Brands Must Focus on First Purchases to Gain Loyal Users
The average user makes the first purchase 3.6 days post install. Marketers are doubling down conversions during the first day with 40% of conversions and over 75% during the first week.
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How can brands gain loyal users? Technology has enabled customers to switch quickly from one device to another and create multiple channels of communication with a brand. In such a scenario, brands must focus on building a connection with their customers to gain their loyalty. Research shows that app users are more likely to make repeat purchases than non-app visitors of a brand.
AppsFlyer released the 2024 edition of its State of eCommerce App Marketing report. It offers valuable insights into how the industry is evolving and which trends brands should harness to drive key metrics in the upcoming peak shopping season, from app downloads to purchases. As per the study, the outlook for mobile commerce growth appears promising in the upcoming months, providing marketers with an opportunity to cultivate and nurture customer loyalty.
AppsFlyer analysis shows that in-app purchasing (IAP) from consumers increased across the 2023 holiday season. It rose by 15% against Q4 2022 and sustained a positive trajectory into 2024, with a 21% surge in purchase volumes compared to Q1 last year. At the same time, the total 2023 ad investment soared to US$6.6 billion which can highlight improved marketing confidence.
The top trends revealed in the study include the following;
Consumer spend continues steady climb
Year-over-year data reveals that not only did in-app purchases (IAP) see a substantial 15% increase in Q4 of 2023, but the growth momentum also carried into Q1 of 2024: +21%. This rising trend lends solid evidence for the ongoing expansion in mobile commerce.
Interestingly, the spring of 2023 brought an uncharacteristic spike in IAPs in specific markets like the UK and France. It appears that this increase can be attributed to marketing efforts by some large Asian apps and a corresponding rise in user engagement. This dynamic led to a notable, though temporary, lift in consumer spending, reflecting the powerful impact of all-in paid marketing.
First purchase key to gain more loyal users
The average user makes that coveted first purchase 3.6 days post install – with no significant differences between iOS and Android numbers.
Remarketing activations should therefore focus on the first week post install to convert as many installers as possible. Marketers are following this strategy, doubling down during the first day with 40% of conversions (when a user clicks on a remarketing ad and opens the app), and over 75% during the first week. On average, within a 30 day period, the first paid remarketing conversion is registered 2.5 days post install.
Massive iOS UA push in key markets
Several large Asian apps launched ambitious and successful marketing campaigns across major Western markets including the United States, UK, and France, challenging the traditional surge in app installs typically seen during the holiday season.
That momentum didn’t slow down as the first quarter of 2024 rolled around. The apps that dominated in Western markets also began making waves in Japan, Brazil, and Saudi Arabia. These markets have one thing in common: their iOS users generally have more to spend.
Other key global insights from the report:
- In-app consumer spend increased by 15% year-over-year in Q4 2023, with a 21% uplift among iOS users and 9% higher spend for Android users confirming a predictable peak in consumer spending towards the end of each year.
- Apple iOS users powered a 60% year-over-year surge in NOI across Q4 2023, while Android also saw NOI rates rise by 21% due to a drop in cost per install (CPI).
- Large Asian players were responsible for a 125% leap in iOS NOI in Q2 & Q3 2023, driven by a marketing push that disrupted iOS install seasonality patterns.
- The first week from app download should be a priority for marketers, with the average user making their first purchase 3.6 days after they download the app. When it comes to retargeting, 40% of remarketing conversions occur on the first day, and over 75% during the first week. Total global app ad spend reached US$6.6 billion in 2023, with iOS platforms leading the charge at US$2.9 billion despite a 15-20% device market share. Android saw an 18% cut in ad spend from 2022 to 2023, while iOS saw a robust 43% increase.
The study suggest the following takeaways:
- Invest in user acquisition before the holidays
- Focus efforts on the first purchase
- Blend paid and owned media strategies
- Monitor and diversify media channels
- Regain granularity with AI-driven creative measurement
“The mobile ecommerce advertising landscape is subject to constant strategic readjustment. Our
latest findings indicate that as the global economy starts to stabilise, brands in the space are swinging
firmly back towards paid marketing as a key means of user acquisition, instead of relying heavily on
owned channels,” said Sue Azari, Industry Lead for eCommerce, AppsFlyer. “This change illustrates
the dual impact of eased economic concerns and increasing pressure to stand out against
competitors, particularly with new players in the space such as Temu — with both of these factors
driving a surge in how much brands are spending on promoting shopping apps. As the peak 2024
holiday rush approaches, brands looking to get noticed must focus on remarketing and drive long-
term rewards from lasting loyalty.”
