App Stickiness Makes Recovery, but the Pressure is On
See what the folks at Localytics have to say about "App Stickiness" as they evaluate recent mobile application launches and the metrics determining their success or failure. Will 2016 be a banner year for mobile apps?
Join the DZone community and get the full member experience.Join For Free
The path to app success lies in a true understanding of your audience. In today’s mobile world, that path is defined by two types of data: 1) in-depth user insights and 2) KPIs that move beyond vanity metrics (like downloads) and instead measure the things that matter in mobile, like user engagement and retention.
With that mind, every year Localytics measures two important app success metrics - App Stickiness and App Launches. Stickiness provides insight on how frequently users are engaging with apps and how many people are still engaging with them months later. It’s a short term and long term measurement of an app’s health. App Launches help measure one of the first big challenges app owners face: getting people to open the app.
According to our data, both App Stickiness and App Launches saw notable increases in 2015. The average App Stickiness for the year came in at 25%, outperforming 2014’s average of 21% and coming in the highest it’s been since 2012. App Launches also had a growth year, with an average of 11.4 launches per month, an increase of 13% from 2014 (check out a more detailed report of our findings here).
This data shows that apps are getting better at engaging their mobile users. However, the work is not done, and with the added pressure of uncertain economic times, now is not the time to take the foot off the gas. Even with an all-time high Stickiness of 25%, that still means 75% of users are not using apps frequently and consistently (Share This!). Nor has retention made a complete comeback from its 2012 high of 24%, ending 2015 at 18%.
It’s also important to note that this data represents businesses who have invested in a mobile engagement solution (ours, that is; see Methodology for more information). We know that this means our data likely represents the best case scenario and that there’s still a long way to go.
In order to understand how to keep the momentum going in the right direction, let’s dig into the details of what happened in 2015. Before we dive deeper, let’s start with a refresher of the terminology you’ll need to understand:
- Engagement: As measured by Power Users – the percentage of an app's users who have logged 10+ sessions in a month (i.e. how many highly engaged users an app has).
- Retention: As measured by Loyal Users – the percentage of an app's users who return to the app within 3 months of their first session (the industry benchmark to measure loyalty and churn).
- App Stickiness: Average of an app's Engagement and Retention.
- App Launches: Average number of times an individual app is launched per month.
2015: A Comeback Year for Apps, but the Pressure is On
2015 was a comeback year for App Stickiness, after a poor performing 2014. The average app’s Engagement increased to 31%, meaning 31% of users came back to their apps more than 10 times a month. This is a significant lift from the three previous years: 26% in 2014, 25% in 2013, and 24% in 2012.
Retention bounced back from a disappointing first half of 2015 to reach an average of 18% for the year, the highest since 2013. In other words, 18% of users were still returning to an app three months after they first downloaded it, a sign of their loyalty. This overall increase was driven primarily by Media and Entertainment apps, where the value exchange between users giving personal data and marketers using that data to provide value is being fulfilled.
Remember, this data is based on apps using our mobile engagement platform and may differ from other published metrics. For example, others have reported that only 5% of users are still returning to an app 90 days after the install (for Google Play apps only) whereas our data shows it is 18%. With the help of a mobile engagement platform, app marketers are able to learn about their users and employ specific techniques to keep them coming back, thus having higher retention in the long term.
As a result of improved Engagement and Retention, App Stickiness was the best it’s been since 2012, with an average of 25%.
Lastly, App Launches continued to steadily increase throughout the year, with an average of 11.4 launches per month and even reaching an all-time high of 12.8 in October.
While both Stickiness and App Launches improved in 2015, brands looking to improve their mobile strategy still face notable challenges when you consider the other side of these numbers. For instance, 69% of users returned to apps less than 10 times a month and 82% of users have churned by the third month of using an app.
The numbers in this report certainly show an improvement for apps overall, but it is imperative to keep the momentum going to keep up. As economic pressure starts to exert its influence on our businesses, it’s more important than ever for marketers to continue to learn more about their users in order to deliver an experience that delights them, and ultimately, keeps their businesses growing.
In the following section, we take a closer look at how these metrics played out across different industries to see which ones fared the best and which ones need to make the most improvements.
Holiday Season Provided Big Boost for eCommerce and Retail Apps
The second half of 2015 saw a major increase in App Launches for eCommerce & Retail apps, hitting an all-time high of 18.6 launches in October. These apps are starting to provide a personalized shopping experience and more convenience, two benefits that continue to be high on consumers' priority lists. Additionally, the introduction of new devices around the holiday season also brought a bevy of new users who are trying out apps for the first time, including for mobile for shopping and purchasing. As a result, eCommerce & Retail apps saw 24% more new users in their apps between Q3 and Q4.
As more retailers invest in personalized experiences, the winning companies will be those who truly understand their users in their moments of need, especially during the holidays.
Major Trends and Events Contributed to Success of Media and Entertainment Apps
Media & Entertainment apps saw an increase in both Engagement and Retention, giving the vertical the title of "most sticky". The average Stickiness was 29% for the entire year, outperforming the previous three years.
This should not come as a huge surprise as Media & Entertainment apps are ahead of the curve when it comes to personalization and striking the balance between asking for information and using it to provide value. The New York Times is a great example. They understand the importance of providing users with content based on their behavior or interests, explaining why they are so successful in engaging users frequently and over time.
This vertical has also emerged as one affected by events or trends around the world, like the Super Bowl. The number of smartphone users continues to rise and is now a main source of information for people of all ages. This information can also come from many different outlets, including social networking and live-streaming apps as brands look for new ways to engage users.
TV streaming has also quickly become the main way for people to watch their favorite shows. Services such as Netflix and Hulu are creeping into the space of traditional television with great success. People no longer have to wait each week for a certain time to watch their show. With these apps, television shows and movies are there whenever they want them.
With events and trends benefiting this industry, there are plenty of opportunities for Media and Entertainment apps to get to know and engage users and maintain their status as “most sticky.”
Technology Apps Catching Up to the Mobile Times
The Technology vertical experienced a peak Stickiness of 26% in November, the highest since October 2013. Increases to both Engagement and Retention gave this vertical its best year to date. The average Stickiness for the year was 22%, higher than the previous 3 years.
We take this as a sign that B2B companies and other laggards are finally paying attention to mobile. More conventional industries, like healthcare and education, are creating more mobile-friendly businesses to meet the demands of consumers. But as this vertical has been the slowest to adopt a mobile mindset, it is imperative for these companies to invest in mobile engagement now, or else run the risk of others beating them to the punch.
Travel and Lifestyle Apps Have Room to Grow
Travel & Lifestyle apps experienced both a decline in Stickiness and App Launches. These apps had a difficult time keeping users engaged, shown in the drop of Engagement and App Launches. With the most ground to make up, travel apps need to really put the pedal to the metal and improve their user experiences by first getting to know their users and understanding what has happened over the course of the past year.
Engagement peaked in August of 2015 at 30%, but by the end of 2015 dropped to 26%. Additionally, the average App Launches for the vertical dropped from 12.5 in the first half of 2015, to 11 in the second half of 2015.
A recent survey by Business Travel News detailed a gap between what travel companies think their users want and what those users actually want. This means these apps are missing out on valuable moments within the travel experience to help their users. Travel companies need to learn about “the traveler and the travel journey at any point in time and in the context of the decisions they need to make.”
Mobile is changing the way people travel. Phones are now the way for people to stay updated on their travel plans or find things to do. It is now up to these apps to learn how to cater to the new experience.
Even though 2015 was a successful year for apps, there is still more work to be done in order to effectively build loyal relationships with mobile users. This year an average of 31% of users visited apps 10 or more times a month, but that means 69% of users did not frequently engage with apps (Share This!). Similarly, Retention recovered from last year with an average of 18%, but this is still miles behind the average Retention of 2012 which stood at 24%.
App marketers need to build on the success of this year and find ways to convert that 69% into highly engaged users while encouraging users to stick around in the long term. To continue down the path of success, marketers must build a deep knowledge of their users’ behaviors, motivations, and preferences so that we continue to see the upside of our mobile investments. We’re up for the challenge; are you?
Localytics is the leading mobile engagement platform across more than 2.7 billion devices and 37,000 mobile and web apps. Localytics processes 120 billion data points monthly. The App Launches metric is measured as the average number of times a user opens an app in a given month. Stickiness is made up of an average of two variables: Retention and Engagement. Retention is measured as the amount of users who are still visiting an app 3 months after their first visit. Engagement is measured by the percentage of users who visit an app 10 or more times in a given month. The time frame for the App Launches and Engagement analysis was June 2015- December 2015. The time frame for the Retention analysis was May 2015 - December 2015.
Published at DZone with permission of Caitlin O'Connell, DZone MVB. See the original article here.
Opinions expressed by DZone contributors are their own.