IDEAS home Printed from https://ideas.repec.org/a/eee/ijrema/v36y2019i3p420-438.html
   My bibliography  Save this article

Engaging the unengaged customer: The value of a retailer mobile app

Author

Listed:
  • van Heerde, Harald J.
  • Dinner, Isaac M.
  • Neslin, Scott A.

Abstract

Mobile apps are becoming a go-to tactic for retailers because they offer the promise of highly convenient digital engagement. We hypothesize that two types of customers are best served by these apps — “offline-only” customers currently purchasing exclusively from the retailer's physical store, and “distant” customers who reside far from the physical store. For offline-only customers, the app complements the physical engagement they currently have. For distant customers, the app offers convenient engagement their remoteness currently precludes. We model app access and purchase behavior of 629 customers who downloaded a retailer's app. We find that apps generate more incremental sales among distant customers compared to near customers, and more incremental sales among offline-only customers compared to online customers. On an illustrative base of 100 K app users, we find accessing the app would generate $2.3 M in incremental sales. Consistent with our segmentation results, we find that the users with the greatest purchase lift (9.5%) due to app usage are those that are distant and offline-only. Our results confirm the economic value of retailer apps and their role as a segmentation strategy to enhance customer engagement.

Suggested Citation

  • van Heerde, Harald J. & Dinner, Isaac M. & Neslin, Scott A., 2019. "Engaging the unengaged customer: The value of a retailer mobile app," International Journal of Research in Marketing, Elsevier, vol. 36(3), pages 420-438.
    • Handle: RePEc:eee:ijrema:v:36:y:2019:i:3:p:420-438
    DOI: 10.1016/j.ijresmar.2019.03.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167811619300242
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijresmar.2019.03.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cameron,A. Colin & Trivedi,Pravin K., 2013. "Regression Analysis of Count Data," Cambridge Books, Cambridge University Press, number 9781107667273, November.
    2. King, Robert Allen & Racherla, Pradeep & Bush, Victoria D., 2014. "What We Know and Don't Know About Online Word-of-Mouth: A Review and Synthesis of the Literature," Journal of Interactive Marketing, Elsevier, vol. 28(3), pages 167-183.
    3. Kumar, V. & Anand, Ankit & Song, Hyunseok, 2017. "Future of Retailer Profitability: An Organizing Framework," Journal of Retailing, Elsevier, vol. 93(1), pages 96-119.
    4. Kannan, P.K. & Li, Hongshuang “Alice”, 2017. "Digital marketing: A framework, review and research agenda," International Journal of Research in Marketing, Elsevier, vol. 34(1), pages 22-45.
    5. Zhao, Zhenzhen & Balagué, Christine, 2015. "Designing branded mobile apps: Fundamentals and recommendations," Business Horizons, Elsevier, vol. 58(3), pages 305-315.
    6. Konuş, Umut & Neslin, Scott A. & Verhoef, Peter C., 2014. "The effect of search channel elimination on purchase incidence, order size and channel choice," International Journal of Research in Marketing, Elsevier, vol. 31(1), pages 49-64.
    7. Bellman, Steven & Potter, Robert F. & Treleaven-Hassard, Shiree & Robinson, Jennifer A. & Varan, Duane, 2011. "The Effectiveness of Branded Mobile Phone Apps," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 191-200.
    8. Pauwels, Koen & Neslin, Scott A., 2015. "Building With Bricks and Mortar: The Revenue Impact of Opening Physical Stores in a Multichannel Environment," Journal of Retailing, Elsevier, vol. 91(2), pages 182-197.
    9. Kim, Su Jung & Wang, Rebecca Jen-Hui & Malthouse, Edward C., 2015. "The Effects of Adopting and Using a Brand's Mobile Application on Customers' Subsequent Purchase Behavior," Journal of Interactive Marketing, Elsevier, vol. 31(C), pages 28-41.
    10. David R. Bell & James M. Lattin, 1998. "Shopping Behavior and Consumer Preference for Store Price Format: Why “Large Basket” Shoppers Prefer EDLP," Marketing Science, INFORMS, vol. 17(1), pages 66-88.
    11. Deleersnyder, B. & Geyskens, I. & Gielens, K.J.P. & Dekimpe, M.G., 2002. "How cannibalistic is the internet channel? A study of the newspaper industry in the United Kingdom and the Netherlands," Other publications TiSEM 16dcb25c-7ea9-4c75-bdf6-5, Tilburg University, School of Economics and Management.
    12. Liu, Huan & Lobschat, Lara & Verhoef, Peter C., 2018. "Multichannel Retailing: A Review and Research Agenda," Foundations and Trends(R) in Marketing, now publishers, vol. 12(1), pages 1-79, December.
    13. Peter E. Rossi, 2014. "Invited Paper —Even the Rich Can Make Themselves Poor: A Critical Examination of IV Methods in Marketing Applications," Marketing Science, INFORMS, vol. 33(5), pages 655-672, September.
    14. Melis, Kristina & Campo, Katia & Lamey, Lien & Breugelmans, Els, 2016. "A Bigger Slice of the Multichannel Grocery Pie: When Does Consumers’ Online Channel Use Expand Retailers’ Share of Wallet?," Journal of Retailing, Elsevier, vol. 92(3), pages 268-286.
    15. van Nierop, J.E.M. & Leeflang, P.S.H. & Teerling, M.L. & Huizingh, K.R.E., 2011. "The impact of the introduction and use of an informational website on offline customer buying behavior," International Journal of Research in Marketing, Elsevier, vol. 28(2), pages 155-165.
    16. Chib, Siddhartha & Greenberg, Edward, 1995. "Hierarchical analysis of SUR models with extensions to correlated serial errors and time-varying parameter models," Journal of Econometrics, Elsevier, vol. 68(2), pages 339-360, August.
    17. Andrea Pozzi, 2013. "The effect of Internet distribution on brick-and-mortar sales," RAND Journal of Economics, RAND Corporation, vol. 44(3), pages 569-583, September.
    18. Rebecca Jen-Hui Wang & Lakshman Krishnamurthi & Edward C. Malthouse, 2018. "When Reward Convenience Meets a Mobile App: Increasing Customer Participation in a Coalition Loyalty Program," Journal of the Association for Consumer Research, University of Chicago Press, vol. 3(3), pages 314-329.
    19. Konuş, Umut & Verhoef, Peter C. & Neslin, Scott A., 2008. "Multichannel Shopper Segments and Their Covariates," Journal of Retailing, Elsevier, vol. 84(4), pages 398-413.
    20. Zhenzhen Zhao & Christine Balagué, 2015. "Designing branded mobile apps : fundamentals and recommendations," Post-Print hal-01273668, HAL.
    21. De Keyser, Arne & Schepers, Jeroen & Konuş, Umut, 2015. "Multichannel customer segmentation: Does the after-sales channel matter? A replication and extension," International Journal of Research in Marketing, Elsevier, vol. 32(4), pages 453-456.
    22. Elisa Montaguti & Scott A. Neslin & Sara Valentini, 2016. "Can Marketing Campaigns Induce Multichannel Buying and More Profitable Customers? A Field Experiment," Marketing Science, INFORMS, vol. 35(2), pages 201-217, March.
    23. Inman, J. Jeffrey & Nikolova, Hristina, 2017. "Shopper-Facing Retail Technology: A Retailer Adoption Decision Framework Incorporating Shopper Attitudes and Privacy Concerns," Journal of Retailing, Elsevier, vol. 93(1), pages 7-28.
    24. Liu, Huan & Lobschat, Lara & Verhoef, Peter C. & Zhao, Hong, 2019. "App Adoption: The Effect on Purchasing of Customers Who Have Used a Mobile Website Previously," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 16-34.
    25. Gijsbrechts, Els & Campo, Katia & Nisol, Patricia, 2008. "Beyond promotion-based store switching: Antecedents and patterns of systematic multiple-store shopping," International Journal of Research in Marketing, Elsevier, vol. 25(1), pages 5-21.
    26. Zhenzhen Zhao & Christine Balagué, 2015. "Designing branded mobile apps : fundamentals and recommendations," Grenoble Ecole de Management (Post-Print) hal-01273668, HAL.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maier, Erik & Bornschein, Rico & Manss, Rico & Hesse, Damian, 2023. "Financial consequences of adding bricks to clicks," International Journal of Research in Marketing, Elsevier, vol. 40(3), pages 609-628.
    2. Timoumi, Ahmed & Gangwar, Manish & Mantrala, Murali K., 2022. "Cross-channel effects of omnichannel retail marketing strategies: A review of extant data-driven research," Journal of Retailing, Elsevier, vol. 98(1), pages 133-151.
    3. Liu, Huan & Lobschat, Lara & Verhoef, Peter C. & Zhao, Hong, 2019. "App Adoption: The Effect on Purchasing of Customers Who Have Used a Mobile Website Previously," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 16-34.
    4. Neslin, Scott A., 2022. "The omnichannel continuum: Integrating online and offline channels along the customer journey," Journal of Retailing, Elsevier, vol. 98(1), pages 111-132.
    5. Reinartz, Werner & Wiegand, Nico & Imschloss, Monika, 2019. "The impact of digital transformation on the retailing value chain," International Journal of Research in Marketing, Elsevier, vol. 36(3), pages 350-366.
    6. Shankar, Venkatesh & Kushwaha, Tarun, 2021. "Omnichannel marketing: Are cross-channel effects symmetric?," International Journal of Research in Marketing, Elsevier, vol. 38(2), pages 290-310.
    7. Peng Vincent Zhang & Seoyoung Kim & Anindita Chakravarty, 2023. "Influence of pull marketing actions on marketing action effectiveness of multichannel firms: A meta-analysis," Journal of the Academy of Marketing Science, Springer, vol. 51(2), pages 310-333, March.
    8. Liu, Wei & Zhang, Sha & Bijmolt, Tammo & de Haan, Evert, 2024. "Mobile platform expansion: How does it affect the incumbent food delivery app and other sales channels?," Journal of Retailing, Elsevier, vol. 100(3), pages 422-438.
    9. Melis, Kristina & Campo, Katia & Lamey, Lien & Breugelmans, Els, 2016. "A Bigger Slice of the Multichannel Grocery Pie: When Does Consumers’ Online Channel Use Expand Retailers’ Share of Wallet?," Journal of Retailing, Elsevier, vol. 92(3), pages 268-286.
    10. Mondal, Jalaluddin & Chakrabarti, Somnath, 2021. "The abandonment behaviour of the branded app consumer: A study using interpretive structural modelling approach," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    11. Molinillo, Sebastian & Navarro-García, Antonio & Anaya-Sánchez, Rafael & Japutra, Arnold, 2020. "The impact of affective and cognitive app experiences on loyalty towards retailers," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    12. van Noort, Guda & van Reijmersdal, Eva A., 2019. "Branded Apps: Explaining Effects of Brands' Mobile Phone Applications on Brand Responses," Journal of Interactive Marketing, Elsevier, vol. 45(C), pages 16-26.
    13. Salmani, Yasamin & Partovi, Fariborz Y., 2021. "Channel-level resource allocation decision in multichannel retailing: A U.S. multichannel company application," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    14. Herhausen, Dennis & Kleinlercher, Kristina & Verhoef, Peter C. & Emrich, Oliver & Rudolph, Thomas, 2019. "Loyalty Formation for Different Customer Journey Segments," Journal of Retailing, Elsevier, vol. 95(3), pages 9-29.
    15. Bies, Suzanne M.T.A. & Bronnenberg, Bart J. & Gijsbrechts, Els, 2021. "How push messaging impacts consumer spending and reward redemption in store-loyalty programs," International Journal of Research in Marketing, Elsevier, vol. 38(4), pages 877-899.
    16. Mark, Tanya & Bulla, Jan & Niraj, Rakesh & Bulla, Ingo & Schwarzwäller, Wolfgang, 2019. "Catalogue as a tool for reinforcing habits: Empirical evidence from a multichannel retailer," International Journal of Research in Marketing, Elsevier, vol. 36(4), pages 528-541.
    17. Bies, Suzanne, 2022. "Examining the effectiveness of activation techniques on consumer behavior in temporary loyalty programs," Other publications TiSEM ade86df3-4846-4318-938f-a, Tilburg University, School of Economics and Management.
    18. Daria Plotkina & Landisoa Rabeson, 2022. "The role of transactionality of mobile branded apps in brand experience and its impact on loyalty," Journal of Brand Management, Palgrave Macmillan, vol. 29(5), pages 470-483, September.
    19. Lara Stocchi & Naser Pourazad & Nina Michaelidou & Arry Tanusondjaja & Paul Harrigan, 2022. "Marketing research on Mobile apps: past, present and future," Journal of the Academy of Marketing Science, Springer, vol. 50(2), pages 195-225, March.
    20. Maier, Erik & Wieringa, Jaap, 2021. "Acquiring customers through online marketplaces? The effect of marketplace sales on sales in a retailer's own channels," International Journal of Research in Marketing, Elsevier, vol. 38(2), pages 311-328.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ijrema:v:36:y:2019:i:3:p:420-438. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/international-journal-of-research-in-marketing/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.