The Holiday Gift That Doesn’t Keep Giving: Black Friday’s Doubling of New Shopping App Customers Sees Long-Term Value Quickly Erode

For brands that experience a flood of new installs during peak shopping days like Black Friday, the secret to capturing the value of that effort is what happens next. But what if peak installers aren’t all they’re cracked up to be? 

For apps, peak install periods are the most significant value creation opportunities — and also the most costly due to more paid install competition. To quantify the opportunity and bring greater urgency to value-capture efforts, our team at Airship analyzed mobile app lifecycle and retention data aggregated across more than 60 million new shopping apps first installed between Oct. 1 and Nov. 27 (Cyber Monday), 2023. 

Some of our key app install findings include:

• Peak Day: Going on a decade, Black Friday is the top day of the year for customers to install a shopping app — double the daily average rate for October.
• Peak Week: Six of the top seven peak shopping app install days were Nov. 19-25, which is much more tightly grouped than prior years. This peak week saw 40% more app installs than October’s weekly average. 
• Pre-Holiday: Five of the seven lowest daily app install days were Oct. 1-7, providing a one-week pre-holiday cohort to compare against peak-week customers.

A June 2023 report titled “Unlock Your Revenue Growth Potential” from Forrester Research explains why the stakes are so high with these users: “When acquisition costs are high, customer lifespans need a long enough runway to amortize those costs and generate returns. In other words, brands must hold on to newly acquired customers for dear life.” 

Wake Up, Retailers! 
The core finding of our retention analysis should be a wake-up call to retailers everywhere: by Week 3 after install, any advantage gained in this merriest time of year is wiped out as peak-week customers go on to average 18% lower weekly retention rates than customers acquired pre-holiday. By Week 15, peak-week retention rates plummet further.

A three percentage point difference at Week 15 — +27% greater than peak week’s rate — can equate to massive future value. Research done by Frederick Reichheld of Bain & Company found a 5% increase in retained customers yields 25-95% more profit. More recently, Google/Ipsos found that 74% of retail decision-makers say investing in mobile apps is key to driving profitability and important for long-term success (85%). 

Despite the peak growth opportunity and overall importance of apps, the two cohorts exhibit a similar retention pattern, suggesting retailers don’t treat peak-week app customers any differently from pre-holiday customers — despite the holiday frenzy’s urgent, transactional focus. Essentially, retailers allow peak-week customers to remain transactionally focused, which is reflected in lower retention rates before Christmas has even arrived. In addition, both cohorts see 38% of new users only open the app once within the analysis time frame (Week 0), helping to account for the Week 1 retention rate. 

Capturing Value Requires Advancing Customers Through the App Lifecycle
Rather than focusing on rear-view retention rates, retailers should focus on advancing customers through the mobile app lifecycle — from acquisition to activation, engagement and loyalty. To help, we compared the peak-week and pre-holiday cohorts with a subset of metrics used to gauge and optimize progress through the activation and engagement lifecycle stages. 

During activation (Day 1-30 after download), the most successful apps focus on understanding customers’ preferences and interests while gaining ways to communicate with them. Identified User Coverage, which is the number of devices with a unique customer ID divided by total devices, is a key metric as it allows brands to link customer data from prior interactions and across channels to better personalize and orchestrate future interactions. Customers gained during pre-holiday have 3% higher Identified User Coverage rates than peak-week adopters. Perhaps due to seasonality and promotions or rewards requiring registration, both cohorts come in above the February shopping category averages: 10% higher for pre-holiday customers and 7% higher for peak week.

Metric comparisons for the engagement lifecycle stage included Average Sessions Per Active User, Average Session Length (in minutes per month), and Airship’s Engagement Score, which indicates how many monthly active users return on a daily basis. 

• Pre-holiday customers’ February 2024 Engagement Scores are 8% higher than the shopping category average and 14% higher than peak-week customers’, further illustrating the transitory, transactional nature of the latter cohort. 
• Pre-holiday customers also lead in Average Sessions Per Active User, with February 2024 totals 17% higher than peak-week customers and 9% higher than the shopping category average. 
• The only engagement metric where peak-week customers outperformed pre-holiday customers was Average Session Length, with .006 more monthly minutes in February 2024 (+.4%). Both cohorts are 9% below the February shopping category average for session duration.

While customers are flocking to shopping apps to find the best deals, earn rewards and gain exclusive access, retailers need to focus on how they can turn installs and first transactions into ongoing use. 

For best practices, additional metrics, and benchmarks to compare activation and engagement performance across app store categories, check out Airship’s reports: Mobile Lifecycle Benchmark: Activation and Mobile Lifecycle Benchmark: Engagement. You can also check out Airship’s April 11 webinar, Capture Customer Attention: 3 Strategies in 30 Days, for insights on how to elevate your activation game.