Mobile apps are at the forefront of commerce, becoming indispensable for US smartphone users. A staggering 65.8% of users are expected to leverage retail apps in 2024, ranking just behind maps/navigation apps (72.8%) and weather apps (71.1%), according to Insider Intelligence’s July 2023 forecasts.
Despite grocery apps trailing other categories with a 20.0% adoption rate, they are the fastest-growing app category in the US. This rapid growth has significant implications for retail media, with experts predicting that grocery apps could play an increasingly prominent role in brands’ mobile strategies. As retail media networks witness a forecasted growth of 20% or more over the next four years, grocery apps stand to benefit from this surge in ad spend.
Leading the charge in mobile app adoption is e-commerce giant Amazon, reaping the rewards of user engagement. The forecast indicates that Amazon’s US mobile ad revenues will surge by 22.9% in the coming year, reaching a substantial $21.91 billion, nearly half of the company’s net digital ad revenues. Amazon’s high mobile app adoption places it ahead of search engines, with 51% of US consumers commencing their online search journey on the platform.
Mobile apps offer an omnichannel retail media opportunity, particularly when consumers engage with them in physical stores. Retailer Target exemplifies this trend, with 75% of its guests browsing through its app or website while shopping in-store. Among Gen Z guests, this figure escalates to an impressive 93%. This presents an avenue for serving ads and exclusive deals within stores and gaining comprehensive insights into customers’ in-store search habits.
For retailers, the surge in mobile app adoption represents an avenue for unlocking growth in retail media advertising and subsequently boosting sales revenues. However, as consumers have a limit to the number of apps they adopt, retailers must ensure their apps are worthwhile. Providing exclusive deals, loyalty opportunities, user-friendly interfaces, and entertainment features can enhance the appeal of retail apps.
Brands should integrate mobile apps into their retail media strategy. Moving beyond on-site search, retail media should be perceived as a comprehensive media channel with off-site opportunities, encompassing streaming TV and social media. Mobile app advertising serves as an extension of retail media, offering brands another avenue to connect with customers at the right moment, fostering engagement and driving conversions.
Additionally, retail media advertising global spending is predicted to reach an impressive $128.2 billion this year, growing by 10.2% year-on-year.