AppsFlyer has released the 2023 edition of its State of eCommerce App Marketing report. An in-depth look at key global industry trends to guide retail marketing community in building a mobile-first experience. The report explores how the industry is expected to drive engagement and sales for the second half of 2023, especially during the peak holiday season.
The report notes that retail marketers continue operating in an uncertain economic landscape. Last year’s Q4 holiday shopping season, saw more in-app purchases by consumers compared to Q4 in 2021. Consumers spend in shopping apps climbed 37% in Q4 2022 compared to Q3 2022. It represents a 30% higher than the rise in 2021 over the same period.
On average, retail apps generated 10% more revenue in the peak shopping month of November 2022 compared to November 2021. Additionally, In-app purchases (IAP) remained high throughout the entire holiday season. This suggests retailers have focused on attracting customers with early discounts and continuous holiday season incentives. As a result, shoppers are making return visits to their favourite shopping apps. They are also making repeated purchases, which drove shopping’s economic engine.
According to Sue Azari, Industry Lead for eCommerce, AppsFlyer, “Shopping spends increased 81% on Apple’s iOS. It also increased 61% on Google Android on Black Friday of last year compared to the daily average in November. This highlights how critical this period is for eCommerce apps.
“Marketers looking to capitalise on the critical shopping days in November should start planning now. This includes organising user acquisition campaigns in the months leading up to Black Friday to benefit from the more affordable costs during this timeframe. Additionally, using remarketing strategies to guide users to the app to keep them engaged until those peak sale days.”
Key Global insights
- In-app consumer spend increased 81% on Black Friday 2022. This compared to the daily average in the month of November, with Android averaging 61% higher.
- eCommerce marketers spent $4.9 Billion on attracting app users worldwide in 2022. The economic downturn led to a 25% drop in spend in H2 2022.
- Apple iOS apps had an 85% higher share of paying users compared to Android. November conversion rates were 15% higher compared to the monthly average on both iOS and Android platforms.
- Cost of Media in the eCommerce vertical has significantly dropped 30% YoY when comparing Q1 of 2023 to Q1 of 2022.
- Marketers’ customer acquisition costs, measured in Cost Per App Installs (CPIs), peaked in November 2022. It dropped 30% compared Q1 of 2023 to Q1 2022 – more specifically, decreasing 33% on iOS and 11% on Android.
- Marketing-driven non-organic installs (NOIs) rose 19% on iOS thanks to a drop in CPIs and increased confidence in measurement in the post-iOS 14.5 app environment.
- Marketers are focusing on remarketing as it remains a vital and cost-effective component of the global marketing landscape. Consistently boasting a share of over 40% monthly.
Key US insights:
- The US led in user acquisition iOS spending with $325 million. This totalled around 25% of the $4.9 Billion global app marketing budget spend.
- Marketing-driven (non-organic) installs for iOS in the US surged 81% Year-over-Year (YoY) in Q1 2023. Whereas Android rose 45% YoY.
- The share of purchases made by shoppers that showed initial intent in making an in-app purchase and eventually did because of marketing activity swelled in the US. Remarketing conversions rose 55% YoY among all app marketing conversions in the U.S., outperforming the global average.
- App user retention dropped in the US. 2023 rates on Android 16% lower and iOS 6% lower than the 2022 average.
“The impact of the downturn on ad spend as seen during the first quarter of 2023 has been significant. Marketers have been cutting budgets. However, the success of the 2022 holiday season, even amidst the prevailing financial slowdown, should instil greater confidence in marketers. They need to plan for the upcoming holiday season,” said Shani Rosenfelder, Director of Content Strategy & Market Insights, AppsFlyer.
“Emotional marketing offers a greater resonance now more than ever. So, marketers should stay attuned to the needs and sentiments of audiences to connect with them on a deeper level.”
Methodology
AppsFlyer’s State of eCommerce App Marketing, 2023 Edition is an anonymous aggregate of proprietary global data from 3.7 billion app installs from 8,500 eCommerce apps and 22 billion remarketing conversions.
Enterprise Times: What this means for businesses.
The post-COVID digital cooldown of last year has evolved into a far-reaching economic slowdown. Notably, year-over-year growth in eCommerce sales saw a greater dip than expected. Despite this temporary trend, the AppsFlyer’s report documents the importance of eCommerce apps on today’s marketing tech stack.
Consumers either bought more goods or purchased the same items that were more expensive due to inflation. This means that consumers absorbed the price hikes. Either way, spend was strong in the 2022 peak season and is, therefore, likely to be just as strong this year. Especially as discount shopping will be more appealing than ever due to the economic climate.
Despite a 25% plunge in spending in 2022 amid the economic downturn, AppsFlyer’s report showcases some positive retail global trends in a shifting economic landscape.
