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The Effects of Adopting and Using a Brand's Mobile Application on Customers' Subsequent Purchase Behavior

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  • Kim, Su Jung
  • Wang, Rebecca Jen-Hui
  • Malthouse, Edward C.

Abstract

Mobile applications (apps) have become an important platform for brands to interact with customers, but few studies have tested their effects on app adopters’ subsequent brand purchase behavior. This paper investigates whether adopters’ spending levels will change after they use a brand’s app. Using a unique dataset from a coalition loyalty program with implementations of propensity score matching and difference-in-difference-in-difference methods, we compare the spending levels of app adopters with those of non-adopters. Specifically, we examine whether the use of the app’s two main interactive features—information lookups and check-ins—influences adopters’ spending levels. We find that app adoption and continued use of the branded app increase future spending. Furthermore, customers who adopt both features show the highest increase. However, we also observe “the recency effect” – when customers discontinue using the app, their spending levels decrease. Our findings suggest that sticky apps which attract continuing uses can be a persuasive marketing tool because they provide portable, convenient, and interactive engagement opportunities, allowing customers to interact with the brand on a habitual basis. We recommend that firms should prioritize launching a mobile app to communicate with their customers, but they should also keep in mind that a poorly designed app, which customers abandon after only a few uses, may in fact hurt their brand experience and company revenues.

Suggested Citation

  • Kim, Su Jung & Wang, Rebecca Jen-Hui & Malthouse, Edward C., 2015. "The Effects of Adopting and Using a Brand's Mobile Application on Customers' Subsequent Purchase Behavior," Journal of Interactive Marketing, Elsevier, vol. 31(C), pages 28-41.
  • Handle: RePEc:eee:joinma:v:31:y:2015:i:c:p:28-41
    DOI: 10.1016/j.intmar.2015.05.004
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    1. Mary Beth McCabe & Mary Beth McCabe, 2019. "Mobile Marketing Strategies For Educational Programs," Business Education and Accreditation, The Institute for Business and Finance Research, vol. 11(1), pages 111-121.
    2. De Vries, Eline L.E. & Zhang, Sha, 2020. "The effectiveness of random discounts for migrating customers to the mobile channel," Journal of Business Research, Elsevier, vol. 110(C), pages 272-281.
    3. Edward C. Malthouse & Wei-Lin Wang & Bobby J. Calder & Tom Collinger, 2019. "Process control for monitoring customer engagement," Journal of Marketing Analytics, Palgrave Macmillan, vol. 7(2), pages 54-63, June.
    4. van Noort, Guda & van Reijmersdal, Eva A., 2019. "Branded Apps: Explaining Effects of Brands' Mobile Phone Applications on Brand Responses," Journal of Interactive Marketing, Elsevier, vol. 45(C), pages 16-26.
    5. Unnati Narang & Venkatesh Shankar, 2019. "Mobile App Introduction and Online and Offline Purchases and Product Returns," Marketing Science, INFORMS, vol. 38(5), pages 756-772, September.
    6. Siliang Tong & Xueming Luo & Bo Xu, 2020. "Personalized mobile marketing strategies," Journal of the Academy of Marketing Science, Springer, vol. 48(1), pages 64-78, January.
    7. Ladhari, Riadh & Gonthier, Jessica & Lajante, Mathieu, 2019. "Generation Y and online fashion shopping: Orientations and profiles," Journal of Retailing and Consumer Services, Elsevier, vol. 48(C), pages 113-121.
    8. Mirza A. Haq, Arsalan Mujahid Ghouri, 2017. "Distinctive Characteristics of Mobile Advertising in Measuring Consumers' Attitude: An Empirical Study," Journal of Management Sciences, Geist Science, Iqra University, Faculty of Business Administration, vol. 4(2), pages 199-216, October.
    9. van Heerde, Harald J. & Dinner, Isaac M. & Neslin, Scott A., 2019. "Engaging the unengaged customer: The value of a retailer mobile app," International Journal of Research in Marketing, Elsevier, vol. 36(3), pages 420-438.
    10. LaBrie, Ryan C. & Steinke, Gerhard H. & Li, Xiangmin & Cazier, Joseph A., 2018. "Big data analytics sentiment: US-China reaction to data collection by business and government," Technological Forecasting and Social Change, Elsevier, vol. 130(C), pages 45-55.
    11. Liu, Huan & Lobschat, Lara & Verhoef, Peter C. & Zhao, Hong, 2019. "App Adoption: The Effect on Purchasing of Customers Who Have Used a Mobile Website Previously," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 16-34.
    12. Yoonseock Son & Wonseok Oh & Sang Pil Han & Sungho Park, 2020. "When Loyalty Goes Mobile: Effects of Mobile Loyalty Apps on Purchase, Redemption, and Competition," Information Systems Research, INFORMS, vol. 31(3), pages 835-847, September.
    13. McLean, Graeme & Osei-Frimpong, Kofi & Al-Nabhani, Khalid & Marriott, Hannah, 2020. "Examining consumer attitudes towards retailers' m-commerce mobile applications – An initial adoption vs. continuous use perspective," Journal of Business Research, Elsevier, vol. 106(C), pages 139-157.
    14. Shankar, Venkatesh & Kleijnen, Mirella & Ramanathan, Suresh & Rizley, Ross & Holland, Steve & Morrissey, Shawn, 2016. "Mobile Shopper Marketing: Key Issues, Current Insights, and Future Research Avenues," Journal of Interactive Marketing, Elsevier, vol. 34(C), pages 37-48.
    15. Francesca De Canio & Marco Ieva & Cristina Ziliani, 2017. "Beyond the "mobile versus PC" dichotomy: Profiling online shoppers based on device usage," MERCATI E COMPETITIVIT, FrancoAngeli Editore, vol. 2017(2), pages 99-121.
    16. Rippé, Cindy B. & Smith, Brent & Dubinsky, Alan J., 2018. "Lonely consumers and their friend the retail salesperson," Journal of Business Research, Elsevier, vol. 92(C), pages 131-141.
    17. Reinartz, Werner & Wiegand, Nico & Imschloss, Monika, 2019. "The impact of digital transformation on the retailing value chain," International Journal of Research in Marketing, Elsevier, vol. 36(3), pages 350-366.
    18. Iyer, Pramod & Davari, Arezoo & Mukherjee, Amaradri, 2018. "Investigating the effectiveness of retailers’ mobile applications in determining customer satisfaction and repatronage intentions? A congruency perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 44(C), pages 235-243.
    19. Carlos Tam & Diogo Santos & Tiago Oliveira, 2020. "Exploring the influential factors of continuance intention to use mobile Apps: Extending the expectation confirmation model," Information Systems Frontiers, Springer, vol. 22(1), pages 243-257, February.
    20. Abdullatif I. R. ALHUDAITHY, 2019. "The Impact of Supermarkets’ Mobile Application on Saudi Customer’s Behavior during the Buying Decision Process," Expert Journal of Marketing, Sprint Investify, vol. 7(1), pages 77-91.
    21. Cao, Lanlan & Liu, Xin & Cao, Wenbin, 2018. "The Effects of Search-Related and Purchase-Related Mobile App Additions on Retailers’ Shareholder Wealth: The Roles of Firm Size, Product Category, and Customer Segment," Journal of Retailing, Elsevier, vol. 94(4), pages 343-351.

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