American Marketer


Major retailers are missing out on mobile revenue

May 23, 2014

Ezra Siegel is vice president of community at Apptentive Ezra Siegel is vice president of community at Apptentive


By Ezra Siegel

According to Forrester Research, mobile devices generated $50 billion in revenue in 2013 and are forecasted to generate $82 billion in 2014. Consumers using mobile devices spend 86 percent of their time within applications, making apps the clear leader in driving revenue over the mobile Web.

Yet, even with these statistics and several clear indicators as outlined in Mobile Commerce Daily’s Mobile Commerce Outlook 2014 classic guide, major brands, specifically retailers, are not investing as they should into mobile initiatives and are losing out on significant revenue.

Major problems with retailer apps

Due to small screens, short-session use cases and varied connection speeds, apps need to be developed with the customer experienced first and foremost in mind.

Too many retailer apps take their mobile site and port it straight into an app, creating a poor experience that is difficult to use on a mobile device. J.C. Penney and Toys ‘R’ Us are prime examples of this.

Furthermore, running a mobile Web site inside an app can often lead to an increase in performance-based issues such as slow load times, crashes, freezes and other bugs. Any one of these issues can push a potential customer away, and decrease revenue.

Impact of ratings and reviews

Mobile apps lose downloads and potential customers when they have negative ratings and reviews.

The J.C. Penney iOS app has a total of 350 reviews all time, with more than 200 of them being 1-star reviews largely in response to the experience and performance based problems of the app.

For a major brand that is able to market its app to millions of people, only having a few hundred ratings and reviews is a clear warning that it is not doing enough on the mobile platform. Potential customers do not want to download an app with bad ratings.

Even Macy’s, which is often praised for its work in embracing the mobile platform, is struggling to create an app that people love to use. In the Apple App Store, the Macy’s app only has a 3-star rating overall.

The most recent Macy’s app release has only 51 ratings, with more than 75 percent of them being 1-star reviews. Each update to an app is supposed to be an improvement, yet this is clearly not the case with one of the industry-leading retailers in the mobile space.

This leaves the market open for popular apps such as JackThreads and Rue La La to carve out portions of revenue away from major retailers.

These smaller, mobile-focused companies have a more engaged mobile customer base, which is evident from their ratings and reviews. The importance of having a strong, engaging presence on mobile is what led Facebook to acquire mobile messaging platform WhatsApp.

How retailers can improve, fast

Mobile is a fast-changing ecosystem and retailers need to understand what their mobile customers want, need and expect from a mobile app.

Every mobile app must make it easy inside the app for customers to give feedback and get help if they have a problem.

Customer feedback should be included into every product development cycle to ensure positive ratings and reviews and, most importantly, that the app is improving in ways that fit the needs of the customers. Companies that spend time guessing what their customers want will fall behind.

Lastly, every app and new version needs to be rigorously tested to ensure high performance across all platforms, operating systems, devices and various network connections. As performance problems are the number one reason for dissatisfied customers, this process cannot be overlooked.

MOBILE IS A huge opportunity for major brands to connect with new consumers, re-engage old customers, and make shopping so easy it can be done while waiting for the bus.

Companies that invest their resources into mobile will increase their revenue and gain an advantage over their competitors.

Ezra Siegel is vice president of community at Apptentive, Seattle. Reach him at