Mobile Shopping: User Acquisition Trends and Benchmarks 2016 1

User Acquisition Trends and Benchmarks 2016

MOBILE SHOPPING

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 2

User Acquisition Trends and Benchmarks 2016

MOBILE SHOPPING

Introduction

Shopping App Costs and Conversion Rates

Shopping App Engagement by Gender

Shopping App Engagement by Operating System

Monthly Trends

Mobile Shopping Behavior

Conclusion

3

4

5

6

7

13

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Mobile Shopping: User Acquisition Trends and Benchmarks 2016 3

Introduction

Every day, more and more consumers are making purchases on smartphones and

tablets. In 2015, shopping apps accounted for $40.58 billion in sales as consumers

spent 55.3% more time shopping on mobile devices than computers. In fact, shopping

apps became so popular in 2015 that Apple created a new Shopping Apps category in

the App Store.

With shopping apps for every consumer’s wants and needs - from huge retailers like

Amazon and eBay to specialized apps like Touch of Modern, SeatGeek, and Rue La

La - shoppers have made mobile shopping the new normal. According to eMarketer, in

2016, U.S. smartphone purchases are expected to increase by 49.9%, accounting for

32% of all eCommerce sales.

Mobile shopping is only expected to grow more popular in the future, with U.S.

smartphone sales projected to reach $129.44 billion by 2020. In order to attract the

shoppers who will make those purchases, advertisers will spend heavily on user

acquisition. The U.S. retail industry will spend more than $15 billion on digital ads in 2016,

up from $13.13 billion in 2015. Mobile ad spend will continue to increase in the coming

years, as shopping apps vie for a larger share of the growing mobile commerce market.

To better understand the user acquisition trends of shopping apps, including costs and

conversion rates by season, gender and operating systems, we examined 5.4 billion ad

impressions, 1.4 million app installs, and 31k post-install registrations and first-time purchases.

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 4

Shopping App Costs and Conversion Rates

The average cost to acquire a new shopping app user who installed and successfully

completed a first purchase was $113.74, with an install-to-purchase rate of 4.3%.

Purchasers averaged 3.4 purchases within six months of installing the shopping app,

with the first two purchases completed in the first two weeks. The average order size

per purchase was $68.00, returning a positive ROI within two weeks of installing the

app.

Not surprisingly, the cost to acquire a user who registers for an account in a shopping

app was significantly lower than the cost per first purchase, coming in at $5.92, with

an install to registration rate of 56.8%.

Shopping App Engagement

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 5

Shopping App Engagement by Gender

Acquisition costs and engagement rates for mobile shopping apps varied between

men and women. Women, who were just 1.4% more expensive to acquire than men,

were 26.8% more likely to complete a purchase. Female users were also 10.4% more

likely to register for shopping apps than men.

Shopping App Engagement by Gender

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 6

Shopping App Engagement by Operating System

The cost to acquire an iOS user who completed a first purchase was $150,

compared to $85.10 for Android users. While iOS users were more expensive to

acquire, they were also 82.5% more likely to install and make a purchase than

Android users, meaning the volume of shoppers on iOS was much larger. In fact, on

Thanksgiving in 2015, nearly 80% of all mobile purchases were made on an Apple

device. iOS users also spent more money in shopping apps, averaging 2.7x more

spend than Android users on a monthly basis.

Android users were more likely to engage in non-transactional events in shopping

apps than their iOS counterparts. 52% of all Android users who installed a shopping

app went on to register, compared to 43% of iOS users.

Shopping App Engagement by Operating System

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 7

Monthly Trends

The Seasonal Impact on Shopping App Engagement

Not surprisingly, seasonality has a major impact on shopping app user acquisition

costs and conversion rates. From May 2015 - April 2016, we see two distinct peaks

in acquisition costs, in July ($144.60 per first purchase) and December ($148.76

per first purchase), both big months for shopping. July is widely recognized as

the month that back to school shopping begins, while December is peak holiday

shopping season.

During the months that aren’t traditionally known for shopping, acquisition costs

dropped to their lowest. In September, the average cost per first purchase fell to

$87.25, while in March costs decreased to $88.54. September and November

turned out to be two of the best months for user acquisition, as costs were at their

lowest and install-to-purchase rates were high at 5.8% and 4.9%, respectively.

November also plays host to the biggest mobile shopping weekend of the year,

when consumers spend more than $7.5 billion between Thanksgiving Day and

Cyber Monday. The massive amount of money spent by consumers in November

gives retailers a huge incentive to invest heavily in user acquisition and get new

shoppers to purchase in their apps.

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 8

Monthly Trends

Cost per Install by Month

The average cost to acquire a shopping app install was $4.06, but we saw increased

costs during traditionally busy shopping months due to the increased number of

advertisers fighting over a limited amount of ad inventory. During the busy back-to-

school shopping month of August, the average cost per install was $4.60. In November

and December, the winter holiday shopping season, the average cost per install

increased to $4.42 and $4.80, respectively.

Install costs were at their lowest in the off-season months of September and October.

During these months, which aren’t typically seen as big shopping periods, the average

cost per install for shopping apps got as low as $2.78.

Cost per Install by Month

The cost per install during September and October

was 29.1% less than average

$2

$3

$4

$5

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 9

Monthly Trends

Registration Costs

The cost to acquire a user who installed a shopping app and registered for an account

averaged $5.85 and did not fluctuate greatly from month to month, save for September

and October. During those two months, the average cost per registration decreased

to $4.30 and $3.89 respectively. The most expensive month for acquiring registrations

was April, increasing to $7.27, a 22.8% increase over the average registration cost.

Cost per Registration by Month

Registration costs during September and October

2015 were 30.6% lower than average

$3

$4

$5

$6

$7

$8

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 10

Monthly Trends

Registration Rates

Shopping app account registration rates were consistent throughout the year, hovering

around 60% for most of the year.

January saw registration rates peak at 66%, as Google searches for “shopping apps”

began to increase the week of Christmas and remained above average for the entire

month of January. However, install-to-first purchase rates were second to worst in

January, meaning retailers might benefit from employing re-engagement campaigns

shortly after users download to drive more purchases that month.

In February, registration rates fell to 48% and continued to decrease into March when

they hit a low of 28%. This correlated with first purchase rates, which were 63.2% below

average during the two months.

Install-to-Registration Rate by Month

20%

30%

40%

50%

60%

70%

80%

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 11

Monthly Trends

Cost per First Purchase

The costs associated with acquiring a user who completes a first purchase

are greatly affected by seasonality and peak twice during the year. In July,

a traditionally popular time for back-to-school shopping, the cost per first

purchase was $144.60. The second peak was in December amid the holiday

shopping rush, when the cost per first purchase reached $148.76.

In September, the average cost per first purchase decreased to $87.25. With

back-to-school shopping winding down, the month was a cost-effective time

to acquire active mobile shoppers who would make for strong retargeting

candidates during the upcoming holiday season.

November also made for a great month for acquiring mobile shoppers as the

average cost per first purchase was $96.35, while the average purchase size

for smartphone users was $102.20 on Cyber Monday, when consumers spent

more than $3 billion online.

Cost per First Purchase by Month

$60

$90

$120

$150

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 12

Monthly Trends

First Purchase Rates

Consumers were most likely to make a purchase in a newly installed shopping

app during the spring and summer months. In June, 6.0% of users who installed a

shopping app went on to make a purchase. In August, first purchase rates dipped

slightly to 5.7%, but users completed 61.7% more purchases than in June.

In September, 5.8% of new shopping app installs completed a first purchase, the

third highest rate of the year. Despite the fact that a majority of back-to-school

shopping is completed by the end of August, shopping apps enjoyed strong

conversion rates in September.

As 2015 came to a close, shopping app first purchase rates decreased slightly,

hitting 4.9% in November and 3.6% in December. Still, mobile devices accounted

for over 30% of online sales, a sure sign that mobile shopping is an important part

of consumers’ holiday shopping strategy.

Install-to-First Purchase Rate by Month

1%

0%

2%

3%

4%

5%

6%

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 13

Mobile Shopping Behavior

Mobile shoppers who installed a shopping app and made

a first purchase were likely to become repeat shoppers.

The average mobile shopper averaged 3.4 completed

purchases within six months of installing the app, spending

$68 per order.

Although men and women have different install-to-purchase

rates, the amount they spend per order is similar. Men

average $66.10 per purchase compared to $68.39 for

women.

The acquisition costs associated with users making a first

purchase are quickly recouped, as the average shopper

makes their first two purchases within 13 days of installing

a shopping app. The average time between install and first

purchase is 5.5 days, with the second purchase occurring

7.5 days later. Women are quicker to spend than men,

averaging 4.5 days from install to first purchase, compared

to 6.8 days for men.

A significant number of users install shopping apps with the

intent to purchase right away. 25% of those who completed

a purchase did so within 24 hours of installing the app, while

50% of shoppers made a purchase within five days.

BUY

The average shopper makes 3.4 purchases

within six months of install

3.4

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 14

Though not all mobile shoppers make a purchase within the first week of installing

a shopping app, we found that 75% of all users with an intent to purchase do so

within 17 days of installation.

Not surprisingly, registering for a shopping app account occurs even faster than

making a first purchase, with 90% of users who registered doing so within 24

hours of installing the app.

0 20% 40% 60% 80%

0 20% 40% 60% 80%

Install-to-Purchase Time

Install-to-Registration Time

Mobile Shopping: User Acquisition Trends and Benchmarks 2016 15

Conclusion

Back-to-school and holiday shopping are the two biggest periods of spending for

consumers. And with increased spending during these months comes a rush of

advertisers into the fold, driving up the cost to acquire users.

The data tells us that while spending on user acquisition during the back-to-school

and holiday seasons gets more expensive than average, the conversion rates and

sheer amount of consumer spending make it more than worthwhile. But the data

also shows us that one way to “win the holidays” is to invest in acquiring shoppers

during September, when acquisition costs are at their lowest. This gives shopping

apps the opportunity to re-engage their existing shoppers and drive low cost

conversions in the winter, when new users become more expensive.

Seasonality isn’t the only thing to consider when growing a mobile shopping

business. Knowing how long it takes the average user to make a purchase after

installing an app allows retailers to make smart decisions about re-engagement.

Finding the best moment to re-engage a new user helps improve conversion rates

and mobile revenue, because those who do purchase are likely to become repeat

shoppers.

Liftoff is a full-service mobile app marketing and

retargeting platform which uses post-install data to run

true CPA-optimized mobile user acquisition and retention

campaigns. With Liftoff, campaigns are optimized to drive

specific actions beyond the install, to acquire users who

engage in more profitable post-install events like booking

a hotel, subscribing to a service or making a purchase.

info@liftoff.io @liftoffmobilewww.liftoff.io