E-commerce apps lose pandemic luster

Dive Brief:

Android-based e-commerce app installs dropped 5% (when excluding India, where installs were up 116%) in the first half of the year, compared with the same period in 2021. IOS installs also dropped 4% globally over the same period, according to AppsFlyer’s 2022 State of eCommerce App Marketing report.
Ad spending for user acquisition dropped 50% year over year, amounting to $6.1 billion from July 2021 to July 2022.
Thirty-day app retention on Android devices dropped 13% as users continue to explore new services. iOS app retention dropped 5% overall in the same period.

Dive Insight:

While post-Covid fatigue may be the biggest factor in the drop in e-commerce app installation and usage — both of which surged during the height of social distancing and lockdowns — newer developments, such as the war in Ukraine, supply-chain disruption, rising inflation and fears of a looming economic downturn are also playing a role.

The report found that non-organic installs are slowing down. In 2022, e-commerce is no longer holding the draw it once did. Rising prices, which have taken a toll on marketing budgets and planning in recent months are also contributing to the decline as campaigns encouraging app downloads are stagnating.

Due to this stagnation, apps are focusing on different tactics to maintain their user bases, such as remarketing and using owned media channels for promotion. Indeed, the use of owned media jumped 360% year-over-year between July 2021 and July 2022.

As the end of the year approaches, the study notes marketers may also stage pushes around significant upcoming events like Black Friday, Singles’ Day and the World Cup, to encourage installs.

“It will be interesting to see how the 2022 holiday season will play out,” reads the report. “A cooldown after Covid peaks and mounting economic and logistical challenges seem to predict a downward direction. However, consumer behavior and holiday shopping sometimes have a way of their own … There may still be an appetite for a celebratory season, encompassing both Christmas and the World Cup.”