Does your brand need an app?
Last year was a challenging year for Farfetch, but there was at least one bright spot for the company.
Farfetch’s app was its “most profitable and fastest growing channel,” group president Stephanie Phair said on the company’s February earnings call.
Companies like Nike and Levi’s have also pointed to their apps as key drivers of digital sales. For fashion retailers, an app that provides real estate on consumers’ phone screens and provides direct communication via push notifications is alluring. Consumers can check their devices more than 50 times a day. They do this more and more often to make a purchase. According to Insider Intelligence, mobile sales in the U.S. are projected to reach 8.7 percent in 2026, up from just 4.1 percent in 2019.
So should every brand have an app?
“Oh my God, no,” said Sucharita Kodali, vice president and principal analyst for digital strategy at research and consulting firm Forrester. – In most cases it is not necessary.
For every Farfetch, Nike, and Levi’s, there are countless brands with apps that nobody uses. Consumers are choosy about what they give screen space to, and some brands have discovered that mobile-optimized e-commerce sites can achieve the same goals at a much lower cost. Patagonia shut down its app in 2016, saying its newly phone-friendly website would handle mobile commerce.
Creating an app can also require significant money and effort.
“We quickly realized that app development has completely different needs than an e-commerce website,” Kate Ridley, director of brand and product at Allbirds, wrote in an email. They needed developers with Apple iOS experience, designers who knew mobile design, product managers who understood the intricacies of iOS, and marketers who knew how to grow an app’s user base.
But when an app works, it can pay off. According to a 2019 study, customers who downloaded and used a retailer’s app shopped more often, bought more products, and spent larger amounts than customers who didn’t use the app. (Several items were returned, but the researchers concluded that there was still a net increase in value.)
“We often find that customers who use our app generate higher repeat purchase rates and are among our highest lifetime customers across our channels,” said Ridley.
According to mobile analytics firm Data.ai, downloads of e-commerce retail apps will also increase by 11 percent worldwide in 2022 compared to the previous year.
The apps are worth it to at least some. Here are some things to keep in mind when considering whether to start one.
Which fashion retail apps do shoppers use the most?
While brands with larger customer base tend to have more app users, data.ai’s review of apps selected by BoF found that the fast fashion and athletic segments had the most monthly users in 2022.
In addition to the high demand for their products, these categories lend themselves to app features that may draw users back. Activewear apps may offer fitness information; in Lululemon’s app, logged-in members can access free classes, for example.
Meanwhile, fast fashion brands regularly release new products or lookbooks for browsing and can use the same addictive tricks as games and social apps. According to Lexi Sydow, head of insights at Data.ai, Shein—the clear winner in usage—is designed to feel more like a social app than a retail one. .
“You ‘suck’ the items as opposed to putting them in the cart,” Sydow said. “Each one of these gamified exclusive offers encourage you to sign up for push notifications or text messages.”
Shein also has a comprehensive strategy to get users to download the app. It runs paid ads in the app store and frequently updates all the images on its site to promote sales related to special events like Black Friday or the Super Bowl.
While luxury brand apps tend to offer innovative features, their low user numbers make sense “because the pool of customers in that range might be a bit smaller anyway,” Sydow said. Also not the kind where customers visit daily to see new goods. Several luxury apps, including Saint Laurent’s and Valentino’s, did not have a large enough user base for Data.ai to provide usage metrics that met the reliability standard.
When does it make sense to launch an application?
The bigger a company is, the bigger the app’s potential audience, but other factors also affect downloads.
“We see two big drivers,” said Ben Nassler, vice president of consumer apps at NewStore, a merchant services platform that has built apps for brands like Golden Goose, G-Star Raw and Scotch & Soda. “A really strong brand with a strong following, those customers are very likely to demand an app. And if a brand has a share of repeat customers, that’s the other part.”
Consumers are more likely to use apps that provide additional options beyond websites. Users of Nike’s app can scan products in-store for more information or save them to a wish list. H&M’s app offers a similar in-store feature to find available colors and sizes, as well as visual search, where users take a picture or use one from their phone to find similar H&M products. Golden Goose has made the app a key part of its loyalty program, Nasser said, sharing exclusive offers and being the first to see what’s new.
What features should an app have?
However, launching with all possible features is not necessarily the best solution, especially for young brands.
“If you’re a startup … less is better,” said Ranji Persad, vice president of North American sales for large and small customers at Net Solutions, a custom software developer.
First, brands need to be clear about what problems they’re trying to solve, what features they absolutely need and what demographics they’re targeting, he said. They must then complete their application quickly, ideally within five months. A common mistake is to add more and more features that lengthen the timeline.
But Nasser also warned that he was doing too little. You’ve seen apps crash when brands release a minimum viable product. In his view, opportunities such as product recommendations and attractive lookbooks are the bet. Brands can later add features such as in-store options or virtual try-on.
Ultimately, the priority should be to build the commercial functions. According to Sydow, apps should inherently simplify the user interface and customer experience, “which helps accelerate and drive that transaction process.”
How much does it cost to create and maintain an app?
BoF experts said the cost of an app can range from tens of thousands of dollars to more than $1 million.
Fashion companies often have to hire external agencies for technical work. According to Persad, if a brand uses a software-as-a-service app to create a storefront with minimal custom work, a barebones app can cost $20,000 or less.
But what makes apps expensive are their characteristics: the larger the number and the more complex, the more development is required and the higher the price. Loyalty options and product recommendations are expensive. There are additional costs to consider, such as the content management system and back-end infrastructure required to send push notifications and regularly update content.
Nasser, who worked on the Hugo Boss app reboot several years ago when he was at the brand, said that if a company is building everything from scratch, the minimum investment for an iOS app is $300,000 to $400,000. An Android app would be an additional amount. (NewStore advertises itself as reducing these costs with its platform.)
The costs don’t end when you launch the app. The developers are constantly fixing bugs and updating. When the iPhone 10 introduced the full-screen display, for example, it meant that every screen in iOS apps had to be redesigned, Nasser said.
However, when an app connects with customers, the rewards are worth it. Since G-Star Raw released its app in 2018, it has offered loyalty benefits such as early access to sales. According to NewStore, shoppers using the app are about three times more likely to use its desktop or mobile website, and in 2022 accounted for nearly a third of the brand’s total e-commerce revenue.