App Adoption: The Effect on Purchasing of Customers Who Have Used a Mobile Website Previously

A key question for retailers who already offer a mobile website is, whether they should add an app as an additional purchase channel. We address this issue by exploring whether consumers' app adoption stimulates additional purchases and how this change in purchase behavior differs across customers with different levels of spending share for different product categories and customer loyalty. By using transactional data from a Chinese online retailer, we show that app adopters have higher purchase incidence, buy more frequently, and spend more in each order than non-adopters. We also find that app adoption has a stronger positive effect on the order size of customers who have a lower spending share of high-price products and customers who are less loyal to the focal retailer. Hereby, we contribute to multichannel and mobile marketing literature by empirically examining the effects of adding a similar (mobile) purchase channel to an already established (mobile) purchase channel. Managerially, our results suggest that apps are worth investing in despite their similarity to mobile websites and can induce non-loyal customers to purchase more and thus potentially foster these customers' loyalty