Mobile Apps are Eating-Up Traditional E-Commerce Distribution Channels

Even before COVID-19 descended on the world in 2020, upending life as we knew it, e-commerce was already rising across the globe. In the U.S., it was fast becoming a “mobile-first” situation, with many customers checking a product out on their mobiles first, and purchasing later. As founder of Minimalist Marketing, Casandra Campbell, said, “The more you know about how your customers discover your brand and make purchasing decisions, the better equipped you will be to execute on all other aspects of your business.”

With Baby Boomers fading out and Gen-X reaching retirement age, Millennials and 'Gen-Zers' are now the major players in the market. Millennials; often considered the first “digital natives,” were the first generation to grow up with the Internet, and closely followed by Gen-Zers who were mostly in kindergarten when Apple launched the first iPhone.

There are 3.8 billion smartphone users in the world today, which is a 1.3 billion increase since 2016.

Pew Research Center found that over 85% of Americans use smartphones today, resulting in 294.15 million smartphone users in the U.S alone.

Surveys focused on millennial tech use find that 7 of 8 Millennials own a smartphone, and interact with their phones at least 45 times a day. Likewise, the influence of the iPhone goes deep with Gen Zers. A  recent study by Pew Research Center found that about 45% of today’s teens admit to using the Internet “almost constantly”, and about 9 in 10 of them use the internet on their phones multiple times a day. Apple also reported that the average iPhone user unlocked their phone 80 times a day, and Instagram records over 80 million photographs uploaded every day.

This transition to a population of digital natives has completely changed the way business is done in the U.S., for example through SaaS marketing. Such a transition leaves producers and suppliers scrambling to adjust to the needs of a new breed of customer. Moreover, the pandemic has accelerated their online purchasing behaviors, with 28% of Gen Zers and 24% of Millennials deciding they would be likely to engage in more eCommerce in the future.

Furthermore, as the market research company, Insider Intelligence, predicts, eCommerce sales in the U.S. will go beyond $1 trillion for the first time, in 2022. They had earlier expected this milestone to be reached in 2024. They also forecast global e-commerce sales to reach $5 trillion in 2022 and $6 trillion in 2024.

In the U.S., revenue from retail e-commerce in 2021 was approximately $768 billion.

The mobile is decidedly the present of ecommerce, not just the future, with over 50% of the global population engaging in online shopping through their smartphones. Studies find that women are more likely to click on ads on Facebook than men, and people aged 35-65 are more likely to engage with online commercial messages. Therefore, people are engaging more with digital advertising than they did pre-pandemic, and 51% of the online community approves of brand advertising online. Furthermore, Facebook and YouTube, being the largest online platforms, were seen as the most effective in terms of advertising.

Thus, as Harvard Business Review advises, retailers need to think bigger than eCommerce, in order to succeed in it. For instance, they need to consider whether or not, their technology platform is flexible enough for unique customer needs and engage in creating a smooth journey for the customer that ends with swift delivery. The reason is that customers of today have no patience with excuses, particularly in relation to accessibility, affordability, and convenience. Businesses gradually realize that customers are not only seeking a great product or service, they are also looking for the most convenient and appealing means to obtain it. Even as product customization is an emerging technology trend in eCommerce
, mobile apps appear to be critical in building relationships between customers and businesses.  

Moreover, eCommerce mobile apps are better suited to the focused needs of online shoppers, unlike websites, which generally have an exhaustive array of information that shoppers are not interested in; mobile apps allow the browsing customers to go for single-click solutions.
Furthermore, mobile apps are speedy, and allow smooth navigation for customers, unlike websites that are not mobile-friendly.  

What's more, customers are further drawn to mobile apps because of the use of chatbot services through artificial intelligence (AI). Recent studies by the chatbot platform for businesses, like Ubisend, discovered that 57% of customers like chatbots because of their 24/7 availability, while 21% of customers believe chatbots are the easiest way to contact a business, and 35% of customers want more companies to employ chatbots.

On the other hand, Google Duplex is an eCommerce AI tool that employs AI-enabled digital assistants to create grocery lists in the shopper’s natural voice and also place orders or make appointments with businesses on the phone without the user’s participation. In addition, the AI voice is able to respond correctly to the human voice on the other end, even adding words like “um” and pausing briefly to sound more human.

When using websites, there is a lengthy, complicated checkout process, and about 70% of customers abandon their shopping cart through frustration. On the other hand, mobile apps are able to save the information of different payment methods, making for a smooth checkout.  As Hil Davis, Co-founder of the online men’s retailer, J. Hilburn, said, “eCommerce and mobile commerce have dramatically changed the way that brands reach customers, making it faster and easier for consumers to make purchases on the fly while avoiding the hassles of going to the store.”

From another perspective, songwriter David Bowie said, “Tomorrow belongs to those who can hear it coming.”