowed them to fulfill needs ignored by the mobile website. The positive stimulus of a successful experience is strong enough to bring consumers back to the app.

Coercing consumers to download apps in order to complete a purchase / a transaction leads to slightly more abandonment of apps (20%) than inspires a regular usage habit (19%). The same is true for apps that consumers download thinking it sounds or look fun and interesting with 17% abandoning the app after download compared to 16% who continue to use it regularly.

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Consumers abandon apps that struggle to hold their interest & stay relevant

When consumers do abandon a mobile app, most of them do it out a lack of interest or a lack of need. More than a third (34%) of smartphone owners in the US and the UK say they abandon apps when they lose interest in the app. An overcrowded app market where consumers can see new apps emerging on a daily basis is likely the cause of low consumer interest in mobile apps. Mobile apps need to differentiate themselves from the crowd in order to stand out and hold consumer interest.

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Apps that are highly circumstantial in nature, such as travel apps or apps downloaded during emergencies are likely to get abandoned once the occasion passes. Nearly three in ten (29%) of smartphone owners in the US and the UK say they abandon apps because they no longer need it. Apps that become relevant during specific situations need to extend their portfolio of features and services to include parts of a consumer’s life that are more mundane and periodic.

Consumers are more likely to find an app does not meet their usage needs. Nearly a quarter (24%) of smartphone owners in the US and the UK abandoned an app because they found it was not as useful as they had thought it would be. This gives a big opportunity for app providers to learn from apps that let consumers down and release a better alternative. Nearly one in five (18%) of smartphone users abandon an app because they find a better or more useful app that meets their needs.

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How can apps re-engage lost users?

Section Summary

Discounts, coupons and other monetary awards can help apps re-engage lost users, however a more sustainable approach is to win them back through peer influence. People who see their friends, family and colleagues use an app are more likely to keep using the app in the long run. Discounts and coupons work best with retail, travel and local apps in situations when customers are more price-conscious than usual.

Key Data Highlights
  • The top three tactics to re-engage lost app users are offering discounts and coupons towards their next purchase (30%), offering exclusive or bonus content (24%), and seeing family, friends or colleague use the app (21%).
  • Discounts and coupons are the most effective tactic in re-engaging lost customers for retail apps (47%), travel apps (40%) and local apps (37%).

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Discounts re-engage lost users but recommendation grows engagement

Discounts and coupons are the most effective way to motivate consumers to re-engage with mobile apps they have forgotten about. Nearly a third (30%) of all smartphone owners in the US and the UK who have abandoned mobile apps say that a relevant discount or coupon applicable towards their next purchase would get them to re-open the abandoned app. While a timely offer might attract the value conscious consumer for the upcoming purchase, it does not guarantee they won’t forget about the app again because the re-engagement is only circumstantial i.e. the app stays relevant for the next purchase but is likely to be forgotten again.

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A slightly more sustainable tactic to re-engage a lost mobile app user is to launch exclusive or bonus content. Nearly a quarter (24%) of all US and UK smartphone owners who have abandoned mobile apps return to using a forgotten app when they see it gives them access to exclusive or bonus content. While the appeal of exclusivity can attract curious consumers, it needs to be both relevant and useful for the target consumer to be able to create a lasting emotional connection. The downside of relying on exclusive and bonus content for re-engagement is the constant need to create and publish new content for each consumer segment.

The most sustainable way to re-engage app users who have forgotten about the app is to influence them indirectly via their friends, family and colleague. More than one in five (21%) of smartphone owners in the US and the UK who have abandoned apps on their smartphones say that seeing their peers use the app gets the to start re-using the app on a regular basis. A trusted person using the app can show consumers the benefit of the app, which they might not have discovered, in their first attempt. It also creates a sense of community where consumers do not feel they stick out as the solitary user of the app. The emotional rewards of belonging can create a lasting impact on consumer minds keeping them loyal towards the mobile app.

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Discounts are effective in winning back users for retail, travel & local apps

Discounts are the most effective tool to re-engage lost app users for retail, travel and local apps. Retail apps refer to any shopping related app where discounts and coupons can lead to a higher incidence of purchase either via mobile, desktop/laptop or in the store. Nearly half (47%) of all smartphone owners in the US and the UK who had abandoned a retail app said they were likely to re-use the app if given a discount or coupon towards the next purchase. Discounts have a natural fit with retail apps as consumers mostly think about the apps in the context of purchasing an item.

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Like retail, travel is another category where consumers think about mobile apps if and when they need it. It is also a category where consumers look for deals and discounts. Two in five (40%) of all smartphone owners in the US and the UK would start re-using a travel related app if it offered relevant discounts towards their next trip or vacation. Travel related apps could offer discounts towards hotel reservation, travel tickets or sightseeing activities. Mobile apps can further localize deals based on consumer destinations. One way of developing sustainable app usage is to couple discounts with inspiration that offers ideas regarding their next trip.

While travel apps help consumers when they are visiting a new place, local apps help them find places to visit, events to attend and restaurants to check out in their hometowns. This is another part of consumer life where they actively look for discounts and offers. More than a third (37%) of all smartphone owners in the US and the UK would re-engage with a local app if given the right discount or offer towards their next local outing with friends and family. Local apps have a greater chance of keeping the price conscious consumer engaged, as they are likely to be accessed periodically such as every weekend.

In comparison to retail, travel and local apps, less than a quarter (24%) of all smartphone owners in the US and the UK would re-use an entertainment app if offered a discount or a coupon towards their next movie or music purchase. Even less (16%) would re-engage with a gaming app. For both entertainment and gaming apps, the quality of content as well as word of mouth from peers plays a bigger in winning back lost consumers.

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How can mobile apps grow user loyalty?

Section Summary

Apps that engage with their users are more likely to retain their customers in the long run. Apps can engage with users over messaging apps, which have the highest retention rates among all app categories. Customers prefer to engage with apps via Kik, Facebook messenger and Snapchat.

Key Data Highlights
  • Apps can interact with their users retail more than half (57%) of them one week after the download compared to apps that do not interact with users who retail only a quarter (25%) of its users in the same time frame.
  • Messaging apps are ale to retain more than three in five (62%) of its users twelve months after the download compared to more than one in ten (11%) for all app categories.
  • Nearly one in five (19%) of smartphone owners have engaged with brands via messenger apps especially Kik users (26%) and Snapchat users (21%).
  • Young people are willing to interact with brands over messenger apps – especially young graduates and professionals (57%) and college students (50%).
  • Consumers prefer to engage with brands via Kik (30%), Facebook messenger (23%) and Snapchat (23%) the most.

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Mobile apps that reach out to users boost their long-term loyalty

Not many apps can maintain a loyal user base. The average retention rate for mobile apps worldwide is 32% just one week after download i.e. less than a third of consumers continue to use a mobile app a week after downloading it. At the 12-week mark, the share of regular users drops by almost three times to 11%. In other words, mobile apps that gain new users through promotions can expect to lose 89% of those customers by the end of the quarter.

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One way to boost app retention is to interact with users once they have downloaded the app. Among apps where the developers or brands reached out to users within the first week of download, the average retention rate was 57%, compared to 25% for those with no interaction. Communication from the app to the consumer reminds people of the app they downloaded and keeps it top of their minds. More useful communication such as tips on how to get the most out of the app can also increase its relevance with consumers. Continued communication can increase retention rates by more than three times in the long run. After 12 weeks, mobile apps that interacted with users saw a retention rate of 25%, compared with only 7% for apps with no interaction.

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Mobile messenger users are loyal and frequent users of the app

Mobile messengers score high on retention rates compared to all other mobile apps i.e. downloaders keep coming back to messenger apps to use it while other apps get forgotten. In January 2014, one month after downloading an app, 68% of downloaders were still using a messaging app compared to 36% for all other apps. Twelve months later the gap widened as 62% of the downloaders were still using the messaging app compared to only 11% for all other apps.

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SMS has been one of the most popular and frequently used mobile services in the last 20 years. So it is not surprising that its replacement – mobile messengers – is garnering a loyal audience five times the size of all other apps. Already people are accessing their messaging apps almost 9 times a day on average – nearly twice as much as they access any other app.

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App makers can reach their users on messaging apps

As it turns out app developers and publishers who want to replicate the loyalty commanded by messenger apps should turn to those apps and interact with their users. Nearly one in five (19%) smartphone users have chatted with a brand directly, with Kik users reporting the highest incidence of direct brand engagement at 26% followed by Snapchat at 21%.

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College graduates and young professionals are more receptive to direct brand engagement, with 57% of 21 to 25 year olds saying social and messenger apps are an important source of brand information. More than two in five (45%) in this demographic also said they wished they could directly speak with a brand instead of simply following or liking it. College students in the 18-20 year old demographic followed in both categories at 50% and 44% respectively.

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Kik users also report the highest interest in direct brand engagement with 30% saying they’d interested to talk to brands via messaging apps followed by Facebook and Snapchat – both at 23%. Kik was the preferred messaging app to engage with brands among 21-25 year olds with 35% picking Kik ahead of other apps. 18% of 18 to 20 year olds picked Instagram while 14 to 17 year olds would like to connect with brands on Twitter.

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Kik users spend 35 minutes per session using the app, ahead of Facebook Messenger (27 minutes), and Snapchat (21 minutes). This figure is comparable to Facebook where users spend 37 minutes per session and easily beats Instagram and Twitter, which keep users engaged for 27 and 25 minutes per session respectively.

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References

1. Mobile App Marketing Insights: How Consumers Really Find and Use Your Apps
2. App-nesia in the UK: The need for app re-engagement marketing
3. Mobile Content and Activities Roundup
4. The guide to Customer Retention for Mobile Apps
5. Messaging Apps: The New Face of Retail Banking
6. Messaging Apps Match Social Networks for User Engagement

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