The number of U.S. adults buying on mobile is increasing, according to Forrester’s 2023 Retail Mobile Websites report shared with Retail Dive. That data shows that 37% of U.S. adults mobile sites to transact over the past three months, an increase from 29% in 2021. 

The channel is not without its challenges, though. Citing data it collected in 2022, Forrester noted that a third of American shoppers who don’t make smartphone purchases said it’s because it’s easier to transact via computers. About a quarter (23%) said it’s because their screens are too small for shopping.

Guest checkout is key, with more than half (55%) of participants in the firm’s usability test saying it’s a critical feature for retailer’s mobile websites. Two of the 10 retailers Forrester reviewed still didn’t offer guest checkout as an option, per the report.

Forrester’s report pointed to some areas where retailers could improve its checkout experience. The report noted that 13% of U.S. adults said faster checkout is a critical factor in choosing where to shop. But only one of the retailers Forrester reviewed could complete a transaction in under two page loads: Nike. 

The 2022 holiday season illustrated how vital mobile commerce is for winning over shoppers. Mobile shopping comprised over half (55%) of overall online retail sales on Thanksgiving, up 8.3% year-over-year, according to Adobe. Shoppers went on to spend 61% of online sales through their smartphones on Christmas.

E-commerce platforms have been introducing shopping features to improve the mobile experience as well. In November, Etsy unveiled its visual image search capabilities, enabling shoppers to photograph or upload images of items they’re seeking on the marketplace. The following month, Amazon added the Inspire feature to its mobile app, where shoppers can view video and photo content about new products. 

In December, Walmart rolled out a different kind of mobile shopping experience, debuting its Text to Shop tool for iOS and Android users. Users text the name of their desired items to the retailer, which will add them to their shopping cart.

Despite increased adoption, mobile commerce has proved challenging. Earlier this month, Instagram said it is taking down its Shop tab from the homepage, eliminating a dedicated shopping destination, but users can still shop on the app. Shortly after, Pinterest announced that Julie Bornstein, the platform’s chief shopping officer, is transitioning into an adviser role. Bornstein joined the company after it acquired The Yes, the artificial intelligence shopping startup she founded.

When Wegmans announced last September that it would no longer allow shoppers to use their smartphone to scan and pay for items in its stores, the company sparked a firestorm on social media among customers disheartened by the loss of convenience they faced as a result of the retailer’s unexpected move.

The East Coast grocery chain blamed unspecified “losses” stemming from the scan-and-pay service for its abrupt about-face on a program the retailer had trumpeted as a way to give people “the ability to shop how they want” when it rolled out the service in 2019. Wegmans suggested it might bring the service back if it could make “make improvements that will meet the needs of our customers and business,” without offering further details.

But while Wegmans concluded that letting shoppers use self-service checkout technology to breeze through stores came at too high a price, a host of other grocers, including Meijer, Hy-Vee, Giant Food and Kowalski’s Markets and Walmart, continue to offer scan-and-go as an option for shoppers looking to avoid traditional checkout lanes. In addition, other food retailers operating in the U.S. are in talks with vendors about potentially adopting the technology, according to industry officials.

One reason for that interest is that many shoppers have become so accustomed to using their phones to shop for groceries online and search for product information that the ability to use the devices to make in-store purchases is a natural next step, said Randy Crimmins, chief strategy officer of Stor.ai, which provides digital engagement technology to regional retailers.

Stor.ai also sees convenience-focused solutions like scan-and-go technology as a way for smaller retailers to stand out against larger competitors, Crimmins added.

“It’s such a fragmented consumer marketplace out there today that you want to make sure that you’re offering everything you can to appeal to your shoppers and make sure that you not only grow your shopper base, but your retained base, because everybody is nipping at you,” Crimmins said.

Crimmins’ company, which was known as Relationshop until several weeks ago, when it purchased the Israeli e-commerce firm whose name the firm now uses, has been working on a scan-and-go system for the past year and is now testing the technology with an unidentified retailer. Stor.ai intends to move ahead with a live deployment of the system later this year, Crimmins said, adding that the company sees scan-and-go technology as a way to reach more shoppers with features that let people access customized nutritional and other information about products.

Nico Müller, chief commercial officer of Shopreme, a scan-and-go technology supplier based in Austria, said his company has also seen interest in the service from U.S. retailers. The company has had conversations with a “large international retailer” that has a substantial presence in the U.S. about rolling out its system, Müller said.

Shopreme has been offering scan-and-go systems since 2016, and the company’s technology is now in operation at about 1,000 stores in Europe. Shopreme’s clients include German supermarket chains Rewe, which began using the company’s scan-and-go system last year, and Penny, which adopted the technology in 2021.

Mining shopping patterns to stop shrink

Even as they promote the benefits of scan-and-go to retailers, Shopreme and Stor.ai are paying close attention to the drawbacks of the technology.

Müller said that while scan-and-go carries the inherent risk that shoppers might inadvertently or willfully neglect to scan items, Shopreme’s system is designed to mitigate the potential for shrink by analyzing shopping patterns to identify people whose activity warrants stopping them for an audit.

The system pays attention to factors such as whether a shopper has used scan-and-go at a given retailer in the past, their shopping history and the items they are purchasing, with a goal of keeping spot checks to a minimum to avoid unnecessarily inconveniencing consumers, according to Müller.

“There are other parts of experience that are more fun to focus on, but loss prevention is a big topic, of course, and it’s always the first question that is asked when speaking about mobile scan-and-go” with retailers, Müller said. “We have an engine that does nothing else than evaluating which customers to select without making it a hassle, because of course we want to have a smooth experience.”

Müller said Shopreme’s experience working with retailers in Europe is evidence that retailers can find ways to balance their interest in stopping theft with the benefit of offering shoppers the convenience of avoiding a checkout counter. “They wouldn’t have done this if they would see large losses there,” he said.

Crimmins said Stor.ai has also focused on developing methods to limit spot checks to people who are mostly likely to pose a theft risk as a way to avoid inconveniencing scan-and-go shoppers. The company’s approach to minimizing shrink is built around a retailer initially limiting the service to customers who are known to a store, and then gradually making it available to more people based on the retailer’s tolerance for risk, he said.

That method resembles the way Walmart handles its scan-and-go program. The retailer requires shoppers to be enrolled in its Walmart+ membership program, which costs $12.95 per month or $98 per year, in order to use the service.

“Most of our feedback from our testing and from other retailers that have [scan-and-go] applications is that the benefit of having scan-and-go outweighs the risk or the actual amount that they’re losing through fraud,” Crimmins said.

Instacart, which offers scan-and-go as a component of its Connected Stores suite of technologies for retailers, has also focused on developing strategies that keep shrink to a minimum without taking away from the speed and convenience that underpins scan-and-go, said David McIntosh, the vice president in charge of the initiative for the grocer-focused technology company.

Connected Stores also encompasses Instacart’s next-generation Caper smart carts, electronic shelf labels known as Carrot Tags, technology that provides out-of-stock alerts, list-making capabilities for shoppers, and FoodStorm, which allows consumers to order prepared food using in-store kiosks.

Instacart’s scan-and-go technology, which the company calls Scan & Pay, includes software that can identify shoppers who should be stopped for an audit based on factors such as how they are shopping, their scanning speed and whether they are familiar to the retailer, McIntosh said in an interview in September, when Instacart unveiled its Connected Stores initiative. Instacart’s approach to scan-and-go also involves equipping store employees with tablet computers they can use to monitor people’s behavior as they move around the store, McIntosh said.

Trust is a central issue

While checking selected customers’ orders might help keep people from walking out with items they haven’t paid for, making shoppers scan their items a second time can be seen by shoppers as intrusive, said Neil Stern, CEO of Good Food Holdings, a West Coast grocery chain that was the first to sign on to bring Instacart’s Connected Stores program into a supermarket.

Good Food Holdings has not yet committed to add scan-and-go capabilities to the store where it is piloting other technologies in the suite, Stern said.

“We do not have scan-and-go, and I don’t have any immediate plans to try” the technology in Good Food Holdings stores, said Stern, whose company runs several dozen grocery stores under banners including Metropolitan Market, Lazy Acres, New Seasons Market and Bristol Farms. “That doesn’t mean I’m negative on it. I just don’t have it in my IT plans for 2023.”

Stern said his cautious approach to scan-and-go stems in part from the audits that are baked into the concept. “It takes away a little bit of the customer experience you’re trying to provide,” he said. “It’s taking time or it’s saying, ‘I don't trust you,’ and neither one of those is the message you necessarily want to be sending out if you're using this product.”

Gary Hawkins, founder and CEO of the Center for Advancing Retail & Technology, said it isn’t clear whether shopper demand for scan-and-go is strong enough to justify the costs. “It’s something that was developed because technology enabled it, not necessarily because there was some huge shopper demand for that capability,” he said.

Hawkins added that he sees scan-and-go technology as a stepping stone to frictionless checkout solutions that use artificial intelligence-driven cameras to automatically identify and record items as people remove them from store shelves. While only Amazon has deployed the technology, known as computer vision, in full-size grocery stores, Hawkins said he expects more retailers to embrace it going forward as they look to amp up convenience without having to accept the risk people won’t pay for some items.

“That’s where I feel this whole space is going to wind up, simply because of the way it transforms the shopping experience and the multiple benefits that it brings to the retailer,” Hawkins said.

Müller, however, said he is not convinced that computer vision will overtake scan-and-go anytime soon because of the cost and complexity that accompanies installing the cameras and other equipment those systems require.

“For retailers, it’s a huge investment to set up a store” with a computer vision-based checkout system, said Müller. “And we think that mobile scan-and-go, if done well, is a great technology at this time, and I think it will stay so for a considerable time.”

Sponsored content

By Transaction Network Services (TNS)

Businesses are keenly aware of the daily struggle to get their customers to answer the phone. Thank robocalls for that; Americans received nearly 76 billion of them over the past 12 months.

Erosion of trust in voice calling is evidenced by the fact that 75% of consumers will not answer calls from numbers they don’t recognize, according to TNS’ most recent survey. And while the voice channel has always been key to customer communications, it became essential as so many retail brands shifted to digital delivery and pickup operations.

The challenge is clear, and an increasing number of retailers are turning to branded calling solutions to solve it. 78% of consumers are more willing to answer the phone if the caller ID displays the logo and name of a brand they recognize*. In other words, the more information you can offer consumers on an incoming call screen, the more likely they are to answer. This is true in the retail space, where customers look to the voice channel for multiple aspects of the buyer’s journey such as purchase, order status, returns and unexpected issues.

Customer Engagement: A keystone to helping business success for retailers

For retail brands trying to improve customer satisfaction and their brand reputation, it’s crucial to efficiently deliver products and services while consistently engaging their consumers.

Food delivery businesses – which provide over 60 million home deliveries a month across all 50 states – are perfect examples of businesses that rely on phone calls to reach their customers. With millions of deliveries happening daily, the need for real-time engagement via phone calls for directions, status updates, reminders and customer service is imperative, not just for one successful delivery but to maximize the number of deliveries that employees can complete in one night. The more orders the employee can complete, the more potential revenue the organization can add to its bottom line.

At the same time, eCommerce and traditional retailers selling household products ranging from sofas to TVs require successful voice communications with customers to maximize the efficiency of delivery operations.

TNS Enterprise Branded Calling can help increase retail customer engagement

The reverberating effect of unanswered legitimate calls is that more customers are forced to call retailers’ customer support lines – which could lead to overwhelming call centers and longer wait times or for the call center to call the same subscriber multiple times making them less productive.

Many retailers and similar customer service departments now offer a callback or ‘virtual holding’ service that keeps a customers’ place in line without having to be physically on the phone for elongated periods. This automated callback service is a perfect example of the legitimate calls consumers want to receive but are often missed or ignored due to the distrust that stems from unknown numbers.

With consumer demand in place, retailers should seek partners with the branded calling track record, innovative capabilities and customer use cases.

Over the last decade, TNS has branded more than one billion calls, a milestone reflecting TNS’ unparalleled success in converting the promise of branded calling into reality.

To learn more about how TNS can positively help to impact your retail business’ bottom line, visit TNS Enterprise Branding Calling.

Jim Tyrrell is Vice President of Enterprise Product Management at TNS with specific responsibility for TNS’ Communications Market solutions.

*Kantar Survey – May 2022

Digitally native retailers, including DTC brands, sell goods in just about every category, from exercise bikes to lingerie, razors to luggage. But through the years, as they’ve pitched venture capitalists, wooed shoppers, stolen market share and disrupted retail, their basic business models have had much in common.

They operate online, without stores or retail partners. Thanks to that, they easily vacuum up shopper data and keep customer relationships all to themselves. With no rent to pay or physical locations to run, their margins, theoretically, are fatter. And without wholesale, their customers pay full price, directly to them.

But of course, the devil’s in the details. Many digital natives have strayed from their original visions, often in the very ways that purported to make them disruptive in the first place, in an attempt to achieve scale and/or profitability.

“Probably the first domino to fall was ‘you don't have to run stores,’” Rick Watson, founder and CEO of RMW Commerce Consulting, said by phone. “Then the second thing that happens is, a lot of these DTC brands, like Harry’s, have been acquired by bigger consumer product companies. And now folks like Allbirds and others are prioritizing wholesale. Wholesale is cool again.”

Several DTC brands and marketplaces, including Glossier, The RealReal, Casper, Warby Parker, ThirdLove, Peloton, Allbirds, Away, Lively and Wayfair, have opened brick-and-mortar stores. Increasingly, more are also turning to wholesale, which turns out to be an effective channel for boosting sales and margins.

Some continue to change up other aspects of their sales approach. In recent years, for example, Rent the Runway has: introduced various new subscription tiers; dropped unlimited rental; added kids and (with a retail partner) home decor; offered sales of previously rented clothing; opened those sales to non-subscribers; partnered with a retailer to sell those garments; partnered with retailers and hotels for pickup and dropoff; opened then closed its own physical locations; and developed exclusive designs.

Stitch Fix has similarly shifted its approach numerous times. The box e-retailer expanded to the U.K., added men’s and kids’ clothes to its offer, allowed box subscribers to buy garments a la carte, provided previews of curated boxes so customers could reject or accept certain items, opened its a la carte website to all consumers, added a search function to that site, then restricted it once again to only those who have ordered a box.

Exercise bike company Peloton has scrambled to adjust prices and make other changes after its pandemic-era boom fizzled. Those that are dependent on clients signing up for a membership are grappling with the decline of that model, according to Watson. ThredUp and Nordstrom appear to have taken that note, as both shut down their curated box services in the last couple of years.

“I think people are subscriptioned out,” Watson said. “So I think they're grasping at straws a little bit. They need to find a next act. That's definitely Stitch Fix. RealReal just has pretty major profitability issues. If they sold higher-margin goods, maybe they can charge more and turn a profit on those things. The challenge is, the site then becomes so exclusive that how many items are those in the world?”

Expanding what turns out to be, for many digital natives, a niche customer base is getting harder as venture capital money has dried up and customer acquisition costs have soared, Watson also said. Fundamentally, more of these companies, including of late Thirteen Lune, Our Place and Vuori, realize the tweak they need most is selling through brick and mortar.

"Regardless of the model that a DTC adopts, the math simply doesn’t support an online pure-play retail model of any kind that can be sustained against those that have a physical presence and can copy whatever someone else does online,” Forrester Principal Analyst Brendan Witcher said by email. "Not enough consumers have shown the propensity to remain long-term, loyal customers of a pure-play, online-only retailer. If they did, these companies would not have to spend the millions of dollars in advertising and marketing that wipe out their profitability.”

While the pandemic super-charged e-commerce, that acceleration will serve to slow its growth somewhat over the next year or two, especially as consumers return to stores, according to Euromonitor Senior Consultant Rabia Yasmeen. The first wave of e-commerce’s disruption is giving way to a new era, she said by email.

“As current trends clear the path ahead for physical retail – we can see the next development of retail would see integration of physical and digital, with one supporting the other,” she said. “Hence, years of dynamic, double digit e-commerce growth are likely to be only seen in the case of unusual circumstances.”

As Walmart’s business model evolves, a focus on omnichannel strategy is the thread tying together its e-commerce business, fulfillment services, advertising and more, Walmart President and CEO Doug McMillon said at Morgan Stanley’s Global Consumer & Retail Conference on Wednesday. 

Walmart hasn’t been shy about touting its omnichannel efforts and why catering to meet shoppers’ needs across in-store and online channels can boost profitability. 

“We’ve shared before — if people buy in-store and online with Walmart.com, they generally spend twice as much and they shop in-store more often,” McMillon said. The retailer giant is “very excited” about automation as it builds out its e-commerce fulfillment, McMillion added.

McMillon’s sit down with Morgan Stanley Analyst Simeon Gutman provided more details into the role automation plays, which fulfillment methods the retailer is relying on and how e-commerce connects to its alternative income streams and overall profits. 

High-tech supply chain

McMillon said his confidence in Walmart growing its top-and bottom-line growth is partly driven by the chance to improve productivity through automation, particularly with its supply chain. 

“There's more in front of us to do with the supply chain in particular and we're very excited about automation. And I think it's going to really help our store associates and help us with productivity,” McMillon said.

He continued: “Specifically, what we're seeing is — after a number of years of work — there are opportunities to use automated storage and retrieval systems in ambient distribution centers, food distribution centers, e-commerce fulfillment centers and eventually market fulfillment centers next to stores.”

Automation can create customized e-commerce orders for customers or as department- and store-specific pallets, McMillon said. In the U.S., the retailer already receives grocery products on pallets, which make freight handling easier. Now, the retailer wants to use that model for general merchandise and enable stocking from the pallet, he said. 

“It's a different process, eliminating a lot of the hours that we invest in today in the back room of our stores,” he said.

Walmart is turning to automation to not only boost productivity but also to help reduce labor costs. “One of the biggest costs that we have in our e-commerce businesses is for store-level wage investments to pick orders,” McMillon said. 

McMillon said Walmart is working with four different partners on the four types of fulfillment centers. As Walmart has layered on those different types of fulfillment centers, starting with ambient and then adding food and e-commerce with different operating systems, the retailer has worked to sync them together and optimize inventory. Data and algorithm improvements and robotics with its supply chain are allowing for better demand forecasting, allowing for new ways to reduce costs, McMillon said.    

Walmart has also focused on outfitting its existing distribution centers with automated storage and retrieval systems to avoid having to build more facilities, McMillon added.     

In some cases, the retailer is choosing to add new facilities where they’re needed, including a recently opened one in Chicago — the first of four high-tech fulfillment centers Walmart is building over the next three years.        

“There's not a lot of human engagement with that product,” McMillon said about the Chicago facility. “There's still some, which eventually we'll work through to an even greater degree, but it is really slick and also more accurate.”  

Walmart is also using store-level fulfillment in other cases, leveraging the last-mile advantage of store locations near customers and carving out space for micro-fulfillment centers (MFC) while retaining in-person shopping, McMillon said. 

This fall, the retailer bought MFC developer Alert Innovation, following work on a multi-year pilot of the company’s robotic grocery order-fulfillment technology, known as Alphabot. Walmart Chief Financial Officer John David Rainey told investors during its third-quarter earnings call that the retailer is expanding its buildout of MFCs that are attached to or inside its supercenters. 

Evolving business model

The multi-year investment in revamping its supply chain is happening in tandem with changes to the retailer’s business model to focus more on omnichannel strategy, McMillon said.

Walmart has long focused on its stores. But as the retailer built up its e-commerce business, in-store and online shopping felt siloed as recently as last year, McMillon said. Through organizational structure changes, the retailer has achieved a more seamless shopping experience by doing away with channels, McMillon said.

The company is using income from its fulfillment services, advertising and Walmart+ membership to help support its investments in areas that are not yet profitable, while also running its retail business, McMillon said. Among its alternative businesses, Walmart’s marketplace is the top priority due marketplace seller fees and its connection to the retailer’s fulfillment and advertising offerings, he said. 

Building out digital relationships with customers can help the retailer steer people toward its Walmart+ memberships. 

“The primary reason why someone would want to become a Walmart+ member is for free delivery and our food
and consumables customer value proposition is attractive. ... Our challenge is to take that frequently purchased set of items in that relationship and have it extend into more discretionary items and build the basket out over time,” McMillon said. 

Ultimately, Walmart can “see all the pieces” of the technologies it’s leveraging adding up to a profitable model, McMillon said.

So far, the work appears to be paying off: For its U.S. business, Walmart recorded e-commerce sales growth of 16% and 12% in its third and second quarters of fiscal year 2023, respectively — a jump from the 1% increase it recorded in its first quarter. 

“Now, I think we are truly an omnichannel retailer,” he said. 

Changing the way consumers access commerce on its app, Meta-owned Instagram will remove its Shop tab from the homepage navigation bar in February, according to a post on the company’s support site. A Meta spokesperson told Retail Dive via email that “there will no longer be a dedicated shopping destination. However, people will be able to continue to shop in the moment across feed, reels, stories, explore, and ads.”

Instagram said the navigation bar update — which also includes moving the content creation button to the center — is part of an effort to “make it easier for people to share and connect with their friends and interests,” per the support post.

While the Shop tab will be removed, the social media company said businesses will still be able to set up their shop on the Instagram app, and it continues to invest in shopping experiences. 

Months after The Information reported that Instagram told internal employees its shopping page would eventually disappear, the company is formally acting on it. The company had reportedly told employees in a September memo that it had a shift in priorities and would test a less personalized version of the shopping page.

When asked about the reporting at the time, a Meta spokesperson told Retail Dive via email that “commerce remains important for Instagram as we continue to make it easier for people to discover and shop products throughout the app from feed, stories, reels and innovations like live shopping and drops.”

Head of Instagram Adam Mosseri said in a video Monday that the new navigation is meant to simplify the app experience, adding “we’re trying to bring people together over what they love.”

During 2022, Instagram had a plethora of announcements related to social commerce. The social media company expanded product tagging capabilities to all users in April, and celebrated Shop’s anniversary with an in-person pop-up event in May. Additionally, Instagram launched a pay-in-chat feature aimed at helping small businesses finalize transactions through direct messaging in July. 

However, Meta’s Facebook platform shut down its live shopping feature in August, stating that consumers' behavior patterns were favoring short-form videos such as Reels. 

The Shop tab on Instagram brought in additional ad potential, with the company in August of 2021 expanding advertisement capability on the feature globally after testing it with select brands in the U.S. for a few weeks. 

As Meta finds its footing in the social commerce space, some data suggests the channel could grow faster than e-commerce overall. An Accenture report from January 2022 forecasts the global social commerce industry could grow three times as fast as e-commerce, from $492 billion in 2021 to $1.2 trillion by 2025. Gen Z and millennial consumers are predicted to lead growth, according to Accenture, which found those generations would account for 62% of global social commerce spend by 2025.

After testing the feature in 2021, Walmart has launched a free Text to Shop functionality for iOS and Android users, according to a Wednesday blog post from Vice President of Conversational Commerce at Store No. 8 Dominique Essig. Store No. 8 is Walmart’s retail startup incubator, which launched its first project in 2017.

Connected to a user’s Walmart account, the Text to Shop function knows what a customer’s usual items are. Shoppers can text the name of a general item — such as “cereal” — and the retailer will add the brand and type typically ordered to the user's cart, allowing shoppers to swap it, change the quantity or remove it. 

Walmart’s Text to Shop function also allows shoppers to check out their carts via text or in the Walmart app. Customers can also schedule a time for pickup or use delivery.

While Text to Shop is technically a new feature offered by Walmart, it isn’t the company’s first foray into text-based shopping.

In 2018, the retailer started beta testing a higher-end service called Jetblack. Jetblack was a text-based concierge and shopping service marketed toward busy, wealthy customers in cities. Onboarded with an initial 10-minute phone call (and potentially a home visit to further personalize the experience), customers were able to text questions and requests to Jetblack that ranged from support for gift ideas to placing general household orders. A mixture of artificial intelligence and human knowledge was utilized for the service.

In 2020, however, the service was shut down by Walmart. At the time, a Walmart spokesperson said this was part of an effort to move the service from an “incubation” period to Walmart’s broader organization. The spokesperson noted that following its discontinuation, it would focus on scaling the concept.

Two years later, Walmart’s Text to Shop appears to be making good on that promise.

The new functionality doesn’t appear to be marketed only to higher-income shoppers, but instead is focused on providing convenience for any Walmart customer who has an account.

“We know that for busy families and young professionals, finding opportunities to slow down and live in the moment is a priority,” Walmart’s Essig said in a statement. “That’s what inspired Text to Shop.”

Mobile commerce continues to evolve as more shoppers are using their phones to engage with brands. On Thanksgiving Day last month, 55% of online sales were through mobile, according to Adobe Analytics. This was an all-time high, increasing 8.3% from last year. And on Black Friday, another record was hit with mobile commerce accounting for 48% of online sales compared to 44% in 2021. 

Mobile experiences have become a vital part of Nike's marketing strategy, providing a direct sales channel and a way to maintain one-to-one relationships with its most loyal customers.

Nike saw a 150% jump in demand on its app in Q1 2020, as announced in a conference call with analysts in September 2020 to discuss earnings. In addition, Nike saw an almost 200% increase in demand for its commerce app, with "triple-digit" growth in monthly active users.

More than half of members of its Nike Training Club used its app to start a workout, a record high for the company, CFO Matt Friend said during the call. The training club app is separate from the Nike shopping app, and offers virtual workouts, yoga classes and health tips.

Amid a consumer shift to digital and mobile amid the coronavirus pandemic, the Nike Run Club app posted its fourth consecutive month of more than 1 million downloads as more people followed its audio-guided runs. More women than men completed runs on the app for the first time in company history, Friend said.

Nike's active members rose by nearly 60%, and it saw higher growth for buying members, CFO Matt Friend said. While most of Nike's brick-and-mortar stores were open during the quarter, many shoppers have avoided malls and stores during the pandemic. The growth in demand for its mobile apps has helped to support digital sales growth of 82% for Nike-branded products.

Nike likely boosted usage of its apps after dropping the subscription fee for its NTC Premium service in March, as pandemic lockdowns went into effect in many countries, including the U.S. The premium suite of services encompass the Nike App, the Nike Run Club app, the Nike Training Club app, social channels, nike.com and its "Trained" podcast. With more people stuck indoors, Nike revamped its marketing and debuted a new slogan, "Play inside, play for the world," along with corresponding hashtags on social media.

Nike has run a variety of mobile-based campaigns this year to help support its digital sales channels worldwide. In July, Nike published a custom magazine in Japan that let readers color black-and-white drawings of its Air Max sneakers and see their work in a 3D augmented reality (AR) experience on their smartphones. The campaign was targeted at Japan's design community, with only 1,000 copies of the magazine handed out at stores. In May, Nike set up a microsite that asked Brazilian customers to raise their phones to the sky to see an AR cloud shaped like an Air Max sneaker. After finding the digital cloud, they were given a chance to unlock exclusive digital content. The campaigns were a sign of how Nike has embraced mobile-based experiences to drive sales growth.

Digital sales were a bright spot for Nike, whose revenue slipped 1% to $10.6 billion in the most recent quarter from the prior year. Its net income grew 11% to $1.5 billion, as digital channels added $900 million in incremental revenue from last year. That increase met Nike's goal of reaching 30% of revenue from digital channels three years ahead of schedule. As stores reopened in China, Nike introduced a concept store called Nike Rise that supported brand interactions on mobile devices, such as the Nike Experiences feature in its app.

Alongside other retailers launching mobile apps, Pottery Barn Kids and Pottery Barn Teen have introduced shopping apps for iOS, the retailers announced Wednesday. 

With the apps, shoppers can create registries, browse products across age groups, view and purchase items from 3D rooms, save their favorite products and make purchases using Apple Pay, according to the announcement. 

Shoppers can also schedule appointments to meet with its designers in-store, at home or online.

Dive Insight:

Pottery Barn Kids and Pottery Barn Teen have joined other home goods retailers that have released mobile apps.

“The development of our mobile shopping apps was a coordinated effort focused on delivering a seamless, convenient customer experience. As brands who put digital first, the apps offer a new way to shop, find design inspiration and create and manage a registry on-the-go,” Jennifer Kellor, president of Pottery Barn Kids and Pottery Barn Teen, said in a statement. 

Meanwhile, other retailers have invested in mobile apps, too. In November, True Religion launched its mobile app and expects app to generate 10% of its e-commerce sales this year. In October, At Home debuted its own mobile app and expanded its same-day delivery to all locations. And in August, Bath & Body Works unveiled a mobile app alongside its new loyalty program that lets customers earn rewards points, shop and store their gift cards. Last March, Chico’s FAS debuted mobile apps across all of its portfolio brands.

The 2022 holiday season illustrated how critical it is for retailers to have a digital presence. Research from Adobe found that e-commerce sales rose 3.5% year-over-year between Nov. 1 and Dec. 31 to $211.7 billion. The same report found that nearly half of online sales came from smartphones in the 2022 holiday season.