Today, people shop whenever they feel like it. Brick and mortar stores are finding it hard to sustain their business just by relying on foot traffic.
With increasingly more retail customers switching to online alternatives for their shopping needs, retail businesses might want to leverage on different digital channels to stay up to trend.
And one popular way to adapt to such changes in consumer behavior is by developing mobile applications.
In this article, we will explore a few unique ways that retail businesses can stand out with the different app functionalities mentioned.
6 ROI-Driven App Functionalities
Most E-commerce apps (such apps are called M-Commerce Apps) give customers or users the same feeling: BORED and non-incentivising.
This makes users feel that there’s no difference in buying from the app, making such app development a waste of money.
Therefore, it is important to have intriguing and incentivising functionalities in the app that will pique the users’ interests to continue using the app.
Here are six of the most important app functionalities for retail businesses:
- Promo Codes
- Referral Program
- Loyalty Program
- Membership Tiers
- Purchase Tiers
- Purchase Reminder
Promo codes are special strings of unique codes given to users to redeem a promotion. Most of them give you either a flat value discount (like $5 off) or a percentage discount (like 10% off).
This promotional functionality is by far one of the best app user acquisition strategies that help m-commerce apps grow their user base fast.
By offering discounts, it serves as a motivating factor for users to download the app and make a purchase.
Such an acquisition method is widely used by food delivery services such as FoodPanda and Grab because it is really effective for enticing and converting people into their app users. For instance, you will often see promotions stating “Get $15 OFF on your first order on the app”.
After their first use, you gain the ability to send them push notifications and further promote your other products and services.
Referral programs incentivises mobile app users to invite their peers to download in exchange for rewards.
Such referral systems in mobile apps are known to help companies expand fast due to its high virality potential. One success story would be Dropbox, where they saw a 60% increase in their users in 2010 due to referral programs.
In a typical referral flow, an existing user shares their referral code to his friend, and when the peer downloads the app and key in a referral code, both of them will be rewarded with further product discounts or unlock premium app functions.
For example, ride-hailing apps like Grab and Uber have done an excellent job in user referral programs to increase their user base. They were offering three $5 discounts rides for first-time users, which led to an exponential growth in their user base in a short time.
However, it is important to note that both the referee and the referrer should be rewarded. This motivates the referrer to share the app with his peers, and the referee to download and use the app.
Loyalty programs are programs that collect points for users as they spend in the app.
It is the exact system that miles operate on.
The reason why loyalty programs work is because it tweaks the perception of consumers – when we are rewarded for spending, we are more incentivised to spend.
App developers can integrate the loyalty systems in the app to let users redeem for a certain discount of reward in the app after spending an amount.
For example, every dollar you spend in the app gives you 10 points. And every 1000 points entitles you to a $5 discount on your next purchase. Put simply, every $100 you spend in the app gives you $5 off your next purchase.
This builds an intrinsic motivation in users that entices them to come back to the same store. In some cases, they may even invite their friends to achieve a certain target and to claim better rewards.
Slightly linked to the last point, as users spend money in the app, they can also be rewarded into membership tiers. For example, bronze, silver, gold tiers that represent what kind of membership status that the user is in.
Different membership tiers often give users different rewards or a certain advantage. This makes users stay motivated to spend in the app so that they can maintain or achieve a certain level of membership.
Membership tiers are a form of gamification in the app because users feel like they can “level up” and go to the next level. A good example will be Grab where there are green, silver, gold and platinum members. It is stated that platinum members will get more discount and faster bookings. This will keep a proportion of users wanting to achieve the platinum level and also stay at a platinum level for the benefit that it brings.
Purchase tiers are most commonly seen in E-commerce mobile apps.
The purchase tier functionality increases the average basket value by motivating users to order more in a single purchase.
This is because different purchase tiers entitle users to buy more as they might perceive the larger basket of items to be more “worth it” due to bigger discount values.
For example, when the cart has $100 worth of products, they will get a 1% discount, and when it has $200, they will get a 2% discount, etc.
By developing and integrating purchase tiers in the mobile app, users will spend more on a single purchase, cutting the logistics cost for a retail store.
However, such a function requires app consultants to work out a comfortable margin for the company to design the purchase tiers suitable for the company and its business model.
People often add products into their carts and get disrupted half-way through the buying process.
Purchase reminders help notify users who added products into their carts but did not checkout.
By notifying the user of their pending items in the cart, we create a sense of urgency in the users to buy products.
This has been proven very effective in getting extra sales based on the E-commerce that we have built so far. By sending emails or push notifications to customers, they will recall that they have left items in the cart and make the purchase.
These strategies and tactics are key in helping retail businesses grow their customer and user base.
As mentioned, it is key to have application functions that make it interesting for the users.
At SleekDigital, we are able to sit down with our clients and come up with functionalities that are best suited for our clients based on their business models and business situation. Contact us for a consultation on how we can help you stand out from your competitors today!