Creating Customer Engagement Via Mobile Apps: How App Usage Drives Purchase Behavior

48 Pages Posted: 7 Oct 2015

See all articles by Isaac M. Dinner

Isaac M. Dinner

Indeed

Harald J. van Heerde

Massey University - Dept of Communication, Journalism & Marketing

Scott Neslin

Dartmouth College - Tuck School of Business

Date Written: October 5, 2015

Abstract

The proliferation of smartphones has spawned a new industry – mobile apps. Managers increasingly recognize the potential for mobile commerce apps to “engage” customers and thereby grow sales. To measure this potential, this paper examines what drives customer usage of apps and whether app usage drives purchases in the online and offline channels. The paper proposes three key drivers of app usage – marketing efforts, app-related consumer factors and app design. The drivers are empirically tested on a unique database provided by an upscale retailer on 1286 customers who have downloaded the retailer’s mobile app. The data record app usage and online and offline purchase behavior. The authors estimate models for using or “accessing” the app and the translation of access into both online and offline purchase. The results demonstrate that app access is driven by online advertising, social media messaging, app upgrades, state dependence and purchase history. Importantly, accessing the mobile app translates into both online and offline purchases, although as expected, more so online than offline. The paper concludes with managerial implications.

Keywords: mobile apps, app usage, online advertising, dynamic models

JEL Classification: M31, M37

Suggested Citation

Dinner, Isaac M. and van Heerde, Harald J. and Neslin, Scott, Creating Customer Engagement Via Mobile Apps: How App Usage Drives Purchase Behavior (October 5, 2015). Tuck School of Business Working Paper No. 2669817, Available at SSRN: https://ssrn.com/abstract=2669817 or http://dx.doi.org/10.2139/ssrn.2669817

Isaac M. Dinner (Contact Author)

Indeed ( email )

721 Domain Drive
Austin, TX 78758
United States

Harald J. Van Heerde

Massey University - Dept of Communication, Journalism & Marketing ( email )

Dept of Communication, Journalism & Marketing
Private Box 756
Wellington, 6140
New Zealand

Scott Neslin

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

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