Why many ecommerce startups build apps that fail to pay off — and what to do instead

The useful part

Most ecommerce startups did that work, and most did it reasonably well, too. Phones now account to the bulk of online shopping traffic, so a truly clunky mobile site has become rare. A mobile website is where people land, but a shopping app is something a customer chooses to keep on their phone.

How it works

• Atul Poharkar, CEO of app-building platform AppMaker works with hundreds of ecommerce brands on this problem.
• Personalization, however, only works if people keep opening the app, and that's where the more ambitious brands are pulling ahead.
• "The bigger shift is that brands are thinking about what gives someone a reason to open the app when they're not shopping." Chewy shows how far that idea can go.
• members in its most recent fiscal first quarter, and the company has since reworked the program into three tiers, with new benefits aimed at its most engaged members.
• "We see a lot of thought go into features and functionality, but the real work starts after launch," he explained.

What to take from it

"We're seeing brands invest more in personalization because the experience itself is becoming a growth lever," he said. Poharkar described apps with online pet clinics, vaccine trackers for parents of babies, interactive color guides for fashion shoppers, AI try-ons and games built for high engagement. Acquiring the right users, keeping them engaged, bringing them back and turning that engagement into revenue each need their own logic.

Example or evidence

• The largest gap Poharkar sees is between what a brand wants to build and whether it has a plan for getting people to use it.
• The holiday window With the holiday season getting closer, Poharkar's advice is to get an app live before it starts, which still leaves time to build something tied to the season – think personalized home...
• This is also where the build-or-buy question gets practical.
• "Building an app in-house is a big investment of time, engineering effort and money, and you then have to keep maintaining it as the ecosystem changes." For a startup with a three-month runway to the...

Details worth keeping

That's the small decision that changes the economics of the relationship: shopping apps tend to convert better than mobile browsers and see far less cart abandonment, but many young brands still treat the app as an optional extra, or as one more place to sell. The brands pulling ahead have caught on to that shift, and in his view, a lot of startups are still spending money in the wrong places trying to get there. For a startup, the logic is simple: the same customer, arriving with the same intent, sees something more relevant to them and is more likely to buy.

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