Retail-branded applications are slowly climbing the ladder of omnichannel commerce with more transactions over the past holiday season, according to a recent report from Baynote.

Relative to 2012, there was a 48 percent increase in holiday purchases made on a retail-branded app in 2013. In such a crowded ecosystem, retailers are struggling to get consumers to download their apps and return frequently, but Baynote’s “Annual Holiday Online Shopping Survey” shows some retailers are starting to figure it out.

“There are two reasons [why more consumers are making purchases from retail-branded apps],” said Marti Tedesco, senior director of corporate marketing at Baynote, San Jose. “The first is that we believe that retailer apps have gotten better over the year.

“Initially apps were a subset of the site experience and now they more accurately reflect a consistent brand interaction that is similar to the Web site, so shoppers aren’t having to master a different experience or interface,” he said.

“The second reason is that we believe that the designs of these apps have become more responsive and are more accessible on mobile devices.  These responsive designs coupled with the growth of shopping via smartphone would naturally result in an acceleration of app usage.”

The fourth Annual Holiday Online Shopping Survey surveyed 1,000 United States online holiday shoppers following Cyber Monday 2013.

Branded apps
While there is definitely room for growth, consumers are beginning to view retailer-branded apps as viable shopping sources as opposed to mere search and discovery outlets.

Last year only 23 percent of consumers made a purchase via a retailer-branded app over the holidays, and this year that increased to 34 percent.

Additionally, the percentage steadily increases for younger consumers. Forty-seven percent of consumers between the ages of 18 and 24 made a holiday gift purchase using a retailer-branded app, as did 43 percent of those ages 25 to 34 and 41 percent of those ages 35 to 44.

On the other hand, only 26 percent of consumers between 45 and 54 made a holiday gift purchase using a retailer-branded app, and 22 percent of consumers above age 55 did so.

To drive these percentages even higher, retailers need to ensure quality experiences in their apps.

“In general, shoppers want to feel recognized, known and have a great customer service experience,” Ms. Tedesco said. “To the extent that an app can offer this as well as the site or in- store experience, then all the better.

“Retailers need to make sure that all of their sales channels are equally empowered through the backbone of their ecommerce site to offer consistency and excellence,” she said. “If information is readily available on an app or the Web site, that information should be accessible to a store sales person as well so that all channels – site, app and store — are well positioned to assist the customer and make sure they have that feeling of great service.”

Added value
The challenge with retailer apps is providing enough reason for a consumer to download them. Third-party shopping apps provide value in that they aggregate products from multiple retailers, allowing consumers to compare different retailers.

Retailer-branded apps however need to find their own way to provide added value to provide enough incentive for a consumer to download the app as opposed to simply visiting the mobile Web site or a third-party app.

“It’s really hard to compete against those social companies [like shopkick and RetailMeNot] because they aggregate across multiple retailers, so it’s difficult for a consumer to go to Macy’s, Old Navy [or The] Gap and worry about opening every app, so there has to be more incentive for the consumer to actually want to open the app and engage,” said Sheryl Kingstone, Toronto-based research director at Yankee Group.

“I think it’s really around more of loyalty,” she said. “If you create more rewards, more reasons to open the app, bring in loyalty programs, then you’ll have an incentive to reengage, open the app, put in the coupons, put in the personalized offers.

“The problem today is that a lot of retailers are keeping it just as a shopping mechanism and not bringing in loyalty programs, and once we start doing more of that then we’re going to see it engaged more frequently. There will be reason to go back to check your balance and loyalty account.”

Final Take
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York