News Update – Falling App Usage
Engine Overview
- Mobile App Usage has fallen as much of 5% since the start of the pandemic.
- Rising advertising and supply chain costs have caused a decline in new customer acquisition.
- Ecommerce sales have started to decline in response to lightened COVID protocol.
- Holiday season may see increased leverage for mobile downloads.
What's the Deal?
If you’ve been online or not under a rock recently you may have noticed the effects of inflation. Rising gas prices, rising produce prices, and a number of other notable effects. These rising costs in the supply chain were first onset by COVID shutdowns, and although things were starting to get down to baseline, everything was again amplified by the recent war in Ukraine.
Also being impacted by rising prices, advertising costs have felt the sting of inflation. According to Marketing Dive, ad spending for new customer acquisition has dropped by 50% year after year. From 2021 to 2022, ad spending only accounted for $6.1 billion.
With the threat of COVID becoming less of a prominent focus, protocols have also diminished. Because of this more customers are choosing to visit stores rather than exclusively shop online. This increase in physical traffic has attributed to the decrease in mobile application downloads in recent months.
What This Means.
Ecommerce businesses and platforms may see a decrease in mobile application downloads and users. This could also translate to a decrease in sales throughout Ecommerce platforms as a whole.
In addition, customer acquisition costs may also increase. As ad spending goes up, and customers continue to convert less and less, it will become more costly to acquire those new customers. Therefore, you may see an impact in your ROI through efforts which could impact profits.
Conclusion
Ecommerce platforms may feel the sting of inflation and supply chain issues. Customers are looking for alternative methods of shopping now that they have the option for traditional means of acquiring goods and services.
This may be a good time to think outside of the box for alternative methods of acquiring new customers. There have also been a number of companies state they’ve seen success and increased ROI by ramping up spending on new customer acquisition.
Alternatively, this holiday season could be a good time to ramp up marketing efforts for sales and new customer acquisition, as the season always sees positive results and large sales numbers.
Overall, there may be a need to change various strategies to maintain application downloads and keep customers shopping online.
