App instead of the Web: Why more and more customers are shopping via smartphone

Julian, Marian, you are responsible for the marketing and further development of the OTTO app. Hand on your heart: Do you even need apps anymore? Mobile websites are a good alternative.

JULIAN KOMAR:No, they aren't. Certainly, there are customers who prefer a mobile website to an app . However, the figures clearly show that both the traffic and the number of users of our app have been growing significantly for years.

What does that mean exactly?

JULIAN: In recent years, the number of users of the app has grown in the high three-digit percentage range. In the last 18 months alone, we have more than doubled the number of active users per month - a great success that shows that apps are anything but outdated.

MARIAN BUCHER:In my view, apps are more important than ever. The keywords are direct customer access. They enable a very comfortable and personal user experience - and this plays an increasingly important role.

How do you explain the strong app growth of the last few years?

MARIAN: This is mainly related to the use of smartphones today. Whereas a few years ago it was rather unusual to shop on the move, today shopping by app is quite normal for many people. Apps are considered to be particularly convenient, fast and secure, which allows the number of users to rise rapidly.

OTTO ahead of Netflix

Does the customer's shopping behaviour change when more and more shopping is done by app?

JULIAN: The app has long been a very successful sales channel for us, and one that is constantly evolving. In particular, the order frequency and shopping basket sizes have performed very well. We observe that app users visit us more often than webshop users, but stay for a shorter time. They also browse a lot more. All in all, this leads to increased interaction, which we would seek to expand further. Also, of interest: The proportion of men using the app is about a third higher than on the website, and the average age of the app user is lower.
And yet you need to get a customer to install the app first. Not so easy with so much oversupply ...

MARIAN: It is of course helpful that OTTO is very well known and offers an attractive, wide range of products. Less well-known, specialised dealers would probably find it more difficult in this area. Nevertheless, this alone is not enough to successfully establish an app on the market. Which is why we advertise the app on many channels, including Google, Instagram and Apple's App Store.
And that works?

JULIAN: Yes, growth shows that the strategy is working. In this context though, it is not just a matter of gaining customers or encouraging them to install apps - we also want to keep them. For that reason our aim is to ensure customers use our app regularly.

MARIAN: To this end, we rely, among other things, on app-only campaigns with special offers that are only available in the app. Recent example: In the "OTTO APPril" campaign lasting two weeks in April, we offered our users many different short-term offers that were only available via the app. The fact that this works is proven by the increased download figures during the campaign period and, by the way, also by the app charts.

OTTO recently overtook Netflix for the first time in this regard.

JULIAN:Right, at least for a short while. In my view, however, app charts are only meaningful to a limited extent. It is more important to have consistently good offers than a great ranking. A high chart placement is not the only decisive factor, especially if we want to bind customers to our app on a long-term basis.

MARIAN: Such rankings are always just a snapshot that says nothing about how many users actually use an app or even buy from it. Of course, it is still interesting to take a look at the charts, especially when you compare the top 10 shopping apps in Germany with the top 10 online shops with the highest turnover in this country. At the end of 2018 there was only a slight overlap: Only Amazon, Zalando and OTTO were represented in both top 10 lists. So we are already very good at this in comparison with the industry as a whole.

App becomes most important sales channel

What are you going to do to keep it that way? What are your targets for the app?

JULIAN:We are firmly convinced that growth will continue and that the app will become our most important sales channel in the long term. It goes without saying that there is a need to invest accordingly and continue to develop the app, for example in personalization and convenience. We do, however, also find the use of technologies such as voice and augmented reality in the app highly interesting prospects. We are also involved with Micro Moments.

MARIAN: From a marketing perspective, we want to establish ourselves as one of the best shopping apps in Germany in the long term - regardless of socio-demographic trends. We want to reach younger users as much as older customers along the same lines. Not an easy undertaking.

Let's take a look at the future for a moment: Will we all soon be shopping only by using smartphones?

MARIAN: Our aim is not to sell only via smartphone in the near future. That would be counterproductive from today's point-of-view. It is much more important to offer all customers a perfect shopping experience on all relevant channels and devices - no matter whether via smartphone app, voice assistant or desktop PC.

JULIAN: Nevertheless, it is evident that mobile shopping and apps are becoming increasingly important for the retail trade. OTTO is no exception. Our app must therefore be linked even more closely to the needs of the users for example in terms of services, marketing and product range. We are on the right track, but still a long way from achieving our goal.