“Shopping apps see a much higher lifetime value in return app spend in iOS users” – Sue Azari, AppsFlyer

CNME Editor Mark Forker spoke to Sue Azari, eCommerce Industry Lead at AppsFlyer, in an effort to better understand the user behaviour driving change with the eCommerce mobile app space, why businesses see more long-term value with iOS users compared to Android, the factors driving the return of paid marketing campaigns – and how businesses can achieve the customer loyalty they want through a seamless CX.

Sue Azari is an e-Commerce industry lead at AppsFlyer.

AppsFlyer is one of the world’s leading players in mobile attribution and analytics, and its platform has been specifically engineered to help marketeers make better informed decisions in the constantly evolving industry vertical that is the e-commerce mobile app space.

Over the last decade, Azari has established herself as one of the brightest minds in the global eCommerce mobile app marketplace.

Azari’s day-to-day role is to empower eCommerce businesses to scale their mobile applications, and she provides them with the best practices for app growth and retention strategies in what is an ultra-competitive and extremely volatile marketplace.

In a candid and fascinating discussion with CNME, Azari brilliantly articulated some of the key findings from the 2024 State of eCommerce App Marketing Report that was commissioned by AppsFlyer.

Android v iOS

Azari began the conversation by interestingly highlighting how many eCommerce businesses see a much higher value in iOS users compared to Android.

“Typically, what we have seen in the marketplace, and what has surfaced from speaking directly to shopping applications, is the fact that they see a much higher lifetime value in return app spend for users that are on iOS. The data clearly indicates that over time, iOS users are likely to spend much more than those using Android devices. The other thing that we have been able to identify, which we believe has been aided by the economic recovery we have enjoyed of late, is a 21% spike in in-app purchases on iOS in Q4 of 2023, versus 9% on Android,” said Azari.

Azari stated that the data was indicative that end-users on iOS devices where spending much more on apps versus Android users, and also highlighted that this trend was also reflected in budgets.

“We also saw that marketing budgets in Apple’s platforms jumped by 43% in contrast to Android, who actually saw their spend decline by 18%. It is really interesting because the marketing spend overall has increased, but it has been weighted way more towards iOS, and it has actually dipped quite significantly on Android, and we believe that’s because those that are investing in paid media for apps in the shopping space just see much higher value and return from iOS users. So they are shifting their spend towards them, and it is becoming a bit of a self-fulfilling prophecy off the back of that – and they are then seeing a growth in installs and in-app purchases.

Azari added that the alleviation of privacy concerns with iOS has also been a factor in this market upsurge.

“I think in the past there has been a lot of nervousness and uncertainty on iOS because of changes in the privacy landscape post iOS 14. However, I think the fact that people now have more confidence in terms of the measurement that is now available on iOS, has resulted in businesses investing more in iOS, and are shifting more to iOS rather than Android,” said Azari.

Customer Experience:

Many analysts have labelled the current climate as the ‘experience economy’.

As consumers, we now demand convenience and expect a seamless customer experience, if businesses fail to deliver good CX then it could be the death knell for them as an entity, such is the competitive nature of eCommerce.

Azari said that in order to achieve that customer loyalty that businesses crave, it is imperative your strategy is built around customer experience.

“I think the most fundamental component for brands in terms of achieving customer loyalty is all around user experience. Businesses that have a really slick onboarding experience are going to be successful. If end-users can go from install through to adding items to the basket and then checking out as seamlessly as possible, then businesses are on to a winner. But that’s easier said than done. Businesses can enable this seamless experience by integrating mobile payment options such as Apple Pay into the purchasing experience. In addition to this, they can have biometric logins to avoid having to manual create logins to access your account via a password. Having all these elements serves to enhance a seamless end-user experience, and that is key to holding on to your customers and building that customer loyalty element,” said Azari.

Azari also disclosed that 70% of shopping carts are abandoned at checkout, which only serves to reinforce how important it is for businesses to deliver a seamless experience.

Azari also touched on the importance of reengagement campaigns.

“Reengagement campaigns are also very important in an effort to bring users back into the apps. So you need a strong marketing strategy around that to make sure your engaging users, and at the same time are attracting new users to your applications. In addition to this, some interesting things that I am starting to see are paid for loyalty programs, which sort of replicates the Amazon Prime model. In the US, Target just launched a membership program for $99 per-year, and that gives users things like free next-day delivery, perks on your birthday, and points. I think businesses who make it very clear to end users what they are getting back for their purchases are going to do well. Price can be a factor, but it is also about how you are being rewarded for that, and often that is through points, product exclusives, early access, and cheaper delivery options,” said Azari.

Meta V TikTok:

Azari said that another interesting feature of their comprehensive State of eCommerce App Marketing Report was the return of paid marketing campaigns.

She highlighted how many companies built their success off the back of a platform such as Meta, but over the last few years the investment in Meta exclusively has declined, and there has been much more diversification of marketing spend across different platforms.

“There was a huge number of companies that built their success on Meta, certainly that was the case around 4 or 5 years ago, before some privacy changes kicked in. The advantage Meta provided back was from a demographic targeting point of view from within the platforms. However, as that data has become more restricted, we have seen quite a bit of pullback from investing so heavily in just one platform like Meta, and because competition is so fierce, businesses rely on paid media budgets to help them stand out. What’s interesting is that we are seeing them diversify across more channels, so they will still work with Meta and Google, but we are seeing more investment now in the likes of TikTok, Pinterest and Reddit, which we would call demand-side platforms. There has been a huge investment in the gaming space overall, so businesses in general are really diversifying where they put that put that different media spend into different platforms to try and reach different audiences,” said Azari.

Azari also revealed that companies like Temu and Shein have triggered what she described as a ‘mobile-first’ shopping experience.

“I read a report a few months ago that revealed Temu and Shein spent almost $150m per-month on Meta alone. The added benefit of this type of investment is it provides this sort of Halo effect for other brands, because what we have seen in other markets is Temu and Shein are app first, they don’t have a transactional website, or offline store. So, in turn they are really promoting this mobile-first shopping behaviour – and that means brands are starting to capitalise on that, and as a result are starting to invest more in things like Apple Search adverts in order to capture that intent within the app store. We have also seen that almost 75% of conversions within shopping apps are via remarketing campaigns, so that just serves as a further indication of how important it is that they bring users back to the app,” said Azari.

Azari said she was pleasantly surprised by data from the report which indicated that 60% of first-time buyers will make another purchase.

“What jumped off the page at me from the report was the data which showed 60% of first-time app buyers will buy again, and that’s so much higher than I thought it would be. That’s fantastic for e-commerce brands – because it shows you just how important securing that first purchase is in creating that customer loyalty. That data also enables you to remarket them with an upsell, or cross-sell campaign that is personalised to them. I think this data shows positive signs to anybody in the shopping app space that if you can do everything you can to drive that first purchase then it’s going to much easier to try and bring them back,” said Azari.

UAE:

Azari concluded a brilliant discussion by documenting the differences between the UAE e-Commerce mobile app marketplace to that of Europe and North America.  

“The UAE, Saudi Arabia, and Egypt have consumer engagement on apps that are 1.6x times higher than that of developed markets like Europe and North America. So, the Middle East, including the UAE, massively over-indexes in terms of mobile usage which is amazing, and I feel there is more of this mobile-first approach across the GCC region in comparison to Europe and the United States. I think the Middle East, and the UAE in particular is really leading the way for that mobile-first shopping experience, and I think they do the loyalty perspective very well too. They use lots of QR codes in-store to be able to drive users to be to download and use the app, so they do the whole omni-channel approach brilliantly, with apps sitting central to all of that,” said Azari.