A Case Study In User Acquisition: Walmart App vs. Amazon App

Feb 09, 2017
By: Marissa Camilli

“If your plans don’t include mobile, your plans are not finished…”

– Wendy Clark, President and CEO of DDB Worldwide

Mobile commerce shattered revenue records in 2016, and by all appearance it will only continue its prolific growth in the coming years. With $123 billion in mobile commerce sales recorded last year, m-commerce experienced a 39.1% increase over 2015’s output numbers, and more than doubled the amount of sales for 2014. In 2017 m-commerce is not only projected to pull in $151 billion, but it should increase 2016’s output by almost 23%! This recent, rapid, and enormous growth begs the question… how??

The answer, my friends, is in the app.

Due to the rigid limitations of the mobile web, many retail companies have recently jumped on the mobile boom bang wagon to develop mobile shopping apps. Across all industries and sectors apps are changing the way consumers, especially Millennials, interact with retailers. By creating a more socially-centric and personalized consumer experience, apps are changing the way consumers purchase their goods. This change is evidenced in the fact that mobile shopping app usage is now growing faster than any other category of app. In adapting to the new consumer value paradigm of the digital age, retailers have the potential to supercharge new user acquisition like never before. Nowhere is this more evident than with the two most popular m-commerce apps on the market today:

Walmart and Amazon

In order to help aspiring retailers with their user acquisition and retention strategies, this post is dedicated to reviewing both Walmart and Amazon, and the foundational pillars of their successful acquisition, retention, and engagement strategies. The hope is to provide some insight into those companies that do mobile retail best, and in turn, help today’s retailers take their mobile app user acquisition to the next level.
Let’s take a look!

Walmart – The Rising Star of Mobile Commerce

While a traditional giant of brick and mortar retail, Walmart is a relatively new player on the mobile app scene. This fact makes it all the more impressive that Walmart has managed to persuade users to do something that very few retailers have been able to do: to reserve a spot for their retail app on their mobile phone homepage (i.e. the highest value mobile real estate available). Typically reserved for social media and utility apps such as Facebook, Instagram, and Google Maps, securing a homepage app reservation proves a difficult task for most large retailers, as their customers are likely to have dozens of preferred brands.

How did Walmart overcome this barrier to mobile home screen entry?

Walmart achieved this rare feat by going back to the basics of user acquisition while simultaneously emphasizing the fact that offline consumer habits drive consumer engagement just as much as their online habits do. With 27 million users as of June 2016 (up from 22 million in 2015), Walmart’s app is now the second most popular retailer app after the godfather of mobile commerce, aka Amazon. In addition to its recent surge in new users, the Walmart app also recorded a unique visitor increase of 26% year-over-year, closely rivaling their mobile app rivals and current duopoly kings Facebook and Google. A quick review of this dramatic growth reveals one consist theme:

Agile experimentation.

In 2014, after realizing the importance of having an engaged target market, Walmart introduced an innovative in-app feature called Savings Catcher. This highly popular feature guarantees app users the lowest-price possible by allowing them to scan QR codes directly into the Walmart app rather than by manually entering into the app the long form codes. While a relatively simple feature, the Savings Catcher struck a chord with Walmart’s target market (who frequently visit the brick and mortar locations), and resulted in 10 million Walmart app downloads within a week of its release. This should come as no surprise considering the top-two reasons for using retail apps in-store are to compare prices and redeem discounts. Now serving as a key value driver for user acquisition, Walmart understands that app longevity and scalability are intimately tied to incentivization. By offering more ways to earn rewards and automating the user savings experience, Walmart customers now have a concrete motivation to download the mobile app, and to regularly check their balance, scan receipts, price items, and pass the app along to friends (i.e. a real world example of social proof).

Perhaps Neil Ashe, President & CEO, Global eCommerce, described the app best at Walmart’s recent 22nd Annual Meeting for the Investment Community. He explained:

“The Walmart app solves problems. A customer wants to refill her prescription, but needs to get out of the store quickly, she can save herself time by simply taking a picture of the label. She can pull up the mobile registry and see what to get her friend next weekend for the baby shower. When it’s time to check out, she can get an e-receipt right on her phone. And thanks to Savings Catcher, she knows that if a competitor has a lower advertised price on something she just bought, she’ll get that difference back rate on a gift card.”

Another area of user acquisition focus that Walmart has perfected pertains to highly personalized (and relevant) targeting. Upon releasing its in-house search engine Polaris in 2012, Walmart made an important shift to semantic search technology in order to populate relevant search results by predicting shopper intent. In plain english, this means that if a user searches for the term “blender” on (or the app), the engine will equate the keyword to the main category of “home and appliance,” and will then display additional relevant prouct suggestions. In a true omni channel experience, these relevant product suggestions can then be transferred from desktop, to tablet, to mobile app. As the Millennial preference for relevant personalization is here to stay, Polaris’ personalized targeting is one of the digital age keys to Walmart’s off-the-charts customer loyalty and user retention rates.

Amazon – The Retail App King

With over 67 million app users as of June 2016 (up from 43 million in 2015), Amazon is the undisputed retail app king. While there are obvious differences between Amazon and its closest competitors (such as Walmart’s reliance on brick and mortar locations), these differences fail to tell the whole story as to why leading retailers are still playing catch up to Amazon’s app. Yes, amazon was an early adopter of social innovation, loyalty programs, and omni channel marketing, but so were many other retail giants. A closer examination reveals that its recent growth is owed to two main, and often overlooked, user acquisition value drivers:

Referrals and app preloading.

Looking to encourage more customers to install its app and engage in m-commerce, Amazon began to offer consumers a mobile referral program in 2015. The program rewarded current app users $5 to share the Amazon app with friends, and also rewarded their friends who installed the app $5 do spend on the site. Understanding that 84% of consumers trust the recommendations of friends and family most, Amazon was not only able to break down barriers and encourage new user acquisition, but it was able to artificially create an organic uplift by increasing the app’s ranking. That is to say, the strategy almost simultaneously resulted in more downloads and higher rankings, both at greater speeds and volume. As the program was exclusively focused on mobile, Amazon presented current app users with dynamic and varied in-app native ads. These ads included a wide range of engaging copy, value propositions, and CTAs in order to maximize user impact.

Turning our attention to the picture above, we find three different examples of CTAs from Amazon’s native ad infused referral program. The first ad contains a simple message with a basic CTA that is aimed at inducing the user to engage in a referral. The second contains some engaging imagery and offers two CTAs, one to invite referrals from contacts, and a second to share the referral code through social media or email. Looking at the third CTA, we find an example of a highly important success determining factor, as the CTA is in fact requesting permission to access the app user’s address book permission. This is typically a huge hurdle for app publishers and mobile retailers to overcome. Yet, with an an already successful Amazon app, the referral program was able to provide context to justify this highly sensitive request. The success of this program was a major reason why Amazon was able to increase its mobile app users by 24 million since the programs 2015 inception.

Another innovative user acquisition tactic that has failed to catch on with mobile app competitors is the process of preloading native apps on cellular devices. Announcing a partnership with Verizon Wireless in 2012, the Amazon App Suite (which includes apps such as the Kindle app, Audible app, and the primary Amazon app) has been preloaded on select Android devices for the better part of five years. By thinking outside-the-box early and often, Amazon realized that a preloaded app delivery service would allow mobile operators to seamlessly manage applications uploaded to their phone upon first boot, while simultaneously providing users with a steady stream of Amazon content, 1-click ordering, and cross-category search capabilities. Given the many benefits of dynamic app preloading, this trendsetting choice by Amazon set the stage for other retail and non-retail app publishers (such as Lyft) to follow suit.

In Conclusion…

With no end in sight of the global mobile commerce boom, Walmart and Amazon represent two shining examples of value driven and creative acquisition strategies. From Amazon’s preloading and referral program, to Walmart’s agile experimentation and personalized targeting, the growth tactics of both companies prove to be valuable case studies for user app acquisition in the digital age.

Marissa Camilli
By Marissa Camilli
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